<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, 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
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
19208 South Vermont Avenue
Gardena, California 90248
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(Address of principal executive offices) (Zip Code)
(310) 327-3070
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO ____
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
Outstanding at
Class of Common Stock March 31, 1997
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<S> <C>
Common Stock, without par value 1,443,088
</TABLE>
<PAGE> 2
AMELCO CORPORATION AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
<S> <C>
PART I. FINANCIAL INFORMATION PAGE
Consolidated Balance Sheets-
March 31, 1997 and September 30, 1996 3
Consolidated Statements of Earnings -
Six months ended March 31, 1997 and 1996 4
Consolidated Statements of Earnings -
Three months ended March 31, 1997 and 1996 5
Consolidated Statements of Cash Flow-
Six months ended March 31, 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
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<PAGE> 3
Amelco Corporation and Subsidiaries
Consolidated Balance Sheets
<TABLE>
<CAPTION>
(Unaudited)
March 31, September 30,
1997 1996
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<S> <C> <C>
Assets
- ------
Cash (note 4) $ 3,638,000 3,841,000
Receivables, net (note 2) 21,026,000 23,485,000
Inventories 68,000 62,000
Investment in and advances to joint ventures 487,000 138,000
Costs and recognized profits in excess of
billings on uncompleted contracts 8,065,000 6,121,000
Deferred tax assets 211,000 216,000
Prepaid expenses and other 215,000 174,000
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Total Current Assets 33,710,000 34,037,000
Note receivable from related party,
noncurrent (note 5) 3,252,000 3,271,000
Other notes receivable and noncurrent investments 307,000 307,000
Property, plant and equipment, net 2,232,000 2,273,000
Other assets 198,000 158,000
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Total Assets 39,699,000 40,046,000
============ =============
Liabilities and Stockholders' Equity
- ------------------------------------
Short term borrowings 2,250,000 600,000
Current portion of long term debt 77,000 61,000
Accounts payable 9,533,000 11,942,000
Accrued expenses 2,593,000 2,803,000
Federal and state income taxes 99,000 -
Billings in excess of costs and recognized
profits on uncompleted contracts 6,622,000 7,000,000
Other current liabilities 601,000 281,000
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Total Current Liabilities 21,775,000 22,687,000
Long term debt, excluding current portion 2,033,000 2,079,000
Minority interest in subsidiary 34,000 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 5,907,000 5,302,000
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18,869,000 18,264,000
Less treasury shares (3,012,000) (3,012,000)
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Total stockholders' equity 15,857,000 15,252,000
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Total Liabilities and
Stockholders' Equity $ 39,699,000 40,046,000
============ =============
</TABLE>
<PAGE> 4
Amelco Corporation and Subsidiaries
Consolidated Statements of Earnings
Six Months Ended March 31, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
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<S> <C> <C>
Revenues $ 44,477,000 58,572,000
Costs and operating expenses 38,390,000 53,451,000
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Gross profit 6,087,000 5,121,000
General and administrative expenses 5,052,000 4,436,000
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Operating income 1,035,000 685,000
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Other income (expense):
Interest expense (176,000) (210,000)
Other, net 166,000 170,000
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Total other income (expense) (10,000) (40,000)
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Earnings before income taxes 1,025,000 645,000
Income tax expense 415,000 264,000
Minority interest in earnings (loss)
of subsidiary 5,000 6,000
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Net earnings $ 605,000 375,000
============ ============
Earnings per share:
Net earnings per common share $ 0.42 $ 0.26
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Weighted average number of common shares
outstanding during the period 1,443,000 1,443,000
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</TABLE>
<PAGE> 5
Amelco Corporation and Subsidiaries
Consolidated Statements of Earnings
Three Months Ended March 31, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
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<S> <C> <C>
Revenues $ 22,083,000 31,094,000
Costs and operating expenses 19,086,000 28,492,000
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Gross profit 2,997,000 2,602,000
General and administrative expenses 2,463,000 2,227,000
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Operating income 534,000 375,000
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Other income (expense):
Interest expense (103,000) (101,000)
Other, net 107,000 50,000
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Total other income (expense) 4,000 (51,000)
Earnings before income taxes 538,000 324,000
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Income tax expense 218,000 133,000
Minority interest in earnings (loss)
of subsidiary 3,000 3,000
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Net earnings $ 317,000 188,000
============ ============
Earnings per share:
Net earnings per common share $ 0.22 $ 0.13
============ ============
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
Six Months Ended March 31, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
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<S> <C> <C>
Cash flows from operating activities:
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Net earnings $ 605,000 375,000
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Adjustments to reconcile income to net cash
provided (used) by operating activities:
Depreciation and amortization 193,000 205,000
Gain on sale of assets (1,000) (7,000)
(Increase) decrease in assets and increase
(decrease) in liabilities:
Accounts receivable 2,459,000 1,536,000
Investment in joint venture (349,000) 44,000
Inventories (6,000) (4,000)
Costs and recognized profits in excess
of billings on uncompleted contracts (1,944,000) (39,000)
Prepaid expenses (41,000) (336,000)
Other assets (40,000) (38,000)
Accounts payable and accrued expenses (2,619,000) (2,315,000)
Billings in excess of costs and recognized
profits on uncompleted contracts (378,000) 509,000
Income taxes payable 104,000 13,000
Other liabilities 320,000 (69,000)
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Total adjustments (2,302,000) (501,000)
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Net cash (used) by operating activities (1,697,000) (126,000)
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Cash flows from investing activities:
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Decrease (increase) in notes receivable and
other investments 19,000 (33,000)
Proceeds from sale of assets 1,000 8,000
Capital expenditures (152,000) (645,000)
Other 6,000 6,000
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Net cash (used) by investing activities (126,000) (664,000)
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Cash flows from financing activities:
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Borrowings under revolving line of credit, net 1,650,000 425,000
Repayments of long term debt (30,000) (24,000)
Borrowings under short term note payable - 638,000
Repayments of short term note payable - (453,000)
Dividends paid - (217,000)
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Net cash provided by financing activities 1,620,000 369,000
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Net increase (decrease) in cash and
cash equivalents (203,000) (421,000)
Cash and cash equivalents at beginning of period 3,841,000 3,863,000
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Cash and cash equivalents at end of period $ 3,638,000 3,442,000
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</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, 1997 and September 30, 1996, the results of its operations for the
three and six months ended March 31, 1997 and 1996 and changes in cash flow
for the six months ended March 31, 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 $4,993,000 and $6,521,000 at March 31, 1997 and
September 30, 1996, respectively.
