<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 December 31, 1996
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>
<CATION>
Outstanding at
Class of Common Stock December 31, 1996
--------------------- -----------------
<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-
December 31, 1996 and September 30, 1996 3
Consolidated Statements of Earnings -
Three months ended December 31, 1996 and 1995 4
Consolidated Statements of Cash Flow-
Three months ended December 31, 1996 and 1995 5
Notes to Consolidated Financial Statements 6
Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II.
Other Information 9
Signature Page 9
</TABLE>
<PAGE> 3
Amelco Corporation and Subsidiaries
Consolidated Balance Sheets
<TABLE>
<CAPTION>
(Unaudited)
December 31, September 30,
1996 1996
-------------- -------------
<S> <C> <C>
Assets
- -------
Cash (note 4) $4,229,000 3,841,000
Receivables, net (note 2) 17,929,000 23,485,000
Inventories 65,000 62,000
Investment in and advances to joint ventures 243,000 138,000
Costs and recognized profits in excess of
billings on uncompleted contracts 8,090,000 6,121,000
Deferred tax assets 200,000 216,000
Prepaid expenses and other 231,000 174,000
------------- ------------
Total Current Assets 30,987,000 34,037,000
Note receivable from related party, noncurrent 3,262,000 3,271,000
Other notes receivable and noncurrent investments 307,000 307,000
Property, plant and equipment, net 2,236,000 2,273,000
Other assets 198,000 158,000
------------- ------------
Total Assets $36,990,000 40,046,000
============= ============
Liabilities and Stockholders' Equity
- ------------------------------------
Short term borrowings $900,000 600,000
Current portion of long term debt 62,000 61,000
Accounts payable 9,204,000 11,942,000
Accrued expenses 2,468,000 2,803,000
Federal and state income taxes 50,000 -
Billings in excess of costs and recognized
profits on uncompleted contracts 6,494,000 7,000,000
Other current liabilities 180,000 281,000
------------ ------------
Total Current Liabilities 19,358,000 22,687,000
Long term debt, excluding current portion 2,062,000 2,079,000
Minority interest in subsidiary 30,000 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 5,590,000 5,302,000
------------ ------------
18,552,000 18,264,000
Less treasury shares (3,012,000) (3,012,000)
------------ ------------
Total stockholders' equity 15,540,000 15,252,000
------------ ------------
Total Liabilities and Stockholders' Equity $36,990,000 40,046,000
============ ============
</TABLE>
<PAGE> 4
Amelco Corporation and Subsidiaries
Consolidated Statements of Earnings
Three Months Ended December 31, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
------------- ------------
<S> <C> <C>
Revenues $22,394,000 27,478,000
Costs and operating expenses 19,304,000 24,959,000
------------- ------------
Gross profit 3,090,000 2,519,000
General and administrative expenses 2,589,000 2,209,000
------------- ------------
Operating income 501,000 310,000
------------- ------------
Other income (expense):
Interest expense (73,000) (109,000)
Other, net 59,000 120,000
------------- ------------
Total other income (expense) (14,000) 11,000
------------- ------------
Earnings before income taxes 487,000 321,000
Income tax expense 197,000 131,000
Minority interest in earnings of subsidiary 2,000 3,000
------------- ------------
Net earnings $288,000 187,000
============= ============
Earnings per share:
Net earnings per common share $0.20 $ 0.13
============= ============
Weighted average number of common shares
outstanding during the period 1,443,000 1,444,000
============= ============
<PAGE> 5
Amelco Corporation and Subsidiaries
Consolidated Statements of Cash Flows
Three Months Ended December 31, 1996 and 1995
(Unaudited)
</TABLE>
<TABLE>
<CAPTION>
1996 1995
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
- -------------------------------------
Net earnings $288,000 187,000
----------- -----------
Adjustments to reconcile income to net cash
provided (used) by operating activities:
Depreciation and amortization 97,000 100,000
Gain on sale of assets (1,000) -
(Increase) decrease in assets and
increase (decrease) in liabilities:
Accounts receivable 5,556,000 660,000
Investment in and advances to joint venture (105,000) 40,000
Inventories (3,000) 6,000
Costs and recognized profits in excess of
billings on uncompleted contracts (1,969,000) (1,131,000)
Prepaid expenses (57,000) (593,000)
Other assets (40,000) (38,000)
Accounts payable and accrued expenses (3,073,000) (2,086,000)
Billings in excess of costs and recognized
profits on uncompleted contracts (506,000) 999,000
Income taxes payable 66,000 74,000
Other liabilities (101,000) (79,000)
------------ -----------
Total adjustments (136,000) (2,048,000)
------------ -----------
Net cash provided (used) by operating activities $152,000 (1,861,000)
------------ -----------
Cash flows from investing activities:
- -------------------------------------
Decrease (increase) in notes receivable and
other investments 9,000 (42,000)
Increase (decrease) in minority interest 2,000 3,000
Proceeds from sale of assets 1,000 -
Capital expenditures (60,000) (116,000)
----------- ----------
Net cash (used) by investing activities $(48,000) (155,000)
----------- ----------
Cash flows from financing activities:
- ------------------------------------
Borrowings under revolving line of credit, net 300,000 1,050,000
Repayments of long term debt (16,000) (11,000)
Borrowings under short term note payable - 638,000
Repayments of short term note payable - (228,000)
----------- ----------
Net cash provided by financing activities $284,000 1,449,000
----------- ----------
Net increase (decrease) in cash and cash equivalents 388,000 (567,000)
Cash and cash equivalents at beginning of year 3,841,000 3,863,000
----------- ----------
Cash and cash equivalents at end of year $4,229,000 3,296,000
=========== ==========
<PAGE> 6
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 December 31, 1996 and September 30, 1996, the results of its operations
for the three months ended December 31, 1996 and 1995 and changes in cash
flow for the three months ended December 31, 1996 and 1995. These condensed
financial statements should be read in conjunction with the financial
statements and notes thereto included in the Company's annual report on Form
10-K for the year ended September 30, 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 $6,113,000 and $6,521,000 at December 31, 1996 and
September 30, 1996, respectively.
