<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
FOR THE TRANSITION PERIOD FROM _______________ TO _______________
COMMISSION FILE NO. 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)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (310) 327-3070
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
<TABLE>
<CAPTION>
<S> <C>
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
------------------- ---------------------
NONE NONE
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
COMMON STOCK, WITHOUT PAR VALUE
(TITLE OF CLASS)
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES [X] NO [ ]
The aggregate market value of Common Stock held by non-affiliates on
December 2, 1996 was $598,000.
As of December 2, 1996, there were 1,443,088 shares of Common Stock
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's definitive proxy statement to be filed
pursuant to Regulation 14A not later than 120 days after the end of the fiscal
year (September 30, 1996) are incorporated by reference in Part III.
<PAGE> 2
PART I
Forward-Looking Statements
In addition to historical information, this Annual Report contains
forward-looking statements. The forward-looking statements contained herein are
subject to certain risks and uncertainties that could cause actual results to
differ materially from those reflected in the forward-looking statements.
Factors that might cause such a difference include, but are not limited to,
those discussed in the section entitled "Management's Discussion and Analysis of
Financial Condition and Results of Operations." Readers are cautioned not to
place undue reliance on these forward-looking statements, which reflect
management's analysis only as of the date hereof. Amelco Corporation undertakes
no obligation to publicly revise these forward-looking statements, to reflect
events or circumstances that arise after the date hereof. Readers should
carefully review the risk factors described in other documents the Company files
from time to time with the Securities and Exchange Commission, including the
Quarterly Reports on Form 10-Q to be filed by the Company in 1997 and any
Current Reports on Form 8-K by the Company.
Item 1. BUSINESS
Amelco Corporation (the "Company") was organized in 1967 to become the
parent of existing operating companies. The Company, through its subsidiaries,
engages in specialty construction work (primarily electrical and mechanical
construction). Construction operations are conducted in the western continental
United States, Hawaii and Guam.
OPERATIONS
The Company's contracting subsidiaries primarily act as specialty
contractors, and are capable of providing the full range of services in the
construction and installation of electrical and mechanical systems. These
activities are performed in the commercial and industrial construction market,
primarily in connection with the construction, rebuilding or renovation of
commercial buildings, industrial plants, convention buildings, wastewater
treatment plants, hotels, hospitals, hydroelectric dams, refineries, power
generating facilities, security systems, highway lighting and military
facilities.
Over the years, profit has been dependent upon management's ability to
accurately estimate costs to be incurred on projects which are competitively bid
and to effectively control costs of work in progress. Costs ultimately incurred
are affected by the incidence of such events and conditions
1
<PAGE> 3
as labor shortages, time extensions, weather, latent geological conditions,
delays caused by others and fluctuations in the prices of materials. Because of
the large number of variables affecting costs (many of which are not
controllable), increased revenues in a particular accounting period do not
necessarily result in increased operating profits; losses may occur even when
revenues increase.
The subsidiaries operate in a highly competitive industry. They
compete with numerous other local, regional and national contractors, both
smaller and larger than the subsidiaries, none of which are considered to be
dominant in the construction markets in which the subsidiaries operate.
Substantially all of the subsidiaries' construction contracts are awarded on the
basis of competitive bidding. Because of the degree of competition in the
industry, which is primarily based on the price of construction services
rendered, there is a greater likelihood that the subsidiaries will be an
unsuccessful bidder rather than a successful bidder.
Substantially all of the construction contracts have been fixed-price
contracts. Substantially greater risks are involved in fixed-price contracts
than in cost-plus-fee and target-estimate contracts since the contractor assumes
responsibility for completing the work for the contract price regardless of
ultimate costs. The ability of the subsidiaries to mitigate these risks is
largely dependent upon management's ability to accurately estimate construction
costs at the time of bid preparation and to effectively manage and control costs
of work in progress during the course of contract performance.
The Company has no major customers, the loss of which would have a
material adverse impact on the Company.
In connection with these contracting activities, the subsidiaries,
from time to time, assert claims for compensation in excess of the contract
price because of delays, owner-caused changed conditions or interruptions,
improper or revised specifications or disagreements with respect to the
contracted scope of work. Claims for additional compensation may arise in any
accounting period and may or may not be material to operations. All costs of
construction which give rise to a claim are expensed in the period in which they
were incurred. However, the amount of any claim is not recognized as revenue
until a settlement has been concluded. Claim settlements in 1996, 1995 and 1994
were not significant. Various other claims have been filed. No assurance can be
given that such claims will be allowed nor is the extent of any potential
recovery presently estimable.
The subsidiaries have numerous suppliers for materials and equipment,
none of which are individually dominant, and have experienced no significant
difficulty in obtaining the materials needed to pursue the contracted work.
2
<PAGE> 4
The backlog of uncompleted contracting work was approximately
$89,517,000 on contracts in force as of September 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 $26,000 and $40,000
at September 30, 1996 and 1995, respectively. The Company estimates that 70% of
the September 30, 1996 backlog will be substantially completed during fiscal
1997. Contracting backlog at any given time is subject to change due to
modifications to the projects concerned. While backlog is an indication of
future revenues, no assurance can be given that earnings will be realized from
performance of contracts reflected in the backlog.
The Company, through its subsidiaries, participates in joint venture
arrangements from time to time where the joint venturers undertake to bid and
complete, if awarded, a construction contract. These arrangements typically
provide for the sharing of profit or losses in the same relationship as the
capital contributions of the joint venturers and joint and several
responsibility for contract performance. Further information on joint venture
participations is contained in note 10 to the consolidated financial statements
in Item 8, Part II of this report, which is incorporated herein by reference.
The Company's Hawaii-based contracting subsidiaries perform various
maintenance and repair services relating primarily to electrical and
air-conditioning installations. Revenues derived from maintenance and repair
services are not material to the consolidated financial statements.
Employees: As of September 30, 1996, the Company had approximately 440
employees, of whom approximately 360 were engaged in operational activities and
approximately 80 were in supervisory, administrative and clerical positions.
Portions of the construction work for which the Company is responsible are
carried out by subcontractors who separately employ additional personnel. The
number of employees engaged in operational activities fluctuates continuously
based upon the number and size of projects. A number of labor unions represent
employees, of which local unions of the International Brotherhood of Electrical
Workers are considered to be dominant. No one union is the sole bargaining
agent.
Employee benefits for non-bargaining employees include a 401(k) plan
and group medical, dental, disability and life insurance programs.
Energy, Supply, Production and Environmental Matters:
The Company is not in an energy intensive business.
The Company experienced no significant problems in fiscal 1996
relating to the availability or price of construction materials.
