<PAGE> 1
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, 1996
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
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(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
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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.
<TABLE>
<CAPTION>
Outstanding at
Class of Common Stock June 30, 1996
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<S> <C>
Common Stock, without par value 1,443,088
</TABLE>
<PAGE> 2
AMELCO CORPORATION AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
<S> <C>
PART I. FINANCIAL INFORMATION PAGE
----
Consolidated Balance Sheets-
June 30, 1996 and September 30, 1995 3
Consolidated Statements of Earnings -
Nine months ended June 30, 1996 and 1995 4
Consolidated Statements of Earnings -
Three months ended June 30, 1996 and 1995 5
Consolidated Statements of Cash Flow-
Nine months ended June 30, 1996 and 1995 6
Notes to Consolidated Financial Statements 7
Management's Discussion and Analysis of
Financial 8
Condition and Results of Operations
PART II.
Other Information 10
Signature Page 10
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<PAGE> 3
Amelco Corporation and Subsidiaries
Consolidated Balance Sheets
<TABLE>
<CAPTION>
(Unaudited)
June 30, September 30,
1996 1995
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<S> <C> <C>
Assets
- ------
Cash (note 4) $ 3,885,000 3,863,000
Receivables, net (note 2) 26,274,000 26,899,000
Inventories 170,000 175,000
Investment in and advances to joint ventures 45,000 78,000
Costs and recognized profits in excess of
billings on uncompleted contracts 6,380,000 6,541,000
Deferred tax assets 294,000 231,000
Prepaid expenses and other 413,000 339,000
------------ ----------
Total Current Assets 37,461,000 38,126,000
Note receivable from related party,noncurrent 3,280,000 3,306,000
Other notes receivable and
noncurrent investments 307,000 300,000
Property, plant and equipment, net 2,284,000 1,772,000
Other assets 163,000 125,000
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Total Assets $ 43,495,000 43,629,000
============ ==========
Liabilities and Stockholders'Equity
- -----------------------------------
Short term borrowings $ 2,100,000 900,000
Current portion of long term debt 61,000 48,000
Short term notes payable 59,000 102,000
Accounts payable 12,325,000 15,986,000
Accrued expenses 3,595,000 2,831,000
Federal and state income taxes 52,000 -
Billings in excess of costs and
recognized profits on uncompleted contracts 7,628,000 6,548,000
Other current liabilities 417,000 550,000
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Total Current Liabilities 26,237,000 26,965,000
Long term debt, excluding current portion 2,093,000 1,863,000
Deferred federal and state income taxes 32,000 19,000
Minority interest in subsidiary 31,000 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 5,152,000 4,816,000
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18,114,000 17,778,000
Less treasury shares (3,012,000) (3,011,000)
------------ ----------
Total stockholders'equity 15,102,000 14,767,000
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Total Liabilities and Stockholders' Equity $ 43,495,000 43,629,000
============ ===========
</TABLE>
<PAGE> 4
Amelco Corporation and Subsidiaries
Consolidated Statements of Earnings
Nine Months Ended June 30, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
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<S> <C> <C>
Revenues $ 88,322,000 94,025,000
Costs and operating expenses 80,421,000 86,564,000
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Gross profit 7,901,000 7,461,000
General and administrative expenses 6,920,000 6,081,000
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Operating income 981,000 1,380,000
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Other income (expense):
Interest expense (295,000) (239,000)
Other, net 276,000 209,000
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Total other income (expense) (19,000) (30,000)
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Earnings before income taxes 962,000 1,350,000
Income tax expense 394,000 559,000
Minority interest in earnings (loss)
of subsidiary 15,000 (10,000)
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Net earnings $ 553,000 801,000
============= ===========
Earnings per share:
Net earnings per common share $ 0.38 $ 0.55
========== ==========
Weighted average number of common
shares outstanding during the period 1,443,000 1,444,000
========== ==========
<PAGE> 5
Amelco Corporation and Subsidiaries
Consolidated Statements of Earnings
Three Months Ended June 30, 1996 and 1995
(Unaudited)
</TABLE>
<TABLE>
<CAPTION>
1996 1995
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<S> <C> <C>
