<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, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____to____
Commission file number 0-6079
AMELCO CORPORATION
(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 June 30, 1997
<S> <C>
Common Stock, without par value 1,443,088
</TABLE>
<PAGE> 2
AMELCO CORPORATION AND SUBSIDIARIES
INDEX
<TABLE>
<CATION>
<S> <C>
PART I. FINANCIAL INFORMATION PAGE
Consolidated Balance Sheets-
June 30, 1997 and September 30, 1996 3
Consolidated Statements of Earnings -
Nine months ended June 30, 1997 and 1996 4
Consolidated Statements of Earnings -
Three months ended June 30, 1997 and 1996 5
Consolidated Statements of Cash Flow-
Nine months ended June 30, 1997 and 1996 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)
June 30, September 30,
1997 1996
------------- -------------
<S> <C> <C>
Assets
- ------
Cash (note 4) $ 3,211,000 3,841,000
Receivables, net (note 2) 28,882,000 23,485,000
Inventories 67,000 62,000
Investment in and advances to joint ventures 295,000 138,000
Costs and recognized profits in excess of
billings on uncompleted contracts 7,921,000 6,121,000
Deferred tax assets 136,000 216,000
Prepaid expenses and other 45,000 174,000
----------- -----------
Total Current Assets 40,557,000 34,037,000
Note receivable from related party,
noncurrent (note 5) - 3,271,000
Other notes receivable and noncurrent investments 239,000 307,000
Property, plant and equipment, net (note 5) 6,223,000 2,273,000
Other assets 198,000 158,000
----------- -----------
Total Assets 47,217,000 40,046,000
=========== ===========
Liabilities and Stockholders' Equity
- ------------------------------------
Short term borrowings 1,100,000 600,000
Current portion of long term debt 71,000 61,000
Accounts payable 14,597,000 11,942,000
Accrued expenses 3,267,000 2,803,000
Federal and state income taxes 104,000 -
Billings in excess of costs and recognized
profits on uncompleted contracts 9,145,000 7,000,000
Other current liabilities 734,000 281,000
----------- -----------
Total Current Liabilities 29,018,000 22,687,000
Long term debt, excluding current portion 2,024,000 2,079,000
Minority interest in subsidiary 37,000 28,000
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 6,188,000 5,302,000
-------------- ------------
19,150,000 18,264,000
Less treasury shares (3,012,000) (3,012,000)
-------------- ------------
Total stockholders' equity 16,138,000 15,252,000
------------- ------------
Total Liabilities and
Stockholders' Equity $ 47,217,000 40,046,000
============= ============
</TABLE>
<PAGE> 4
Amelco Corporation and Subsidiaries
Consolidated Statements of Earnings
Nine Months Ended June 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
------------- -------------
<S> <C> <C>
Revenues $ 76,674,000 88,322,000
Costs and operating expenses 67,686,000 80,421,000
------------- -------------
Gross profit 8,988,000 7,901,000
General and administrative expenses 7,456,000 6,920,000
------------- -------------
Operating income 1,532,000 981,000
------------- -------------
Other income (expense):
Interest expense (272,000) (295,000)
Other, net 250,000 276,000
------------- -------------
Total other income (expense) (22,000) (19,000)
------------- -------------
Earnings before income taxes 1,510,000 962,000
Income tax expense 615,000 394,000
Minority interest in earnings
of subsidiary 9,000 15,000
------------ ------------
Net earnings $ 886,000 553,000
============ ============
Earnings per share:
Net earnings per common share $ 0.61 $ 0.38
=========== =========
Weighted average number of common shares
outstanding during the period 1,443,000 1,443,000
========== ==========
</TABLE>
<PAGE> 5
Amelco Corporation and Subsidiaries
Consolidated Statements of Earnings
Three Months Ended June 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
------------- ------------
<S> <C> <C>
Revenues $ 32,197,000 29,750,000
Costs and operating expenses 29,296,000 26,970,000
------------- ------------
Gross profit 2,901,000 2,780,000
General and administrative expenses 2,404,000 2,484,000
------------- ------------
Operating income 497,000 296,000
------------- ------------
Other income (expense):
Interest expense (96,000) (85,000)
Other, net 84,000 106,000
------------- ------------
Total other income (expense) (12,000) 21,000
------------- ------------
Earnings before income taxes 485,000 317,000