3
<PAGE> 5
Construction operations are primarily located in Hawaii and the
western continental United States and, therefore, are not normally subject to
the effects of significant seasonal variations.
The Company's operations are such that compliance with environmental
legislation and regulations is not a significant factor. The Company, to some
extent, benefits from construction work resulting from compliance with
environmental requirements by other industries.
4
<PAGE> 6
Item 2. PROPERTIES
The following table summarizes properties occupied by the Company and
its subsidiaries. All properties utilized in construction operations have
combined uses as offices and warehouses. Management believes that these
facilities are in good condition, well maintained and adequate to serve the
needs of the Company:
IMPROVEMENTS --
APPROXIMATE SQUARE OWNED OR
LOCATION FOOTAGE LEASED
------------------------- --------------------- ----------
Gardena, California (1) 25,000 Leased
San Leandro, California 7,000 Owned
San Diego, California 7,000 Owned
Honolulu, Hawaii (2) 36,000 Leased
Barrigada, Guam (3) 36,300 Owned
(1) In addition to office and warehouse facilities for the Los Angeles
construction operations, this property houses the corporate
offices of the Company. This property is presently being rented
from a related party on a quarter-to-quarter basis.
(2) This property serves as the central office for the Hawaii
construction operations. This leasehold property has been pledged
as collateral for short-term debt of the Company. The lease
expires in 2029.
(3) This property has been pledged as security for an eight-year
$2,000,000 mortgage loan obtained by the Company in August 1993.
Further information with respect to the mortgage is provided in
note 4 to the consolidated financial statements in Item 8, Part II
of this report, which is incorporated herein by reference.
Item 3. LEGAL PROCEEDINGS
There are no material legal proceedings to which the Company or any of
its subsidiaries are a party which would, in management's opinion, have a
material impact on the consolidated financial statements taken as a whole.
5
<PAGE> 7
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth the names and ages of the Company's
executive officers, together with all positions and offices held with the
Company by such executive officers. Officers are appointed by the Board of
Directors to serve at the pleasure of the Board.
NAME AGE POSITION(S) WITH THE COMPANY/OTHER
- --------------------- -------- --------------------------------------------
Samuel M. Angelich 72 Vice President - Continental U.S. and
Director (October 1982 to June 1986)
Senior Vice President and Director (June
1986 to January 1988) President and Chairman
of the Board (since January 1988)
John M. Carmack 59 Director and Secretary (since January 1988)
Partner in the law firm of Gill and Baldwin
(since 1966)
Mark S. Angelich 40 Vice President of Administration of Amelco
Industries (August 1986 to January 1988)
Executive Vice President and Director (since
January 1988) Mr. Angelich is the son of
Samuel Angelich
Patrick T. Miike 46 Treasurer (since March 1985) Vice President
- Finance (since January 1988)
6
<PAGE> 8
PART II
Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
The only equity securities outstanding are shares of common stock,
without par value, which are traded over-the-counter. During each quarter of the
last two fiscal years, high and low bid prices for common stock, as reported by
a stockbroker, were as follows:
FISCAL YEAR ENDED SEPTEMBER 30
-----------------------------------------------------------
1995 1996
----------------------------- --------------------------
HIGH LOW HIGH LOW
------------- ------------ ------------ ----------
Quarter:
First 3-7/8 2-1/2 3 3
Second 2-1/2 2-1/2 3-1/4 3
Third 2-1/2 2-1/2 4 3
Fourth 2-1/2 2-1/2 4-1/8 3-5/8
The reported bid price on December 2, 1996 was 4-1/4.
These quotations were provided by a single stockbroker (Abel-Behnke
Corporation) known to make a market in the Company's common stock and reflect
bids only, without retail markup, markdown or commission and may not necessarily
represent actual transactions.
The Company has paid cash dividends on its common stock of $0.15,
$0.10, $0.15, $0.25, $0.15, $0.25 and $0.25 on February 15, 1996, February 15,
1995, March 25, 1994, February 12, 1993, March 16, 1992, November 15, 1990 and
September 25, 1989, respectively. The payment of dividends requires the consent
of the Company's bonding surety and its bank. Future dividends, if any, are
dependent on the profitability of the Company and are not assured.
As of December 16, 1996, the approximate number of holders of record
of the Company's common stock was 294.
7
<PAGE> 9
Item 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER 30
----------------------------------------------
1996 1995 1994 1993 1992
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
(In thousands, except per share amounts)
Operations:
Total construction revenue $ 115,718 126,221 114,131 95,554 90,843
======== ======== ======== ======== ========
Net earnings $ 703 1,015 804 910 700
======== ======== ======== ======== ========
Net earnings per share $ .49 .70 .56 .63 .48
======== ======== ======== ======== ========
Financial position:
Total assets $ 40,046 43,629 40,789 29,659 28,221
======== ======== ======== ======== ========
Long-term debt $ 2,079 1,863 1,911 1,956 --
======== ======== ======== ======== ========
Cash dividends declared per common share
$ .15 .10 .15 .25 .15
======== ======== ======== ======== ========
</TABLE>
Total construction revenue includes the Company's proportionate share
of revenue from construction joint ventures amounting to $559,000, $6,661,000,
$5,854,000, $2,513,000 and $2,283,000 in fiscal 1996, 1995, 1994, 1993 and 1992,
respectively.
Additional information on dividends is contained in Item 5, Part II
which is incorporated herein by reference.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
CAPITAL RESOURCES AND LIQUIDITY
In 1996, operating activities generated $1,250,000 in cash. This
increase was offset by cash utilized in financing and investing activities of
$391,000 and $881,000, respectively.
Financing activities in 1996 consumed $391,000 of cash, consisting
primarily of a $300,000 reduction in short-term borrowings under the Company's
line of credit, the repayment of a short-term note payable for $102,000 and the
payment a $217,000 dividend to stockholders in February 1996. This decrease was
offset by the acquisition of a mortgage note of $281,000 in connection with the
8
<PAGE> 10
purchase of a house for $363,000 used to provide accommodations to certain
construction project personnel.
Investing activities consumed cash of $881,000, primarily for the
acquisition of property, plant and equipment aggregating $945,000. Investment
activities included the purchase of the $363,000 house as noted above, and
various construction-related equipment acquired in connection with specific
projects. This was partially offset by cash received from notes receivable
aggregating $28,000 and proceeds from sale of assets of $23,000.
The Company's backlog of future construction work at September 30,
1996 approximated $89,517,000, inclusive of the Company's proportionate share of
contract backlog from joint venture participations aggregating $26,000.
Geographically, contract backlog approximating $66,009,000 is in California,
$8,645,000 is in Hawaii and Guam and $14,863,000 is in other continental U.S.
states.