Revenues $ 29,750,000 31,669,000
Costs and operating expenses 26,970,000 29,238,000
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Gross profit 2,780,000 2,431,000
General and administrative expenses 2,484,000 2,011,000
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Operating income 296,000 420,000
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Other income (expense):
Interest expense (85,000) (73,000)
Other, net 106,000 72,000
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Total other income (expense) 21,000 (1,000)
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Earnings before income taxes 317,000 419,000
Income tax expense 130,000 168,000
Minority interest in earnings (loss) 9,000 -
of subsidiary
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Net earnings $ 178,000 251,000
============ ===========
Earnings per share:
Net earnings per common share $ 0.12 $ 0.17
=========== ===========
Weighted average number of common
shares outstanding during the period 1,443,000 1,444,000
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<PAGE> 6
Amelco Corporation and Subsidiaries
Consolidated Statements of Cash Flows
Nine Months Ended June 30, 1996 and 1995
(Unaudited)
</TABLE>
<TABLE>
<CAPTION>
1996 1995
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<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 553,000 801,000
Adjustments to reconcile income to net cash
provided (used) by operating activities:
Depreciation and amortization 314,000 300,000
Gain on sale of assets (1,000) (4,000)
(Increase) decrease in assets and
increase (decrease)in liabilities:
Accounts receivable 625,000 (132,000)
Investment in joint venture 33,000 1,055,000
Inventories 5,000 (44,000)
Costs and recognized profits in excess
of billings on uncompleted contracts 161,000 (1,780,000)
Prepaid expenses (74,000) (179,000)
Other assets (38,000) (31,000)
Accounts payable and accrued expense (2,897,000) (553,000)
Billings in excess of costs and
recognized profits on uncompleted contracts 1,080,000 1,247,000
Income taxes payable 2,000 (291,000)
Other liabilities (133,000) (142,000)
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Total adjustments (923,000) (554,000)
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Net cash (used) by operating activities $ (370,000) 247,000
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Cash flows from investing activities:
Decrease (increase) in notes receivable and other
investments 19,000 64,000
Proceeds from sale of assets 21,000 6,000
Capital expenditures (846,000) (278,000)
Other 15,000 (18,000)
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Net cash (used) by investing activities $ (791,000) (226,000)
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Cash flows from financing activities:
Borrowings under revolving line of credit, net 1,200,000 1,250,000
Repayments of long term debt (37,000) (34,000)
Borowings under long term debt 281,000 -
Borrowings under short term note payable 638,000 540,000
Repayments of short term note payable (682,000) (492,000)
Dividends paid (217,000) (144,000)
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Net cash provided by financing activities $ 1,183,000 1,120,000
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Net increase (decrease) in cash and cash equivalents 22,000 1,141,000
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 $ 3,885,000 3,831,000
=========== ==========
<PAGE> 7
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, 1996 and September 30, 1995, the results
of its operations for the three and nine months ended June 30, 1996 and
1995 and changes in cash flow for the nine months ended June 30, 1996
and 1995. 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 $6,460,000 and $5,521,000
at June 30, 1996 and September 30, 1995, respectively.
3. Backlog: The backlog of uncompleted contracting work was
approximately $65,697,000 on contracts in force as of June 30, 1996 ,
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 $54,000 and $40,000 at June 30, 1996 and September 30,
1995, respectively.
4. Cash: Cash balances at June 30, 1996 include approximately
$2,216,000 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 was paid on February 15, 1996
to stockholders of record on February 1, 1996. The dividend amounted to
$217,000.
<PAGE> 8
Amelco Corporation and Subsidiaries
Management's Discussion and Analysis of Financial Condition
and
Results of Operations
Capital Resources and Liquidity
Cash balances increased from $3,863,000 at September 30, 1995
to $3,885,000 at June 30, 1996. The increase in cash of $22,000 consisted
of approximately $370,000 used by operating activities and $791,000
used by investing activities. The decrease was offset by $1,183,000
provided by financing activities.
