<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form l0-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
[x] Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act
of 1934 for the quarter period ended March 31, 1996.
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission file number 0-7907
------
C. H. Heist Corp.
- -----------------
(Exact name of registrant as specified in its charter)
New York 16-0803301
-------- ----------
(State or other jurisdiction of Employer Identification Number)
incorporation or organization)
810 North Belcher Road
Clearwater, Florida 34625
------------------- -----
(Address of principal executive offices) (Zip Code)
813-461-5656
------------
(Registrant's telephone number, including area code)
(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 (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
--- ---
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date - April 22, 1996.
Common stock, $.05 par value 2,872,773
---------------------------- ---------
(Class) (Outstanding shares)
1
<PAGE> 2
C. H. HEIST CORP. AND SUBSIDIARIES
Index
<TABLE>
<S> <C>
Part I
Financial Information
Condensed Consolidated Balance Sheets-
March 31, 1996 and December 31, 1995 3
Condensed Consolidated Statements of Operations- 4
thirteen-week period ended March 31, 1996 and the
fourteen-week period ended April 2, 1995
Condensed Consolidated Statements of Cash Flows-
thirteen-week period ended March 31, 1996 and the 5
fourteen-week period ended April 2, 1995
Notes to Condensed Consolidated Financial Statements 6
Independent Auditors' Review Report 7
Management's Discussion and Analysis of
results of operations and financial condition 8-9
Part II
Other Information 10
Signatures 11
</TABLE>
* * * * *
2
<PAGE> 3
Part I-Financial Information
C. H. HEIST CORP. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
March 31 December 31
Assets 1996 1995
---- ----
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 3,891,140 3,040,815
Receivables 13,721,564 14,283,008
Services in progress 1,988,376 990,729
Income taxes receivable 8,904 -
Parts and supplies 2,205,049 2,170,572
Prepaid expenses 945,291 187,647
Deferred income taxes 834,921 834,417
----------- ----------
Total current assets 23,595,245 21,507,188
----------- ----------
Property, plant and equipment, at cost 47,045,794 47,355,312
Less accumulated depreciation 30,015,939 29,712,818
----------- ----------
Net property, plant and equipment 17,029,855 17,642,494
----------- ----------
Deferred income taxes 131,922 131,922
Other assets 246,328 265,916
----------- ----------
$41,003,350 39,547,520
=========== ==========
Liabilities and Stockholders' Equity
Current liabilities:
Current installments of long-term debt $ 37,667 37,667
Accounts payable 2,745,708 1,306,819
Accrued expenses 3,667,561 3,879,265
Income taxes payable - 545,675
----------- ----------
Total current liabilities 6,450,936 5,769,426
Long-term debt, excluding current installments 7,773,779 6,980,057
Deferred income taxes 430,286 430,286
----------- ----------
Total liabilities 14,655,001 13,179,769
----------- ----------
Stockholders' equity (note 3):
Common stock of $.05 par value. Authorized
8,000,000 shares; issued 3,165,192 shares 158,260 158,260
Additional paid-in capital 4,253,689 4,253,689
Retained earnings 24,232,066 24,293,966
Equity adjustment from foreign currency translation (1,043,763) (1,086,261)
----------- ----------
27,600,252 27,619,654
Less cost of common stock in treasury - 292,419 shares (1,251,903) (1,251,903)
----------- ----------
Total stockholders' equity 26,348,349 26,367,751
----------- ----------
$41,003,350 39,547,520
=========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE> 4
C. H. HEIST CORP. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Thirteen- Fourteen-
week week
period period
ended ended
March 31 April 2
1996 1995
---- ----
<S> <C> <C>
Net sales $25,769,004 24,543,886
Cost of sales 22,508,737 21,744,816
----------- ----------
Gross profit 3,260,267 2,799,070