The Company maintains short-term working capital lines of credit
aggregating $7,000,000. These credit facilities are primarily used to fund
short-term cash needs resulting from customer payment periods which are
frequently longer than payment periods for the Company's vendors. Management
believes that the present liquidity of the Company together with the
availability of the lines of credit are adequate to provide the working capital
to fund the Company's operations in 1997.
The Company's short-term lines of credit are indexed to the prime rate.
Although the Company has mitigated its exposure to interest rate movements by
the addition of long-term fixed rate debt in 1993, further significant changes
in the prime rate, either up or down, may have a significant impact on the
Company.
The Company's operations are such that significant investment in
property, plant and equipment is generally not required. However, certain
construction projects may require the purchase of specialized types of equipment
from time to time. A need for substantial equipment acquisitions is not foreseen
in 1997 and capital expenditures in the future should consist primarily of the
replacement or renovation of existing equipment.
The Financial Accounting Standards Board recently issued Statements of
Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets and Assets to be Disposed of" and No. 123, "Accounting for Stock Based
Compensation" which are required to be adopted by the Company in fiscal year
1997. It is believed that the adoption of these standards will not have a
material effect on the Company's financial statements.
9
<PAGE> 11
RESULTS OF OPERATIONS
Fiscal 1996 Compared to 1995
Consolidated revenues decreased by $10,503,000 in 1996. The change
reflects a decrease in revenue of approximately $5.0 million in California, $2.4
million in Hawaii and Guam and $3.1 million in other continental U.S. states.
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.
There are no major contracts which were completed in 1996 or which will be
completed in 1997 upon which the Company is dependent.
Gross profit increased from $10,073,000 in 1995 to $10,464,000 in
fiscal 1996. Gross profit as a percentage of revenues improved from 8.0% in 1995
to 9.0% in 1996. The change results from an improvement in gross profits on
construction work in both the California and Hawaii operations. The Company and
its subsidiaries have experienced highly competitive conditions in the
industrial and commercial construction markets in which it does business. This
is expected to continue in the near future. 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 initial bidding
stage and upon award, to effectively manage jobsite labor and material
installation.
General and administrative expenses increased from $8,338,000 in 1995
to $9,252,000 in 1996, due primarily to increases in staffing levels and
compensation costs. In the current year, the Company had an increase in
estimators and project management personnel, largely the result of the general
increase in revenue levels over the past three years. The Company also added an
upper-level management position which is responsible for the Hawaii and Pacific
area of the Company's operation.
Interest income increased by $96,000 in 1996 as compared to the
previous year due primarily to higher levels of cash maintained in interest
bearing accounts in the current year. Interest expense increased by $70,000 in
1996 due primarily to higher levels of borrowings under the Company's lines of
credit offset by changes in the bank prime rates which decreased from 8.75% to
8.25% at September 30, 1995 and 1996, respectively. Changes in other components
of other income and expense from the prior year were not significant.
10
<PAGE> 12
Fiscal 1995 Compared to 1994
Consolidated revenues increased by $12,090,000 in 1995. The change
reflects an increase in revenue of approximately $19.1 million in California
which was partially offset by decreases in revenue approximating $4.9 million in
Hawaii and Guam and $2.1 million in other western U.S. states. 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. There are no
major contracts which were completed in 1995 or which will be completed in 1996
upon which the Company is dependent.
Gross profit increased from $9,285,000 in 1994 to $10,073,000 in
fiscal 1995. Gross profit as a percentage of revenues decreased from 8.1% in
1994 to 8.0% in 1995. The change reflects primarily a decrease in gross profits
on construction work in the Hawaii operations which was offset by increased
profits from joint venture participations in 1995. Gross margins applicable to
California operations were largely unchanged in the current year. The Company
and its subsidiaries have experienced highly competitive conditions in the
industrial and commercial construction markets in which it does business. This
is expected to continue in the near future. 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 initial bidding
stage and upon award, to effectively manage jobsite labor and material
installation.
General and administrative expenses increased from $7,848,000 in 1994
to $8,338,000 in 1995. However, as a percentage of revenue, general and
administrative expense decreased from 6.9% in 1994 to 6.6% in 1995. The change
reflects primarily the additional costs of project management and administrative
staff, together with related office support expenses, incurred during the
current year in response to the higher levels of construction operations.
Interest income increased by $58,000 in 1995 as compared to the
previous year due primarily to higher levels of cash maintained in interest
bearing accounts in the current year. Interest expense decreased by $10,000 in
1995 due primarily to lower levels of borrowings under the Company's lines of
credit offset by changes in the bank prime rates which increased from 7.75% to
8.75% at September 30, 1994 and 1995, respectively. Changes in other components
of other income and expense from the prior year were not significant.
11
<PAGE> 13
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Amelco Corporation and Subsidiaries:
Independent Auditors' Report
Consolidated Balance Sheets - September 30, 1996 and 1995
Consolidated Statements of Earnings - Three years ended
September 30, 1996
Consolidated Statements of Stockholders' Equity -
Three years ended September 30, 1996
Consolidated Statements of Cash Flows - Three years ended
September 30, 1996
Notes to Consolidated Financial Statements
12
<PAGE> 14
AMELCO CORPORATION
AND SUBSIDIARIES
Consolidated Financial Statements
September 30, 1996 and 1995
(With Independent Auditors' Report Thereon)
13
<PAGE> 15
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders
Amelco Corporation:
We have audited the consolidated financial statements of Amelco Corporation and
subsidiaries as listed in the accompanying index. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Amelco Corporation
and subsidiaries as of September 30, 1996 and 1995 and the results of their
operations and their cash flows for each of the years in the three-year period
ended September 30, 1996 in conformity with generally accepted accounting
principles.