Cash used by operating activities consisted primarily of decreases
in accounts payable and accrued expenses aggregating $2,897,000.
This change was offset by net earnings from operating activities of
$553,000, an increase in billings in excess of costs and recognized
profits on uncompleted contracts of $1,080,000 and a decrease in
receivables of $625,000.
Net cash provided by financing activities included a $1,200,000
increase in borrowings under the Company's lines of credit, $638,000
borrowed under a short term note to finance insurance premiums and a
$281,000 mortgage note obtained to finance the purchase of a dwelling
unit to house certain construction project personnel. These changes
were offset by repayments of long term debt and short term notes
amounting to $37,000 and $682,000, respectively, and the payment of a
dividend to shareholders of $217,000 in February, 1996. Net cash used
by investing activities consisted primarily of capital expenditures of
$846,000, which included the purchase of real property as discussed
previously, which amounted to approximately $363,000, and various
construction equipment acquired for specific construction projects
presently in progress.
The Company's construction backlog amounted to approximately
$65,697,000 at June 30, 1996, of which approximately $39.1 million
was in California, $10.6 million was in Hawaii and the Pacific Basin, and
$16.0 million in other continental U. S. states. The Company's revolving
lines of credit which were renewed in March 1996, have been increased from
$6,000,000 to $7,000,000, under terms which are unchanged from those
previously in effect. These short term credit facilities were increased
to enhance the Company's ability to engage in new bidding opportunities.
At June 30, 1996, there was $2,100,000 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.
<PAGE> 9
Amelco Corporation and Subsidiaries
Management's Discussion and Analysis of Financial Condition
and
Results of Operations
(continued)
Results of Operations
Consolidated revenues decreased by 6.1% in the nine month period
ended June 30, 1996 as compared to the prior year. The change in the nine
month period results primarily from revenue decreases of approximately
$0.3 million from the California operations, $3.5 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 increased by $440,000 in the nine month period ended
June 30, 1996 as compared to the previous period. Gross profits as a
percentage of revenue were 8.9% and 7.9% in the nine month periods ended
June 30, 1996 and 1995, respectively. The change in gross margins reflects
improved margins on construction work performed in the current period
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 nine month period ended
June 30, 1996 increased by approximately $839,000 as compared to the
previous period. The change results primarily from increases in
compensation paid to employees as compared to the prior period, and the
cost of additional management, estimating and administrative staff at the
office and field level, together with related support expenses.
Interest expense increased by $56,000 in the nine month period ended
June 30, 1996 due primarily to increased utilization of the Company's
lines of credit as compared to the previous period. Other income increased
by $67,000 due primarily to an increase in interest income.
<PAGE> 10
Part II
Other Information
No events occurred during the three (3) month period ended
June 30, 1996 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 13, 1996 By /s/ Patrick T. Miike
-----------------------
Patrick T. Miike
Chief Financial Officer,
Vice President-Finance and
Treasurer
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (A) FORM
10-Q FOR THE NINE MONTHS ENDED JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH (B) FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-1-1995
<PERIOD-END> JUN-30-1996
<PERIOD-TYPE> 9-MOS
<CASH> 3,885
<SECURITIES> 0
<RECEIVABLES> 26,559
<ALLOWANCES> 285
<INVENTORY> 170
<CURRENT-ASSETS> 37,461
<PP&E> 8,186
<DEPRECIATION> 5,901
<TOTAL-ASSETS> 43,495
<CURRENT-LIABILITIES> 26,237
<BONDS> 2,093
<COMMON> 5,535
0
0
<OTHER-SE> 9,567
<TOTAL-LIABILITY-AND-EQUITY> 43,495
<SALES> 88,322
<TOTAL-REVENUES> 88,322
<CGS> 80,421
<TOTAL-COSTS> 80,421
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 295
<INCOME-PRETAX> 962
<INCOME-TAX> 394
<INCOME-CONTINUING> 553
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 553
<EPS-PRIMARY> .38
<EPS-DILUTED> .38
</TABLE>