3. Backlog: The backlog of uncompleted contracting work was approximately
$98,812,000 on contracts in force as of December 31, 1996, 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
$720,000 and $26,000 at December 31, 1996 and September 30, 1996,
respectively.
4. Cash: Cash balances at December 31, 1996 include approximately $2,262,000
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.
<PAGE> 7
Amelco Corporation and Subsidiaries
Management's Discussion and Analysis of Financial Condition
and
Results of Operations
Capital Resources and Liquidity
- ------------------------------
Cash balances increased from $3,841,000 at September 30, 1996 to
$4,229,000 at December 31, 1996. This increase in cash of $388,000 consisted
primarily of $152,000 provided by operating activities and $284,000 by
financing activities. These increases were offset by $48,000 used by
investing activities.
Cash provided by operating activities consisted primarily of decreases
in accounts receivables aggregating $5,556,000 and net earnings from
operating activities of $288,000. This change was offset by decreases in
accounts payable and accrued expenses aggregating 3,073,000, a decrease in
billings in excess of costs and recognized profits on uncompleted contracts
of $506,000 and an increase costs and recognized profits in excess of
billings on uncompleted contracts of $1,969,000.
Net cash provided by financing activities included primarily an increase
of $300,000 in borrowings under the Company's lines of credit which was offset
by repayments of long term debt of $16,000. Net cash used by investing
activities consisted primarily of capital expenditures of $60,000.
The Company's construction backlog amounted to approximately
$98,812,000 at December 31, 1996, of which approximately $80.1 million was
in California, $5.2 million was in Hawaii and the Pacific Basin, and
$13.5 million in other continental U. S. states. The Company's revolving
lines of credit aggregating $7,000,000 are scheduled to be renewed in
March 1997. At December 31, 1996, there was $900,000 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> 8
Amelco Corporation and Subsidiaries
Management's Discussion and Analysis of Financial Condition and
Results of Operations
(continued)
Results of Operations
- ---------------------
Consolidated revenues decreased by 18.5% in the three month period ended
December 31, 1996 as compared to the prior year. The change in the three
month period results primarily from revenue decreases of approximately
$4.3 million from the California operations and $0.7 million from the Hawaii
and Pacific operations. 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 $571,000 in the three month period ended
December 31, 1996 as compared to the previous period. Gross profits as
a percentage of revenue were 13.8% and 9.2% in the three month periods ended
December 31, 1996 and 1995, respectively. The change in gross margins
reflects higher margins realized on construction work performed in the
current quarter in both the California and Hawaii markets as compared to the
previous period. The Company has experienced highly competitive conditions
in the commercial and industrial construction market. This is expected to
continue. 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 three month period ended
December 31, 1996 increased by approximately $380,000 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 $36,000 in the three month period ended
December 31, 1996 due primarily to lower levels of borrowings under the
Company's lines of credit as compared to the previous period. Other income
(expense), net decreased by $61,000 due primarily to a decrease in interest
income earned on short term cash investments.
<PAGE> 9
Part II
Other Information
No events occurred during the three (3) month period ended December 31, 1996
which are reportable under this part.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934 the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Amelco Corporation
Date: February 14, 1997 By /s/ Patrick T. Miike
------------------------
Patrick T. Miike
Chief Financial Officer,
Vice President-Finance and
Treasurer
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q
FOR THE THREE MONTHS ENDED DECEMBER 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 4,229
<SECURITIES> 0
<RECEIVABLES> 18,809
<ALLOWANCES> 880
<INVENTORY> 65
<CURRENT-ASSETS> 30,987
<PP&E> 8,207
<DEPRECIATION> 5,971
<TOTAL-ASSETS> 36,990
<CURRENT-LIABILITIES> 19,358
<BONDS> 2,062
0
0
<COMMON> 5,535
<OTHER-SE> 10,005
<TOTAL-LIABILITY-AND-EQUITY> 36,990
<SALES> 22,394
<TOTAL-REVENUES> 22,394
<CGS> 19,304
<TOTAL-COSTS> 19,304
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 73
<INCOME-PRETAX> 487
<INCOME-TAX> 197
<INCOME-CONTINUING> 288
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 288
<ESP-PRIMARY> .20
<ESP-DILUTED> .20
</TABLE>