Selling, general and administrative expenses 3,331,314 3,282,268
----------- ----------
Operating (loss) (71,047) (483,198)
----------- ----------
Other income (expense):
Interest income 13,535 32,233
Interest expense (80,427) (111,333)
Gain on disposal of property, plant
and equipment, net 62,409 17,406
Amortization of other assets (31,007) (29,207)
Miscellaneous 5,551 1,398
----------- ----------
Total other income (expense) net (29,939) (89,503)
----------- ----------
(Loss) before income taxes (100,986) (572,701)
Income tax benefit 39,086 225,072
----------- ----------
Net (loss) $ (61,900) (347,629)
=========== ==========
Net (loss) per share $ (.02) (.12)
=========== ==========
Weighted average number of common shares outstanding 2,872,773 2,870,273
============ ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE> 5
C. H. HEIST CORP. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Thirteen- Fourteen-
week week
period period
ended ended
March 31 April 2
1996 1995
----- ----
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (61,900) (347,629)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation of plant and equipment 1,195,284 942,118
Amortization of other assets 31,007 29,207
Gain on disposal of property, plant
and equipment, net (62,409) (17,406)
Deferred income taxes - (33,743)
Changes in assets and liabilities (see below) (551,673) 642,289
---------- ----------
Net cash provided by operating activities 550,309 1,214,836
---------- ----------
Cash flows from investing activities:
Additions to property, plant and equipment (620,302) (1,569,975)
Proceeds from disposal of property, plant and equipment 116,541 118,038
---------- ----------
Net cash used in investing activities (503,761) (1,451,937)
---------- ----------
Cash flows from financing activities:
Proceeds from bank line of credit borrowing 2,700,000 2,950,000
Repayments on bank line of credit borrowing (1,900,000) (1,750,000)
Current installments and repayment of other long-term debt (6,278) (12,561)
---------- ----------
Net cash provided by financing activities 793,722 1,187,439
---------- ----------
Effect of exchange rate changes on cash and cash equivalents 10,055 2,410
---------- ----------
Net increase in cash and cash equivalents 850,325 952,748
Cash and cash equivalents at beginning of period 3,040,815 1,533,015
---------- ----------
Cash and cash Equivalents at end of period $3,891,140 2,485,763
========== ==========
Changes in assets and liabilities providing (using) cash:
Receivables $ 562,152 3,119,252
Services in progress (994,711) (808,555)
Income taxes receivable (8,904) (556,371)
Parts and supplies (33,879) (43,676)
Prepaid expenses (755,861) (804,116)
Accounts payable 1,446,136 70,570
Accrued expenses (211,345) (350,720)
Income taxes payable (544,135) (26,622)
Other assets (11,126) 42,527
---------- ----------
Total $ (551,673) 642,289
========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE> 6
C. H. HEIST CORP. AND SUBSIDIARIES
Notes to Condensed consolidated financial statements
(Unaudited)
1. In the opinion of Management, the accompanying condensed
consolidated financial statements contain all adjustments necessary
(consisting of normal recurring items) to present a fair statement of
consolidated financial position as of March 31, 1996, and the results
of operations and cash flows for the thirteen-week period ended March
31, 1996 and the fourteen-week period ended April 2, 1995. These
condensed consolidated financial statements should be read in
conjunction with the Company's Audited Consolidated Financial
Statements for 1995 and the notes thereto.
The Company's fiscal year ends on the last Sunday of December. For
fiscal 1995, the Company's operations included 53 weeks. Therefore,
the period ended April 2, 1995 includes fourteen weeks. The first
quarter of 1996 (a 52 week year) includes thirteen weeks.
2. The results of operations for the thirteen-week period ended March 31, 1996
and the fourteen-week period ended April 2, 1995 are not necessarily
indicative of the results to be expected for the full year.