s/ KPMG Peat Marwick LLP
Los Angeles, California
December 17, 1996
14
<PAGE> 16
AMELCO CORPORATION
AND SUBSIDIARIES
Consolidated Balance Sheets
September 30, 1996 and 1995
<TABLE>
<CAPTION>
ASSETS 1996 1995
------------ ------------
<S> <C> <C>
Current assets:
Cash (including restricted time deposits of $2,252,000 in 1996 and
$1,616,000 in 1995) $ 3,841,000 3,863,000
Receivables (notes 3 and 4):
Contract and trade receivables 17,148,000 21,345,000
Contract retentions, due upon completion and acceptance of work
6,521,000 5,521,000
Notes and other receivables 695,000 318,000
------------ ------------
24,364,000 27,184,000
Less allowance for doubtful receivables (879,000) (285,000)
------------ ------------
Net receivables 23,485,000 26,899,000
------------ ------------
Inventories (note 4) 62,000 175,000
Investment in and advances to joint ventures (note 10) 138,000 78,000
Costs and recognized profits in excess of billings on uncompleted
contracts (note 11) 6,121,000 6,541,000
Deferred tax assets (note 5) 216,000 231,000
Prepaid expenses and other current assets 174,000 339,000
------------ ------------
Total current assets 34,037,000 38,126,000
------------ ------------
Note receivable from related party - noncurrent (note 2) 3,271,000 3,306,000
Other notes receivable and noncurrent investments 307,000 300,000
Property, plant and equipment, at cost (note 4):
Land 383,000 304,000
Buildings and leasehold improvements 2,561,000 2,253,000
Construction and other equipment 5,213,000 5,018,000
------------ ------------
8,157,000 7,575,000
Less accumulated depreciation and amortization (5,884,000) (5,803,000)
------------ ------------
Net property, plant and equipment 2,273,000 1,772,000
------------ ------------
Other assets 158,000 125,000
------------ ------------
$ 40,046,000 43,629,000
============ ============
</TABLE>
15
<PAGE> 17
AMELCO CORPORATION
AND SUBSIDIARIES
Consolidated Balance Sheets, Continued
September 30, 1996 and 1995
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY 1996 1995
------------ ------------
<S> <C> <C>
Current liabilities:
Short-term borrowings (note 4) $ 600,000 900,000
Current installments of long-term debt (note 4) 61,000 48,000
Short-term note payable (note 4) -- 102,000
Trade accounts payable 11,942,000 15,986,000
Accrued expenses:
Insurance 803,000 996,000
Salaries and wages 891,000 564,000
Employee benefits and other 1,109,000 1,271,000
Billings in excess of costs and recognized profits on uncompleted
contracts (note 11) 7,000,000 6,548,000
Other 281,000 550,000
------------ ------------
Total current liabilities 22,687,000 26,965,000
------------ ------------
Long-term debt, excluding current portion (note 4) 2,079,000 1,863,000
Deferred tax liability (note 5) -- 19,000
Minority interest in subsidiary (note 9) 28,000 15,000
Stockholders' equity:
Common stock, without par value
Authorized 10,000,000 shares; issued 2,214,008 shares 5,535,000 5,535,000
Additional paid-in capital 7,427,000 7,427,000
Retained earnings 5,302,000 4,816,000
------------ ------------
18,264,000 17,778,000
Less cost of shares in treasury (770,920 shares in 1996 and 770,466
shares in 1995) (3,012,000) (3,011,000)
------------ ------------
Net stockholders' equity 15,252,000 14,767,000
Commitments and contingencies (notes 7 and 8)
------------ ------------
$ 40,046,000 43,629,000
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
16
<PAGE> 18
AMELCO CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Earnings
Three years ended September 30, 1996
<TABLE>
<CAPTION>
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
Construction revenues (note 10) $115,718,000 126,221,000 114,131,000
Cost of construction 105,254,000 116,148,000 104,846,000
------------ ------------ ------------
Gross profit 10,464,000 10,073,000 9,285,000
General and administrative expenses 9,252,000 8,338,000 7,848,000
------------ ------------ ------------
Operating income 1,212,000 1,735,000 1,437,000
------------ ------------ ------------
Other income:
Interest 237,000 141,000 83,000
Other 265,000 249,000 290,000
------------ ------------ ------------
502,000 390,000 373,000
------------ ------------ ------------
Other expenses:
Interest 387,000 317,000 327,000
Other 114,000 102,000 103,000
------------ ------------ ------------
501,000 419,000 430,000
------------ ------------ ------------
Earnings before income taxes and
minority interest 1,213,000 1,706,000 1,380,000
Income taxes (note 5) 497,000 691,000 545,000
Minority interest in earnings of subsidiary (note 9) 13,000 -- 31,000
------------ ------------ ------------
Net earnings $ 703,000 1,015,000 804,000
============ ============ ============
Net earnings per common share $ .49 .70 .56
============ ============ ============
Weighted average number of shares outstanding 1,443,000 1,444,000 1,444,000
============ ============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
17
<PAGE> 19
AMELCO CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
Three years ended September 30, 1996
<TABLE>
<CAPTION>
ADDITIONAL NET
COMMON STOCK PAID-IN CAPITAL RETAINED TREASURY STOCK STOCKHOLDERS'
EARNINGS EQUITY
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Balance, September 30, 1993 $ 5,535,000 7,427,000 3,358,000 (3,011,000) 13,309,000
Dividends paid ($.15 per share) -- -- (217,000) -- (217,000)
Net earnings -- -- 804,000 -- 804,000
----------- ----------- ----------- ----------- -----------
Balance, September 30, 1994 5,535,000 7,427,000 3,945,000 (3,011,000) 13,896,000
Dividends paid ($.10 per share) -- -- (144,000) -- (144,000)
Net earnings -- -- 1,015,000 -- 1,015,000
----------- ----------- ----------- ----------- -----------
Balance, September 30, 1995 5,535,000 7,427,000 4,816,000 (3,011,000) 14,767,000
Dividends paid ($.15 per share) -- -- (217,000) -- (217,000)
Repurchase of 454 shares -- -- -- (1,000) (1,000)
Net earnings -- -- 703,000 -- 703,000
----------- ----------- ----------- ----------- -----------
Balance, September 30, 1996 $ 5,535,000 7,427,000 5,302,000 (3,012,000) 15,252,000
=========== =========== =========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
18
<PAGE> 20
AMELCO CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Three years ended September 30, 1996
Increase (Decrease) in Cash and Cash Equivalents
<TABLE>
<CAPTION>
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings $ 703,000 1,015,000 804,000
----------- ----------- -----------
Adjustments to reconcile net earnings to net cash provided by (used in)
operating activities:
Depreciation and amortization 424,000 403,000 393,000
Provision for doubtful accounts 594,000 187,000 (41,000)
Gain on sale of assets (3,000) (13,000) (1,000)
(Increase) decrease in assets and increase
(decrease) in liabilities:
Receivables, net 3,197,000 (1,525,000) (9,496,000)
Notes and other receivables (377,000) 35,000 --
Investment in and advances to joint ventures (60,000) 1,042,000 (838,000)
Inventories 113,000 (49,000) 18,000
Costs and recognized profits in excess of
billings on uncompleted contracts 420,000 (970,000) (1,677,000)
Prepaid expenses and other current assets 165,000 (169,000) 230,000
Deferred tax assets 15,000 (63,000) (168,000)
Other assets (33,000) (22,000) (20,000)
Accounts payable and accrued expenses (4,072,000) 1,149,000 6,273,000
Billings in excess of costs and recognized
profits on uncompleted contracts 452,000 135,000 4,352,000
Income taxes payable and deferred liability (19,000) (233,000) (40,000)
Other liabilities (269,000) (23,000) 86,000
----------- ----------- -----------
Total adjustments 547,000 (116,000) (929,000)
----------- ----------- -----------
Net cash provided by (used in) operating
activities 1,250,000 899,000 (125,000)
----------- ----------- -----------
Cash flows from investing activities:
Proceeds from sale of assets 23,000 15,000 3,000
Change in notes receivable and investments 28,000 (158,000) 61,000
Capital expenditures (945,000) (380,000) (310,000)
Increase (decrease) in minority interest 13,000 (16,000) 31,000
----------- ----------- -----------
Net cash used in investing activities $ (881,000) (539,000) (215,000)
----------- ----------- -----------
</TABLE>
(Continued)
19
<PAGE> 21
AMELCO CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Cash Flows, Continued
Increase (Decrease) in Cash and Cash Equivalents
<TABLE>
<CAPTION>
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from financing activities:
Net borrowings (repayments) under line of credit $ (300,000) 900,000 --
Borrowings of short-term notes payable -- 696,000 292,000
Repayments of short-term notes payable (102,000) (594,000) (292,000)
Borrowings under long-term debt 281,000 -- --
Repayments of long-term debt (52,000) (45,000) (159,000)
Dividends paid (217,000) (144,000) (217,000)
Repurchase of common stock (1,000) -- --
----------- ----------- -----------
Net cash provided by (used in) financing
activities (391,000) 813,000 (376,000)
----------- ----------- -----------
Net increase (decrease) in cash and cash
equivalents (22,000) 1,173,000 (716,000)
Cash and cash equivalents at beginning of year 3,863,000 2,690,000 3,406,000
----------- ----------- -----------
Cash and cash equivalents at end of year $ 3,841,000 3,863,000 2,690,000
=========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
20
<PAGE> 22
AMELCO CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1996 and 1995
(1) Summary of Significant Accounting Policies
Company's Activities and Operating Cycle
Amelco Corporation (the "Company") was organized in 1967 to become the
parent of existing operating companies. The Company, through its
subsidiaries, engages in specialty construction work, primarily
electrical and mechanical construction. Work is generally performed under
fixed-price contracts and is undertaken by the Company's subsidiaries
alone, with subcontractors or in partnership with other contractors
through joint ventures.
The length of the construction contracts varies, but typically ranges
from one to two years. In accordance with the operating cycle concept,
the Company and its subsidiaries classify all contract-related assets and
liabilities as current items.
Basis of Consolidation
The consolidated financial statements include the accounts of the Company
and all subsidiaries. The consolidated statements of earnings include the
accounts of the Company, all subsidiaries and its pro rata share of the
results of operations from its construction joint ventures. All
significant intercompany transactions have been eliminated in
consolidation.
Reclassifications
Certain accounts in the 1995 and 1994 financial statements have been
restated to conform with the 1996 format. These reclassifications have no
effect on net income as previously reported.
Revenue Recognition on Long-Term Construction Contracts
Income from construction operations and joint venture participations is
recorded using the percentage-of-completion method of accounting. Under
this method, that portion of the total contract price which is allocable,
on the basis of the Company's estimate of the percentage of completion,
to contract costs incurred and work performed is accrued. Recognition of
profits is deferred until work on the contract has reached a state of
completion sufficient for management to reasonably forecast the ultimate
realizable profit. If estimated total costs on any contract or joint
venture participation indicate a loss, the Company provides currently for
the total loss anticipated on the contract. For long-term contracts which
extend over one or more years, revisions in cost and profit estimates
during the course of the work are reflected in the accounting period in
which facts requiring the revision become known.
Contract costs include all direct material, labor and subcontract
costs and those indirect costs related to contract performance, such
as indirect labor, tools, supplies, repairs and depreciation cost.
General and administrative costs are charged to expense as incurred.
The asset "costs and recognized profits in excess of billings on
uncompleted contracts" represents revenues recognized in excess of
amounts billed. The liability "billings in excess of costs and recognized
profits on uncompleted contracts" represents billings in excess of
revenues recognized.
21
<PAGE> 23
Income from claims for additional contract compensation is recorded upon
settlement of the disputed amount. Claim settlements in 1996, 1995 and
1994 were not significant. Certain subsidiaries of the Company had
outstanding claims and claims in process of being filed at September 30,
1996. The extent of recovery, if any, on these pending claims is not
presently estimable.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from these
estimates.
Applying the percentage -of -completion method of recognizing revenues
requires the Company to estimate the outcome of its long-term contracts.
The Company forecasts such outcomes to the best of its knowledge and
belief of current and expected conditions, and its expected course of
action. Differences between the Company's estimates and actual results
often occur resulting in changes to reported revenues and earnings. Such
changes could have a material effect on future financial statements.
Cash Equivalents
For purposes of the consolidated statements of cash flows, the Company
considers all highly liquid debt instruments purchased with a maturity of
three months or less to be cash equivalents.
Cash balances at September 30, 1996 and 1995 include approximately
$2,252,000 and $1,616,000, respectively, in short-term time deposits
maintained in lieu of retention which will be released upon completion of
the related construction projects. Interest income on these deposits is
credited to the Company.
Inventories
Inventories are stated at the lower of cost (primarily first-in,
first-out) or market (net realizable value).
Depreciation and Amortization
The Company and its subsidiaries provide for depreciation and
amortization of property, plant and equipment using the straight-line
method based on the estimated useful lives of the assets (4 to 40 years)
or, if applicable, the remaining terms of the leases, whichever is
shorter.
The cost and accumulated depreciation applicable to assets sold or
otherwise disposed of are eliminated from the asset and accumulated
depreciation accounts. Gain or loss on disposition is reflected in other
income or expenses.
22
<PAGE> 24
Income Taxes
The Company accounts for income taxes under the provisions of Statement
of Financial Accounting Standards No. 109, "Accounting for Income Taxes,"
which requires recognition of deferred tax liabilities and assets for the
expected future tax consequences of events that have been included in the
financial statements or tax returns. Under this method, deferred tax
liabilities and assets are determined based on the difference between the
financial statement and tax bases of assets and liabilities using enacted
rates in effect for the year in which the differences are expected to
reverse.
Earnings per Share
Earnings per share is based on the weighted average number of common
shares outstanding during the year.
(2) Note Receivable from Related Party
The Company has a note receivable from Halau Corporation which is owned
by three principal stockholders and an officer of the Company. The
promissory note is payable over 30 years with quarterly principal and
interest payments of $87,000 computed at 9.5% per annum and is secured by
a deed of trust on real estate and a security interest in the corporate
assets of the Buyer.
