<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 MARCH 31, 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
--------------------------- ------
(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.
<TABLE>
<CAPTION>
OUTSTANDING AT
CLASS OF COMMON STOCK MARCH 31, 1996
--------------------- -----------------
<S> <C>
COMMON STOCK, WITHOUT PAR VALUE 1,443,088
</TABLE>
<PAGE> 2
AMELCO CORPORATION AND SUBSIDIARIES
INDEX
<TABLE>
<S> <C>
PART I. FINANCIAL INFORMATION PAGE
----
CONSOLIDATED BALANCE SHEETS-
MARCH 31, 1996 AND SEPTEMBER 30, 1995
3
CONSOLIDATED STATEMENTS OF EARNINGS -
SIX MONTHS ENDED MARCH 31, 1996 AND 1995
4
CONSOLIDATED STATEMENTS OF EARNINGS -
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
5
CONSOLIDATED STATEMENTS OF CASH FLOW-
SIX MONTHS ENDED MARCH 31, 1996 AND 1995
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
</TABLE>
<PAGE> 3
AMELCO CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(UNAUDITED)
March 31, September 30,
1996 1995
-------------- -----------------
<S> <C> <C>
ASSETS
- - ------
Cash (note 4) $ 3,442,000 3,863,000
Receivables, net (note 2) 25,363,000 26,899,000
Inventories 179,000 175,000
Investment in and advances to joint ventures 34,000 78,000
Costs and recognized profits in excess of billings on
uncompleted contracts 6,580,000 6,541,000
Deferred tax assets 261,000 231,000
Prepaid expenses and other 675,000 339,000
---------------- ---------------
Total Current Assets 36,534,000 38,126,000
Note receivable from related party, noncurrent 3,289,000 3,306,000
Other notes receivable and noncurrent investments 350,000 300,000
Property, plant and equipment, net 2,211,000 1,772,000
Other assets 163,000 125,000
---------------- ---------------
TOTAL ASSETS $ 42,547,000 43,629,000
================ ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
- - ------------------------------------
Short term borrowings $ 1,325,000 900,000
Current portion of long term debt 51,000 48,000
Short term notes payable 287,000 102,000
Accounts payable 13,031,000 15,986,000
Accrued expenses 3,471,000 2,831,000
Federal and state income taxes 22,000 -
Billings in excess of costs and recognized profits on
uncompleted contracts 7,057,000 6,548,000
Other current liabilities 481,000 550,000
---------------- ---------------
Total Current Liabilities 25,725,000 26,965,000
Long term debt, excluding current portion 1,836,000 1,863,000
Deferred federal and state income taxes 40,000 19,000
Minority interest in subsidiary 22,000 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 4,974,000 4,816,000
---------------- ---------------
17,936,000 17,778,000
Less treasury shares (3,012,000) (3,011,000)
---------------- ---------------
Total stockholders' equity 14,924,000 14,767,000
---------------- ---------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 42,547,000 43,629,000
================ ===============
</TABLE>
<PAGE> 4
AMELCO CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
SIX MONTHS ENDED MARCH 31, 1996 AND 1995
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
---------------- ---------------
<S> <C> <C>
Revenues $ 58,572,000 62,356,000
Costs and operating expenses 53,451,000 57,326,000
---------------- ---------------
Gross profit 5,121,000 5,030,000
General and administrative expenses 4,436,000 4,070,000
---------------- ---------------
Operating income 685,000 960,000
---------------- ---------------
Other income (expense):
Interest expense (210,000) (166,000)
Other, net 170,000 137,000
---------------- ---------------
Total other income (expense) (40,000) (29,000)
---------------- ---------------
Earnings before income taxes 645,000 931,000
Income tax expense 264,000 391,000
Minority interest in earnings
(loss) of subsidiary 6,000 (10,000)
---------------- ---------------
Net earnings $ 375,000 550,000
================= ==============
Earnings per share:
Net earnings per common share $ 0.26 $ 0.38
================= ==============
Weighted average number of common
shares outstanding during the period 1,443,000 1,444,000
================= ==============
</TABLE>
<PAGE> 5
AMELCO CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
--------------- ------------
<S> <C> <C>
Revenues $ 31,094,000 31,006,000
Costs and operating expenses 28,492,000 28,553,000
--------------- ------------
Gross profit 2,602,000 2,453,000
General and administrative expenses 2,227,000 2,022,000
--------------- ------------
Operating income 375,000 431,000
--------------- ------------
Other income (expense):
Interest expense (101,000) (91,000)
Other, net 50,000 80,000
--------------- ------------
Total other income (expense) (51,000) (11,000)
--------------- ------------
Earnings before income taxes 324,000 420,000
Income tax expense 133,000 183,000
Minority interest in earnings
(loss) of subsidiary 3,000 (5,000)
--------------- ------------
Net earnings $ 188,000 242,000
=============== ============
Earnings per share:
Net earnings per common share $ 0.13 $ 0.17
=============== ============
Weighted average number of common
shares outstanding during the period 1,443,000 1,444,000
=============== ============
</TABLE>
<PAGE> 6
AMELCO CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED MARCH 31, 1996 AND 1995
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
----------------- ---------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 375,000 550,000
----------------- ---------------
Adjustments to reconcile income to net cash
provided (used) by operating activities:
Depreciation and amortization 205,000 197,000
Gain on sale of assets (7,000) (2,000)
(Increase) decrease in assets and increase (decrease)
in liabilities:
Accounts receivable 1,536,000 3,468,000
Investment in joint venture 44,000 1,033,000
Inventories (4,000) (27,000)
Costs and recognized profits in excess of billings on