------------- ------------
Income tax expense 200,000 130,000
Minority interest in earnings
of subsidiary 4,000 9,000
------------- ------------
Net earnings $ 281,000 178,000
============= ============
Earnings per share:
Net earnings per common share $ 0.19 $ 0.12
=========== ===========
Weighted average number of common shares
outstanding during the period 1,443,000 1,443,000
=========== ===========
</TABLE>
<PAGE> 6
Amelco Corporation and Subsidiaries
Consolidated Statements of Cash Flows
Nine Months Ended June 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
- -------------------------------------
Net earnings $ 886,000 553,000
------------ -----------
Adjustments to reconcile income to net cash
provided (used) by operating activities:
Depreciation and amortization 292,000 314,000
Gain on sale of assets (1,000) (1,000)
(Increase) decrease in assets and increase
(decrease) in liabilities:
Accounts receivable (5,397,000) 625,000
Investment in joint venture (157,000) 33,000
Inventories (5,000) 5,000
Costs and recognized profits in excess
of billings on uncompleted contracts (1,800,000) 161,000
Prepaid expenses 129,000 (74,000)
Other assets (40,000) (38,000)
Accounts payable and accrued expenses 3,119,000 (2,897,000)
Billings in excess of costs and recognized
profits on uncompleted contracts 2,145,000 1,080,000
Income taxes payable 184,000 2,000
Other liabilities 453,000 (133,000)
------------ -----------
Total adjustments (1,078,000) (923,000)
------------ -----------
Net cash (used) by operating activities (192,000) (370,000)
------------ -----------
Cash flows from investing activities:
- -------------------------------------
Decrease (increase) in notes receivable and
other investments 3,339,000 19,000
Capital expenditures (4,242,000) (846,000)
Proceeds from sale of assets 1,000 21,000
Other 9,000 15,000
------------ -----------
Net cash (used) by investing activities (893,000) (791,000)
------------ -----------
Cash flows from financing activities:
- -------------------------------------
Borrowings under revolving line of credit, net 500,000 1,200,000
Repayments of long term debt (45,000) (37,000)
Borrowings of Long-term debt - 281,000
Borrowings under short term note payable - 638,000
Repayments of short term note payable - (682,000)
Dividends paid - (217,000)
---------- -----------
Net cash provided by financing activities 455,000 1,183,000
---------- -----------
Net increase (decrease) in cash and
cash equivalents (630,000) 22,000
Cash and cash equivalents at beginning of period 3,841,000 3,863,000
---------- ----------
Cash and cash equivalents at end of period $ 3,211,000 3,885,000
============ ===========
</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
June 30, 1997 and September 30, 1996, the results of its operations for the
three and nine months ended June 30, 1997 and 1996 and changes in cash flow
for the nine months ended June 30, 1997 and 1996. 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, 1996.
2. Retentions: Contract retentions which are collectible upon the owner's
approval of contract performance on construction contracts are included under
receivables and amount to $5,611,000 and $6,521,000 at June 30, 1997 and
September 30, 1996, respectively.
3. Backlog: The backlog of uncompleted contracting work was approximately
$113,141,000 on contracts in force as of June 30, 1997, compared with
$89,517,000 as of September 30, 1996, inclusive of the Company's proportionate
share of contract backlog from joint ventures amounting to $44,000 and $26,000
at June 30, 1997 and September 30, 1996, respectively.
4. Cash: Cash balances at June 30, 1997 include approximately $2,107,000
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. Property Acquisition: On April 4, 1997, the Company, through a newly
formed wholly-owned subsidiary, purchased an office and warehouse property
from Halau Corporation for a sales price of $3,964,000. The Company had been
leasing this property as an office and administrative facility for its
construction operations. The terms of the sale provided for a cash payment of
$675,000 and the reconveyance of the balance of a note receivable owed by
Halau Corporation to the Company. At September 30, 1996, the note receivable
from Halau Corporation amounted to $3,306,000 (comprised of $3,271,000 as
noncurrent note receivable and $35,000 as current receivable).