(3) Receivables
Contract receivables represent only those amounts which actually have
been billed for work performed. Contract retentions are collectible upon
the owners' approval of contract performance. Based upon anticipated
contract completion dates, these retainages are expected to be collected
as follows during the fiscal years ending September 30:
1997 $ 5,827,000
1998 694,000
------------------
$ 6,521,000
==================
23
<PAGE> 25
(4) Long-Term Debt and Short-Term Credit Facilities
Long-term debt consists of the following at September 30, 1996 and 1995:
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
Bank mortgage payable, secured by first mortgage on real property,
payable over 8 years, with monthly installments based on a 20-year
amortization, with unpaid principal balance due August 2001. Monthly
principal and interest payments of $17,643 from September 1996 to
August 1997 based on a fixed rate of 8.75%; option thereafter for a
fixed rate based on market rate or variable rate at 1-3/4% over prime $1,863,000 1,911,000
Bank mortgage payable, secured by first mortgage on real property,
payable over 15 years, with monthly installments based on a 15-year
amortization, with initial fixed interest rate of 7.75% per annum and
monthly principal and interest payments of $2,643 commencing June
1996 to May 2001; thereafter for a variable rate at 2.75% over the
yield of the one-year US Treasury Security, with unpaid principal
balance due June 2011 277,000 --
---------- ----------
2,140,000 1,911,000
Less current installments of long-term debt 61,000 48,000
---------- ----------
Long-term debt, excluding current installments $2,079,000 1,863,000
========== ==========
</TABLE>
At September 30, 1996, annual maturities of long-term debt for the next
five years are as follows:
<TABLE>
<CAPTION>
<C> <C>
1997 $ 61,000
1998 70,000
1999 82,000
2000 89,000
2001 1,623,000
Thereafter 215,000
----------
$2,140,000
==========
</TABLE>
Short-Term Credit Facilities
Amelco Industries (Industries), a wholly owned contracting subsidiary of
the Company, has a $5,000,000 revolving line of credit with a bank for
working capital purposes. At September 30, 1996, Industries had
outstanding borrowings of $600,000 under this line. There were no
borrowings under this line at September 30, 1995. Borrowings under this
agreement bear interest at 3/8% over the prime rate (8.25% and 8.75% at
September 30, 1996 and 1995, respectively) and are secured by receivables
and retentions of Industries and a corporate guarantee by the Company.
The line of credit is subject to renewal by the bank in February 1997.
The Company has a $2,000,000 revolving line of credit with a bank for
working capital purposes. At September 30, 1996, the Company had no
outstanding borrowings under this line. At September 30, 1995, the
Company had outstanding borrowings of $900,000 under this line.
Borrowings under this line are secured by accounts receivable, inventory,
contract rights, furniture, fixtures and equipment and leasehold property
of the Company's operations in
24
<PAGE> 26
Hawaii. Advances under the line bear interest at the bank's prime rate
of interest . The Company also has a $250,000 line of credit for the
issuance of letters of credit. There were no letters of credit
outstanding at September 30, 1996. These credit arrangements are
subject to renewal by the bank in March 1997.
Interest Paid
Interest payments made during fiscal years 1996, 1995 and 1994 totaled
$387,000, $317,000 and $327,000, respectively.
(5) Income Taxes
Income tax expense for the years ended September 30, 1996, 1995 and 1994
is comprised of the following components:
<TABLE>
<CAPTION>
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
Current tax expense:
U.S. Federal $ 421,000 723,000 671,000
State and U.S. possessions 79,000 146,000 115,000
--------- --------- ---------
500,000 869,000 786,000
--------- --------- ---------
Deferred tax expense (benefit):
U.S. Federal (4,000) (154,000) (222,000)
State and U.S. possessions 1,000 (24,000) (19,000)
--------- --------- ---------
(3,000) (178,000) (241,000)
--------- --------- ---------
--------- --------- ---------
$ 497,000 691,000 545,000
========= ========= =========
</TABLE>
Net income taxes paid for fiscal years 1996, 1995 and 1994 were $575,000,
$1,122,000 and $692,000, respectively.
Significant components of the Companys' deferred income tax assets
(liabilities) at September 30, 1996 and 1995 are as follows:
<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
Deferred tax assets:
Insurance accruals $ 321,000 333,000
State taxes 74,000 118,000
Vacation 72,000 80,000
Depreciation 15,000 3,000
Other 4,000 5,000
--------- ---------
486,000 539,000
Valuation allowance for deferred tax assets (83,000) (148,000)
--------- ---------
Total deferred tax assets 403,000 391,000
--------- ---------
Deferred tax liabilities:
Installment gain on sale of real estate 187,000 179,000
--------- ---------
Net deferred tax asset $ 216,000 212,000
========= =========
</TABLE>
25
<PAGE> 27
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
Included in accompanying consolidated balance
sheets under the following
captions:
Deferred tax assets $216,000 231,000
Deferred tax liability -- (19,000)
======== ========
Net deferred tax asset $216,000 212,000
======== ========
</TABLE>
The valuation allowance for deferred tax assets as of September 30, 1996
and 1995 was $83,000 and $148,000, respectively. The net change in the
total valuation allowance for the year ended September 30, 1996 was a
decrease of $65,000. In assessing the realizability of deferred tax
assets, management considers whether it is more likely than not that some
portion or all of the deferred tax assets will not be realized. The
ultimate realization of deferred tax assets is dependent upon the
generation of future taxable income during the periods in which those
temporary differences become deductible.
Income tax expense differed from the amounts computed by applying the
U.S. Federal income tax rate of 34% in 1996, 1995 and 1994 to earnings
before income taxes as follows:
<TABLE>
<CAPTION>
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
Computed "expected" tax expense $ 412,000 580,000 469,000
Increase (decrease) in taxes resulting from:
State income tax expense, net of Federal income taxes 54,000 81,000 79,000
Nondeductible portion of entertainment expense 32,000 39,000 8,000
Other miscellaneous items, net (1,000) (9,000) (11,000)
--------- --------- ---------
$ 497,000 691,000 545,000
========= ========= =========
</TABLE>
(6) Employee Retirement Plans
The Company and its subsidiaries contribute to multi-employer pension
plans, primarily defined benefit plans, as required by collective
bargaining agreements. Amounts charged to construction cost and
contributed to these plans in 1996, 1995 and 1994 aggregated $1,973,000,
$1,567,000 and $1,839,000, respectively.