uncompleted contracts (39,000) (2,246,000)
Prepaid expenses (336,000) (326,000)
Other assets (38,000) (31,000)
Accounts payable and accrued expenses (2,315,000) (3,193,000)
Billings in excess of costs and recognized profits on
uncompleted contracts 509,000 793,000
Income taxes payable 13,000 (167,000)
Other liabilities (69,000) (105,000)
----------------- ---------------
Total adjustments (501,000) (606,000)
----------------- ---------------
Net cash (used) by operating activities $ (126,000) (56,000)
----------------- ---------------
Cash flows from investing activities:
Decrease (increase) in notes receivable
and other investments (33,000) 15,000
Proceeds from sale of assets 8,000 4,000
Capital expenditures (645,000) (88,000)
Other 6,000 (18,000)
----------------- ---------------
Net cash (used) by investing activities $ (664,000) (87,000)
----------------- ---------------
Cash flows from financing activities:
Borrowings under revolving line of credit, net 425,000 550,000
Repayments of long term debt (24,000) (23,000)
Borrowings under short term note payable 638,000 540,000
Repayments of short term note payable (453,000) (348,000)
Dividends paid (217,000) (144,000)
----------------- ---------------
Net cash provided by financing activities $ 369,000 575,000
----------------- ---------------
Net increase (decrease) in cash and cash
equivalents (421,000) 432,000
Cash and cash equivalents at beginning of year 3,863,000 2,690,000
----------------- ---------------
Cash and cash equivalents at end of year $ 3,442,000 3,122,000
================= ===============
</TABLE>
<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
March 31, 1996 and September 30, 1995, the results of its operations for the
three and six months ended March 31, 1996 and 1995 and changes in cash flow for
the six months ended March 31, 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 $6,017,000 and $5,521,000 at March 31, 1996 and
September 30, 1995, respectively.
3. Backlog: The backlog of uncompleted contracting work was approximately
$80,988,000 on contracts in force as of March 31, 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 $274,000 and $40,000
at March 31, 1996 and September_30, 1995, respectively.
4. Cash: Cash balances at March 31, 1996 include approximately
$2,093,000 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 decreased from $3,863,000 at September 30, 1995 to
$3,442,000 at March 31, 1996. This decrease in cash of $421,000 consisted of
approximately $126,000 used by operating activities and $664,000 used by
investing activities. The decrease was offset by $369,000 provided by financing
activities.
Cash used by operating activities consisted primarily of decreases in
accounts payable and accrued expenses aggregating $2,315,000. This change was
offset by net earnings from operating activities of $375,000, an increase in
billings in excess of costs and recognized profits on uncompleted contracts of
$509,000 and a decrease in receivables of $1,536,000. The increase in prepaid
expenses of $336,000 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 a $425,000 increase
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
$24,000 and $453,000, 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 $645,000 and an
increase in noncurrent notes receivable and other investments aggregating
$33,000.
The Company's construction backlog amounted to approximately
$80,988,000 at March 31, 1996, of which approximately $50.5 million was in
California, $13.0 million was in Hawaii and the Pacific Basin, and $17.5
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 in the future. At March 31,
1996, there was $1,325,000 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 six month period ended
March 31, 1996 as compared to the prior year. The change in the six month
period results primarily from revenue decreases of approximately $2.7 million
from the Hawaii operations and $1.4 million from construction operations in
other western continental U. S. states. These decreases were partially offset
by a revenue increase in the California operations of $0.3 million. 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 $91,000 in the six month period ended
March 31, 1996 as compared to the previous period. Gross profits as a
percentage of revenue were 8.7% and 8.1% in the six month periods ended March
31, 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 six month period ended
March 31, 1996 increased by approximately $366,000 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 $44,000 in the six month period ended
March 31, 1996 due primarily to increased utilization of the Company's lines of
credit as compared to the previous period.
<PAGE> 10
PART II
OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its Annual Meeting of Shareholders on April 30, 1996
at which 1,389,060 or 96.3% 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 14, 1996 By /s/ Patrick T. Miike
------------ --------------------
Patrick T. Miike
Chief Financial Officer,
Vice President-Finance and
Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (A) FORM
10-Q FOR THE SIX MONTHS ENDED MARCH 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH (B) FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> MAR-31-1996
<CASH> 3,442
<SECURITIES> 0
<RECEIVABLES> 25,648
<ALLOWANCES> 285
<INVENTORY> 179
<CURRENT-ASSETS> 36,534
<PP&E> 8,057
<DEPRECIATION> 5,846
<TOTAL-ASSETS> 42,547
<CURRENT-LIABILITIES> 25,725
<BONDS> 1,836
0
0
<COMMON> 5,535
<OTHER-SE> 9,389
<TOTAL-LIABILITY-AND-EQUITY> 42,547
<SALES> 58,572
<TOTAL-REVENUES> 58,572
<CGS> 53,451
<TOTAL-COSTS> 53,451
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 210
<INCOME-PRETAX> 645
<INCOME-TAX> 264
<INCOME-CONTINUING> 375
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 375
<EPS-PRIMARY> 0.26
<EPS-DILUTED> 0.26
</TABLE>
