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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 DECEMBER 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 NUMBER 0-6079
AMELCO CORPORATION
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(Exact name of registrant as specified in its charter)
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<S> <C>
CALIFORNIA 99-0068616
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(State or other jurisdiction of I.R.S. Employer
incorporation or organization) Identification No.)
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<TABLE>
<S> <C>
19208 SOUTH VERMONT AVENUE
GARDENA, CALIFORNIA 90248
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(Address of principal executive offices) (Zip Code)
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(310) 327-3070
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(Registrant's telephone number, including area code)
NOT APPLICABLE
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(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
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
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<CAPTION>
OUTSTANDING AT
CLASS OF COMMON STOCK DECEMBER 31, 1995
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<S> <C>
COMMON STOCK, WITHOUT PAR VALUE 1,443,542
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AMELCO CORPORATION AND SUBSIDIARIES
INDEX
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<CAPTION>
PART I. FINANCIAL INFORMATION PAGE
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<S> <C>
CONSOLIDATED BALANCE SHEETS-
DECEMBER 31, 1995 AND SEPTEMBER 30, 1995 3
CONSOLIDATED STATEMENTS OF EARNINGS -
THREE MONTHS ENDED DECEMBER 31, 1995 AND 1994 4
CONSOLIDATED STATEMENTS OF CASH FLOW-
THREE MONTHS ENDED DECEMBER 31, 1995 AND 1994 5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 6
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 7
PART II.
OTHER INFORMATION 9
SIGNATURE PAGE 9
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AMELCO CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
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<CAPTION>
(UNAUDITED)
December 31, September 30,
ASSETS 1995 1995
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<S> <C> <C>
Cash (note 4) $ 3,296,000 3,863,000
Receivables, net (note 2) 26,239,000 26,899,000
Inventories 169,000 175,000
Investment in and advances to joint ventures 38,000 78,000
Costs and recognized profits in excess of billings on
uncompleted contracts 7,672,000 6,541,000
Deferred tax assets 203,000 231,000
Prepaid expenses and other 932,000 339,000
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Total Current Assets 38,549,000 38,126,000
Note receivable from related party, noncurrent 3,298,000 3,306,000
Other notes receivable and noncurrent investments 350,000 300,000
Property, plant and equipment, net 1,788,000 1,772,000
Other assets 163,000 125,000
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TOTAL ASSETS $ 44,148,000 43,629,000
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Short term borrowings $ 1,950,000 900,000
Short term notes payable 512,000 102,000
Current portion of long term debt 49,000 48,000
Accounts payable 13,604,000 15,986,000
Accrued expenses 3,127,000 2,831,000
Federal and state income taxes 14,000 -
Billings in excess of costs and recognized profits on
uncompleted contracts 7,547,000 6,548,000
Other current liabilities 471,000 550,000
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Total Current Liabilities 27,274,000 26,965,000
Long term debt, excluding current portion 1,851,000 1,863,000
Deferred federal and state income taxes 51,000 19,000
Minority interest in subsidiary 18,000 15,000
Stockholders' equity:
Common stock, without par value, 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 5,003,000 4,816,000
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17,965,000 17,778,000
Less treasury shares (3,011,000) (3,011,000)
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Total stockholders' equity 14,954,000 14,767,000
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 44,148,000 43,629,000
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AMELCO CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
THREE MONTHS ENDED DECEMBER 31, 1995 AND 1995
(UNAUDITED)
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<CAPTION>
1995 1994
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<S> <C> <C>
Revenues $27,478,000 31,350,000
Costs and operating expenses 24,959,000 28,773,000
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Gross profit 2,519,000 2,577,000
General and administrative expenses 2,209,000 2,048,000
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Operating income 310,000 529,000
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Other income (expense):
Interest expense (109,000) (75,000)
Other, net 120,000 57,000
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Total other income (expense) 11,000 (18,000)
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Earnings before income taxes 321,000 511,000
Income tax expense 131,000 208,000
Minority interest in earnings (loss) of subsidiary 3,000 (5,000)
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Net earnings $ 187,000 308,000
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Earnings per share:
Net earnings per common share $ 0.13 $ 0.21
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Weighted average number of common shares outstanding during the
period 1,444,000 1,444,000
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AMELCO CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED DECEMBER 31, 1995 AND 1994
(UNAUDITED)
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<CAPTION>
1995 1994
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<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 187,000 308,000
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Adjustments to reconcile income to net cash
provided (used) by operating activities:
Depreciation and amortization 100,000 98,000
(Increase) decrease in assets and increase (decrease)
in liabilities:
Accounts receivable 660,000 3,691,000
Investment in joint venture 40,000 (18,000)
Inventories 6,000 28,000
Costs and recognized profits in excess of billings on
uncompleted contracts (1,131,000) (1,581,000)
Prepaid expenses (593,000) (476,000)
Other assets (38,000) (23,000)
Accounts payable and accrued expenses (2,086,000) (4,096,000)
Billings in excess of costs and recognized profits on
uncompleted contracts 999,000 536,000
Income taxes payable 74,000 (73,000)
Other liabilities (79,000) (103,000)
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Total adjustments (2,048,000) (2,017,000)
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Net cash (used) by operating activities $(1,861,000) (1,709,000)
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Cash flows from investing activities:
Decrease(increase) in notes receivable and other
investments (42,000) 8,000
Increase (decrease) in minority interest 3,000 (5,000)
Proceeds from sale of assets - 1,000
Capital expenditures (116,000) (54,000)
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Net cash (used) by investing activities $ (155,000) (50,000)
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Cash flows from financing activities:
Borrowings under revolving line of credit, net 1,050,000 1,050,000
Repayments of long term debt (11,000) (11,000)
Borrowings under short term note payable 638,000 540,000
Repayments of short term note payable (228,000) (204,000)
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Net cash provided by financing activities $ 1,449,000 1,375,000
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Net increase (decrease) in cash and cash
equivalents (567,000) (384,000)
Cash and cash equivalents at beginning of year 3,863,000 2,690,000
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Cash and cash equivalents at end of year $ 3,296,000 2,306,000
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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
December 31, 1995 and September 30, 1995, the results of its operations for the
three months ended December 31, 1995 and 1994 and changes in cash flow for the
three months ended December 31, 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, 1995.