The Company sponsors a defined contribution plan. All qualified
non-bargaining U.S. employees of the Company are eligible to participate
in the plan and may make voluntary contributions to the plan subject to
certain limitations and restrictions. The amount of voluntary
contributions and investment income thereon is fully vested and
non-forfeitable; however, the interest of each participant in the
Company's contributions and earnings on investments, less expenses, is
vested in accordance with the plan. There is 100% vesting at retirement,
disability or death of a participant.
Under the terms of the plan, the accumulated balance of vested benefits
in each participant's account is paid to the individual upon termination,
retirement or death. Payment may be made in lump sum or in annual
installments over a period not to exceed the participant's life
expectancy. Any amounts forfeited upon termination or retirement are used
to reduce future contributions of the Company in accordance with the
plan.
26
<PAGE> 28
The Company's contribution under the defined contribution plan is a
percentage of each employee's contribution. Amounts charged to general
and administrative expense by the Company related to the plan for the
years ended September 30, 1996, 1995 and 1994 were $40,000, $40,000 and
$41,000, respectively.
(7) Leases
Operating Leases
The Company and its subsidiaries lease various properties and equipment
under long-term agreements which expire at varying dates through 2029,
including a lease of land on which an office building and warehouse have
been constructed. Real property leases generally provide for the Company
to pay for taxes, maintenance and insurance applicable to the leased
properties, and certain of these leases provide for re-negotiation of
annual rentals at specified dates.
At September 30, 1996, minimum rental obligations under noncancelable
operating leases (primarily real property) in excess of one year are as
follows:
<TABLE>
<CAPTION>
<S> <C>
1997 $ 640,000
1998 473,000
1999 370,000
2000 287,000
2001 232,000
2002 and thereafter 6,327,000
-------------
$ 8,329,000
=============
</TABLE>
Rent expense on operating leases, including leases less than one year,
for 1996, 1995 and 1994 was $2,127,000, $2,104,000 and $1,437,000,
respectively.
The Company and its subsidiaries have leased certain owned real property
to others including primarily a lease of land and improvements under a
noncancelable lease which expires in 2000. The lease provides for the
lessee to pay for taxes, maintenance and insurance applicable to the
leased property and, at the end of the fixed term, provides an option to
the lessee to extend for four successive terms of five years each at a
rent to be agreed upon. At September 30, 1996, minimum future lease
rentals to be received by the Company are as follows:
<TABLE>
<S> <C>
1997 $ 178,000
1998 178,000
1999 178,000
2000 178,000
2001 44,000
-----------------
$ 756,000
=================
</TABLE>
(8) Litigation
There are various lawsuits pending against and claims being pursued by
the Company and its subsidiaries arising out of the normal course of
business. It is management's present opinion that the outcome of these
proceedings will not have a material effect on the Company's consolidated
financial statements taken as a whole.
27
<PAGE> 29
(9) Minority Interest
Minority interest represents the minority stockholder's proportionate
share of the equity and the income or loss of an 89%-owned consolidated
subsidiary. The Company purchased a 79% interest in this contracting
company in August 1992 for $79,000 and acquired an additional 10%
interest in March 1995 for $15,000.
(10) Investment in and Advances to Joint Ventures
The Company has had interests in various construction joint ventures with
other parties under arrangements which provide for the sharing of profits
or losses ranging from 49% to 50%. Investments in these joint ventures
are stated at cost plus the equity in undistributed earnings. Combined
financial information of the joint ventures in summary form as of and for
the years ended September 30, 1996, 1995 and 1994 follows:
<TABLE>
<CAPTION>
1996 1995 1994
----------- ---------- -----------
<S> <C> <C> <C>
Combined information:
Current assets (primarily cash and
receivables) $ 344,000 105,000 5,638,000
Equipment 8,000 -- 161,000
Less liabilities (primarily accounts
payable) (253,000) (16,000) (3,524,000)
----------- ---------- -----------
Net assets $ 99,000 89,000 2,275,000
=========== ========== ===========
Revenues $ 1,138,000 13,294,000 11,908,000
=========== ========== ===========
Net income $ 46,000 5,473,000 1,817,000
=========== ========== ===========
Company's interest:
Share of revenues $ 559,000 6,661,000 5,854,000
=========== ========== ===========
Share of net income $ 24,000 2,576,000 893,000
=========== ========== ===========
Share of net assets $ 50,000 78,000 1,120,000
Advances to joint venture 88,000 -- --
=========== ========== ===========
Investment in and advances to
joint venture $ 138,000 78,000 1,120,000
=========== ========== ===========
</TABLE>
The Company's proportionate share of revenues and operating income from
these construction joint ventures has been included in the consolidated
statements of earnings.
28
<PAGE> 30
(11) Costs and Estimated Earnings on Uncompleted Contracts
<TABLE>
<CAPTION>
1996 1995
------------- -------------
<S> <C> <C>
Costs incurred on uncompleted contracts $ 233,086,000 202,485,000
Estimated earnings to date 15,837,000 12,879,000
------------- -------------
248,923,000 215,364,000
Less billings to date 249,802,000 215,371,000
------------- -------------
$ (879,000) (7,000)
============= =============
Included in accompanying consolidated
balance sheets under the following
captions:
Costs and recognized profits in excess of
billings on uncompleted contracts $ 6,121,000 6,541,000
Billings in excess of costs and recognized
profits on uncompleted contracts (7,000,000) (6,548,000)
------------- -------------
$ (879,000) (7,000)
============= =============
</TABLE>
(12) Fair Value of Financial Instruments
The carrying amounts of cash, receivables, costs and recognized profits
in excess of billings on uncompleted contracts, short-term borrowings,
short-term note payable, trade accounts payable and billings in excess of
costs and recognized profits on uncompleted contracts approximate fair
value because of the short-term maturity of these instruments.
Note receivable from related party - noncurrent
The carrying amount of the Company's note receivable to related party-
noncurrent approximates fair value because the interest rate approximates
currently available borrowing rates for similar types of debt.
Long-term debt
The carrying amount of the long-term debt approximates fair value because
of the variable rate provisions of the bank mortgages.
29
<PAGE> 31
Item 9. CHANGES IN ACCOUNTANTS OR DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information required by this item with respect to directors will be
contained in the Company's 1997 Proxy Statement and is incorporated herein by
reference.
Information concerning the executive officers of the Company is
provided following Item 4, Part I and is incorporated herein by reference.