<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 $3,841,000 at September 30, 1996 to
$3,211,000 at June 30, 1997. This decrease in cash of $630,000 consisted
primarily of $192,000 used by operating activities and $893,000 by investing
activities. These uses of cash were offset by $455,000 provided by financing
activities.
Cash used by operating activities consisted primarily of increases in
accounts receivable of $5,397,000 and costs and recognized profits in excess
of billings on uncompleted contracts of $1,800,000. This change was offset by
increases in accounts payables and accrued expenses aggregating $3,119,000,
billings in excess of costs and recognized profits on uncompleted contracts of
$2,145,000 and net earnings from operating activities of $886,000. The change
in receivables arises primarily from increased billings in the current quarter
on new projects in California which will be collected in the following period.
The change in costs and recognized profits in excess of billings on
uncompleted contracts reflects costs incurred, primarily in the California
operations, which will be billed in the succeeding quarter.
Net cash used by investing activities included capital expenditures of
$4,242,000, consisting of equipment purchases approximating $278,000 and the
acquisition of an office property for $3,964,000 as further described in note
5 to the consolidated financial statements. This change was offset by
decreases in notes receivables, including primarily the reconveyance of a note
receivable to the owner of the office property as discussed in note 5 to the
consolidated financial statements.
Net cash provided by financing activities included primarily an increase
of $500,000 in borrowings under the Company's lines of credit which was offset
by repayments of long term debt of $45,000.
The Company's construction backlog amounted to approximately $113,141,000
at June 30, 1997, of which approximately $95.0 million was in California, $3.8
million was in Hawaii and the Pacific Basin, and $14.3 million in other
continental U. S. states. The Company's continues to maintain its lines of
credit aggregating $7,000,000. At June 30, 1997, there was $1,100,000 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 13.2% in the nine month period ended
June 30, 1997 as compared to the prior year. The change in the nine month
period results primarily from revenue decreases of approximately $5.4 million
from the California operations, $3.6 million from the Hawaii operations and
$2.7 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 $1,087,000 in the nine month period ended June
30, 1997 as compared to the previous period. Gross profits as a percentage of
revenue were 11.7% and 8.9% in the nine month periods ended June 30, 1997 and
1996, 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, 1997 increased by approximately $536,000 as compared to the previous
period. The change reflects primarily increases in staffing levels,
compensation costs and estimating expenses. Staffing level changes included
increases in project management, project engineers and administrative jobsite
staff in response to the requirements of ongoing contracts in progress.
Interest expense decreased by $23,000 in the nine month period ended June
30, 1997 due primarily to higher average outstanding borrowings under the
Company's lines of credit in the previous period as compared to the current
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 May 29,
1997 at which 1,047,484 or 72.6% 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: August 14, 1997 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 FORM 10-Q
FOR THE NINE MONTHS ENDED JUNE 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> JUN-30-1997
<CASH> 3,211
<SECURITIES> 0
<RECEIVABLES> 29,762
<ALLOWANCES> 880
<INVENTORY> 67
<CURRENT-ASSETS> 40,557
<PP&E> 12,260
<DEPRECIATION> 6,037
<TOTAL-ASSETS> 47,217
<CURRENT-LIABILITIES> 29,018
<BONDS> 2,024
0
0
<COMMON> 5,535
<OTHER-SE> 10,603
<TOTAL-LIABILITY-AND-EQUITY> 47,217
<SALES> 76,674
<TOTAL-REVENUES> 76,674
<CGS> 67,686
<TOTAL-COSTS> 67,686
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 272
<INCOME-PRETAX> 1,510
<INCOME-TAX> 615
<INCOME-CONTINUING> 886
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 886
<EPS-PRIMARY> .61
<EPS-DILUTED> .61
</TABLE>