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 $5,653,000 and $5,521,000 at December 31, 1995 and
September 30, 1995, respectively.
3. Backlog: The backlog of uncompleted contracting work was approximately
$83,978,000 on contracts in force as of December 31, 1995, compared with
$87,661,000 as of September 30, 1995, inclusive of the Company's proportionate
share of contract backlog from joint ventures amounting to $40,000 at September
30, 1995. Contract backlog from joint venture participations was not
significant at December 31, 1995.
4. Cash: Cash balances at December 31, 1995 include approximately
$1,772,000 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 $0.15 per share dividend has been declared and is payable
on February 15, 1996 to stockholders of record on February 1, 1996. The
dividend amounts to $216,000.
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AMELCO CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
CAPITAL RESOURCES AND LIQUIDITY
Cash balances decreased from $3,863,000 at September 30, 1995 to
$3,296,000 at December 31, 1995. This decrease in cash of $567,000 consisted of
approximately $1,861,000 used by operating activities and $155,000 used by
investing activities. The decrease was offset by $1,449,000 provided by
financing activities.
Cash used by operating activities consisted primarily of decreases in
accounts payable and accrued expenses aggregating $2,086,000 and an increase in
costs and recognized profits in excess of billings on uncompleted contracts of
$1,131,000. This change was offset by net earnings from operating activities of
$187,000, an increase in billings in excess of costs and recognized profits on
uncompleted contracts of $999,000 and a decrease in receivables of $660,000.
The increase in prepaid expenses of $593,000 reflects primarily prepaid
insurance premiums for the fiscal 1996 year which were funded by a short-term
note payable.
Net cash provided by financing activities included $1,050,000 in
borrowings under the Company's lines of credit and $638,000 under a short term
note to finance insurance premiums as mentioned above. These changes were
offset by repayments of long term debt and short term notes amounting to
$11,000 and $228,000, respectively. Net cash used by investing activities
consisted primarily of capital expenditures of $116,000 and an increase in
noncurrent notes receivable and other investments aggregating $42,000.
The Company's construction backlog amounted to approximately
$83,978,000 at December 31, 1995, of which approximately $52.5 million was in
California, $9.7 million was in Hawaii and the Pacific Basin, and $21.8 million
in other western continental U. S. states. The Company's revolving lines of
credit aggregating $6,000,000 are scheduled to be renewed in March 1996. At
December 31, 1995, there was $1,950,000 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.
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AMELCO CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(CONTINUED)
RESULTS OF OPERATIONS
Consolidated revenues decreased by 12.4% in the three month period
ended December 31, 1995 as compared to the prior year. The change in the three
month period results primarily from revenue decreases of approximately $0.8
million from the California operations, $1.1 million from the Hawaii operations
and $1.9 million from construction operations in other western continental U.
S. states. These 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 decreased by $58,000 in the three month period ended
December 31, 1995 as compared to the previous period. The change results from
the decrease in revenue volume, which was offset by an increase in gross
margins. Gross profits as a percentage of revenue were 9.2% and 8.2% in the
three month periods ended December 31, 1995 and 1994, respectively.The change
in gross margins reflects higher margin construction work performed in the
current quarter in both the California and Hawaii markets. The Company
continues to experience highly competitive conditions in the commercial and
industrial construction market. 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 three month period ended
December 31, 1995 increased by approximately $161,000 or 7.9% as compared to
the previous period. The change reflects increases in compensation paid to
employees as well as the cost of additional project management and
administrative staff, together with related office support expenses, incurred
since the prior period.
Interest expense increased by $34,000 in the three month period ended
December 31, 1995 due to a combination of higher interest rates and increased
utilization of the Company's lines of credit as compared to the previous
period.
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PART II
OTHER INFORMATION
No events occurred during the three (3) month period ended December 31, 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: February 14, 1996 By /s/ Patrick T. Miike
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Patrick T. Miike
Chief Financial Officer,
Vice President-Finance and
Treasurer
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<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q
FOR THE THREE MONTHS ENDED DECEMBER 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 3,296
<SECURITIES> 0
<RECEIVABLES> 26,524
<ALLOWANCES> 285
<INVENTORY> 169
<CURRENT-ASSETS> 38,549
<PP&E> 7,681
<DEPRECIATION> 5,893
<TOTAL-ASSETS> 44,148
<CURRENT-LIABILITIES> 27,274
<BONDS> 1,851
0
0
<COMMON> 5,535
<OTHER-SE> 9,419
<TOTAL-LIABILITY-AND-EQUITY> 44,148
<SALES> 27,478
<TOTAL-REVENUES> 27,478
<CGS> 24,959
<TOTAL-COSTS> 24,959
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 109
<INCOME-PRETAX> 321
<INCOME-TAX> 131
<INCOME-CONTINUING> 187
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 187
<EPS-PRIMARY> 0.13
<EPS-DILUTED> 0.13
</TABLE>