Item 11. EXECUTIVE COMPENSATION
Information required by this item will be contained in the Company's
1997 Proxy Statement and is incorporated herein by reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information required by this item will be contained in the Company's
1997 Proxy Statement and is incorporated herein by reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information required by this item will be contained in the Company's
1997 Proxy Statement and is incorporated herein by reference.
30
<PAGE> 32
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENTS,
AND REPORTS ON FORM 8-K
(A) 1. Consolidated Financial Statements -
Included in Item 8, Part II of this Form 10-K
Amelco Corporation and Subsidiaries:
Independent Auditors' Report
Consolidated Balance Sheets - September 30, 1996
and 1995 Consolidated Statements of Earnings -
Three years ended
September 30, 1996
Consolidated Statements of Stockholders' Equity - Three
years ended September 30, 1996
Consolidated Statements of Cash Flows - Three years ended
September 30, 1996
Notes to Consolidated Financial Statements
(B) Report on Form 8-K -
None.
31
<PAGE> 33
Schedules Omitted:
Schedules are omitted because they are not required or are not applicable.
(C) 3. Exhibits -
Exhibit (3) (3.1) Articles of Incorporation effective November 8, 1988
incorporating the Registrant in the State of
California filed as Exhibit 3(iii)a to Form 10-K for
the year ended September 30, 1989 are incorporated
herein by reference.
(3.2) Bylaws of the Registrant relating to the
incorporation in the State
of California effective November
8, 1988 filed as Exhibit 3(iii)b
to Form 10-K for the year ended
September 30, 1989 are
incorporated herein by reference.
(4) Instruments defining the rights of
security holders, including indentures -
Reference is made to the Articles of
Incorporation and Bylaws filed as Exhibit
(3).
(9) Voting trust agreement - none.
(10) Material Contracts -
(10.4) Memorandum of Employment
Agreement between Amelco
Corporation and Mark S. Angelich
dated September 21, 1989 filed as
Exhibit (10.4) to Form 10-K for
the year ended September 30, 1990
is incorporated herein by
reference.
(10.5) Real Property Lease Agreement
between the Trustees Under the
Will and Estate of Samuel M.
Damon and Amelco Corporation
dated April 24, 1979 filed as
Exhibit (10.5) to Form 10-K for
the year ended September 30, 1990
is incorporated herein by
reference.
(10.8) Credit Agreement between Amelco
Corporation and Bank of Hawaii
dated June 26, 1989 filed as
Exhibit (10.8) to Form 10-K for
the year ended September 30, 1990
is incorporated herein by
reference.
(10.9) Agreement for Purchase and Sale
of Real Property between Amelco
Industries and Halau Corporation
dated August 30, 1991 filed as
Exhibit (10.9) to Form 10-K for
the year ended September 30, 1991
is incorporated herein by
reference.
32
<PAGE> 34
(10.11) Lease Agreement between Halau Corporation and
Amelco Industries dated October 1, 1993 filed as
Exhibit (10.11) to Form 10-K for the year ended
September 30, 1993 is incorporated herein by
reference.
(10.12) Death Benefit Agreement between Amelco Corporation
and Samuel M. Angelich dated March 7, 1994 filed
as Exhibit (10.12) to Form 10-K for the year ended
September 30, 1994 is incorporated herein by
reference.
(10.13) Credit Agreement between Amelco Industries and
Imperial Bank dated February 28, 1994 filed as
Exhibit (10.13) to Form 10-K for the year ended
September 30, 1994 is incorporated herein by
reference.
(10.14) Amendment to Credit Agreement between Amelco
Corporation and Bank of Hawaii dated May 16, 1990
filed as Exhibit (10.14) to Form 10-K for the year
ended September 30, 1994 is incorporated herein by
reference.
(10.15) Second Amendment to Credit Agreement between
Amelco Corporation and Bank of Hawaii dated
February 25, 1994 filed as Exhibit (10.15) to Form
10-K for the year ended September 30, 1994 is
incorporated herein by reference.
(11) Statement re computation of per share earnings - not
applicable.
(12) Statements re computation of ratios - not applicable.
(13) Annual report to security holders - not applicable.
(18) Letter re change in accounting principles - not applicable.
(19) Previously unfiled documents - none.
(22) Subsidiaries of the Registrant - Exhibit 22.
(23) Published report regarding matters submitted to vote of
security holders - none.
(24) Consents of experts and counsel - not applicable.
(25) Power of attorney - not applicable.
(27) Financial Data Schedule (EDGAR version only)
33
<PAGE> 35
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 (Registrant)
Date: December 20, 1996 By /s/ Patrick T. Miike
--------------------------------------
Patrick T. Miike
Vice President - Finance and Treasurer
(Principal Financial and Accounting
Officer of the Registrant)
Pursuant to the requirement of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
/s/ Samuel M. Angelich Chairman of the Board, December 20, 1996
- ------------------------
Samuel M. Angelich President and Chief Executive
Officer
/s/ Mark S. Angelich Director and Executive Vice December 20, 1996
- ------------------------
Mark S. Angelich President
/s/ Patrick T. Miike Vice President - Finance December 20, 1996
- ------------------------
Patrick T. Miike and Treasurer
/s/ John M. Carmack Director and Secretary December 20, 1996
- ------------------------
John M. Carmack
34
<PAGE> 1
Exhibit 22: SUBSIDIARIES OF THE REGISTRANT
All subsidiaries of the Company are listed below:
<TABLE>
<CAPTION>
PERCENTAGE OF
VOTING
SECURITIES
JURISDICTION OF OWNED BY THE
SUBSIDIARY COMPANY INCORPORATION COMPANY
- -------------------------------------- ----------------- -----------------
<S> <C> <C>
Air Engineering Company, Inc. Hawaii 100%
Amelco, Inc. Nevada 100
Amelco Industries California 100
American Electric Company, Limited Hawaii 100
Plateau Electrical Constructors, Inc. Utah 100
Weststar Engineering, Inc. California 89
</TABLE>
35
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANACIAL INFORMATION EXTRACTED FROM FORM
10-K FOR YEAR ENDED SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> SEP-30-1996
<CASH> 3,841
<SECURITIES> 0
<RECEIVABLES> 24,364
<ALLOWANCES> 879
<INVENTORY> 62
<CURRENT-ASSETS> 34,037
<PP&E> 8,167
<DEPRECIATION> 5,884
<TOTAL-ASSETS> 40,046
<CURRENT-LIABILITIES> 22,687
<BONDS> 2,079
0
0
<COMMON> 5,535
<OTHER-SE> 9,717
<TOTAL-LIABILITY-AND-EQUITY> 40,046
<SALES> 115,718
<TOTAL-REVENUES> 115,718
<CGS> 105,254
<TOTAL-COSTS> 105,254
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 387
<INCOME-PRETAX> 1,213
<INCOME-TAX> 497
<INCOME-CONTINUING> 703
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 703
<EPS-PRIMARY> 0.49
<EPS-DILUTED> 0.49
</TABLE>