3. Backlog: The backlog of uncompleted contracting work was approximately
$109,203,000 on contracts in force as of March 31, 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 $216,000 and
$26,000 at March 31, 1997 and September 30, 1996, respectively.
4. Cash: Cash balances at March 31, 1997 include approximately $2,095,000
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. Subsequent Event: At March 31, 1997, the Company had a note
receivable from Halau Corporation amounting to $3,289,000 (comprised of
$3,252,000 as noncurrent note receivable and $37,000 as current receivable).
The note arose out of a sale of office property by the Company to Halau
Corporation in 1991. On, April 4, 1997, the Company, through a newly formed
wholly-owned subsidiary, purchased this office property from Halau
Corporation for a sales price of $3,964,000. The terms of the sale provided
for a cash payment of $675,000 and the reconveyance of the balance of the
$3,289,000 mortgage note to the Company.
<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
$3,638,000 at March 31, 1997. This decrease in cash of $203,000 consisted
primarily of $1,697,000 used by operating activities and $126,000 by investing
activities. These uses of cash were offset by $1,620,000 provided by financing
activities.
Cash used by operating activities consisted primarily of decreases in
accounts payable and accrued expenses aggregating $2,619,000, a decrease in
billings in excess of costs and recognized profits on uncompleted contracts of
$378,000 and an increase in costs and recognized profits in excess of billings
on uncompleted contracts of $1,944,000. This change was offset by decreases in
accounts receivables aggregating $2,459,000 and net earnings from operating
activities of $605,000.
Net cash provided by financing activities included primarily an increase
of $1,650,000 in borrowings under the Company's lines of credit which was
offset by repayments of long term debt of $30,000. Net cash used by investing
activities consisted primarily of capital expenditures of $152,000.
The Company's construction backlog amounted to approximately $109,203,000
at March 31, 1997, of which approximately $91.1 million was in California,
$4.0 million was in Hawaii and the Pacific Basin, and $14.1 million in other
continental U. S. states. The Company's revolving lines of credit aggregating
$7,000,000 were renewed in March 1997. At March 31, 1997, there was
$2,250,000 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 24.1% in the six month period ended
March 31, 1997 as compared to the prior year. The change in the six month
period results primarily from revenue decreases of approximately $10.1 million
from the California operations, $1.5 million from the Hawaii operations and
$2.5 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 $966,000 in the six month period ended March
31, 1997 as compared to the previous period. Gross profits as a percentage of
revenue were 13.7% and 8.7% in the six month periods ended March 31, 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 six month period ended March
31, 1997 increased by approximately $616,000 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 $34,000 in the six month period ended March
31, 1997 due primarily to decreased utilization of the Company's lines of
credit as compared to the previous period.
<PAGE> 10
Part II
Other Information
No events occurred during the three (3) month period ending March 31, 1997
which are reportable under this part.
Signatures
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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, 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 SIX MONTHS ENDED MARCH 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> MAR-31-1997
<CASH> 3,638
<SECURITIES> 0
<RECEIVABLES> 21,906
<ALLOWANCES> 880
<INVENTORY> 68
<CURRENT-ASSETS> 33,710
<PP&E> 8,262
<DEPRECIATION> 6,030
<TOTAL-ASSETS> 39,699
<CURRENT-LIABILITIES> 21,775
<BONDS> 2,033
0
0
<COMMON> 5,535
<OTHER-SE> 10,322
<TOTAL-LIABILITY-AND-EQUITY> 39,699
<SALES> 44,477
<TOTAL-REVENUES> 44,477
<CGS> 38,390
<TOTAL-COSTS> 38,390
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 176
<INCOME-PRETAX> 1,025
<INCOME-TAX> 415
<INCOME-CONTINUING> 605
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 605
<EPS-PRIMARY> .42
<EPS-DILUTED> .42
</TABLE>