3. The changes in stockholders' equity for the thirteen-week period ended March
31, 1996 are summarized as follows:
<TABLE>
<CAPTION>
Equity
adjustment Treasury stock
Additional from foreign -------------- Total
Common paid-in Retained currency stockholders'
stock capital earnings translation Shares Amount equity
----- ------- -------- ----------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1995 $ 158,260 4,253,689 24,293,966 (1,086,261) 292,419 $(1,251,903) 26,367,751
Net loss - - (61,900) - - - (61,900)
Foreign currency translation
adjustment - - - 42,498 - - 42,498
--------- --------- ---------- ---------- ------- ----------- ----------
Balance at March 31, 1996 $ 158,260 4,253,689 24,232,066 (1,043,763) 292,419 $(1,251,903) 26,348,349
========= ========= ========== ========== ======= =========== ==========
</TABLE>
4. During the quarter ended March 31,1996, no additional stock options were
issued and none have expired. As of March 31,1996 and December 31, 1995, the
Company had exercisable options outstanding to employees to purchase 189,700
common shares, at prices ranging from $6.94 to $11.14 per share.
6
<PAGE> 7
Independent Auditors' Review Report
The Board of Directors and Stockholders
C. H. Heist Corp.:
We have reviewed the condensed consolidated balance sheet of C. H. Heist Corp.
and subsidiaries as of March 31, 1996, and the related condensed consolidated
statements of operations and cash flows for the thirteen-week period ended
March 31,1996 and the fourteen-week period ended April 2, 1995. These condensed
consolidated financial statements are the responsibility of the Company's
management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data, and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the condensed consolidated financial statements referred to above
for them to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of C. H. Heist Corp. and subsidiaries
as of December 31, 1995, and the related consolidated statements of operations,
stockholders' equity and cash flows for the year then ended (not presented
herein); and in our report dated February 16, 1996, we expressed an unqualified
opinion on those consolidated financial statements. In our opinion, the
information set forth in the accompanying condensed consolidated balance sheet
as of December 31, 1995, is fairly presented, in all material respects, in
relation to the consolidated balance sheet from which it has been derived.
KPMG Peat Marwick LLP
Buffalo, New York
April 26, 1996
7
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
Sales increased by $1,225,000 or 5% during the current fiscal quarter
compared to the same fiscal quarter one year ago. Industrial maintenance
sales increased $1,215,000 or 9.0%. Sales increased in the Heist Field
Services Division by $1,986,000 and in equipment related services by
$315,000. The company was the successful bidder on a number of major plant
cleanup jobs which resulted in the increases mentioned above. Sales
declined in painting and insulation material sales and application by
$393,000 and $693,000 respectively. Painting declined because the
company did not have as much winter painting work as in the prior year.
Insulation declined primarily due to the loss of a maintenance contract
with one of the company's major customers. The increase in equipment
related sales more than offset the loss of this contract. Temporary
staffing sales increased by $10,000 during the current fiscal quarter.
January sales were down by $500,000 due in part to offices being closed
due to inclement weather and in part to an extra week in January 1995
caused by our 4-4-5 reporting system. The temporary staffing segment made
up for this decline in February and March and both sales and hours were
ahead of 1995 on a week to week basis at the end of the quarter.
Gross profit as a percent of sales increased from 11.4% to 12.7% and in
terms of dollars by $461,000 or 16.5%. This was due to a less than
proportional increase in cost of sales which increased $764,000 or 3.5%.
The improvement in operations at the Heist Field Services Division, the
increase in equipment related sales and continued margin mprovement in the
temporary staffing segment caused this increase. The gross profit
improvement would have been even greater had we not incurred losses on ship
painting work at the Company's Canadian subsidiary due to the extremely
cold weather.
Other income (expense) net, decreased during the current fiscal quarter
by $60,000 or 67%. This was due to a decrease in interest income of
$19,000; a decrease in interest expense of $31,000; and an increase in gain
on disposal of property, plant and equipment net of $45,000. Interest
income declined due to lower cash investments in the Canadian subsidiary.
Interest expense declined due to a negotiated reduction in the borrowing
rate and a lower level of borrowing. The company disposed of old surplus
equipment at a gain resulting in the gain on property, plant and equipment.
The effective tax rate remained the same for both fiscal periods. If
earnings projections do not change significantly, he Company expects the
effective tax rate for the year to approximate 40%.
FINANCIAL CONDITION
The quick ratio is 3.2 to 1 and the current ratio is 3.7 to 1 at both March 31,
1996 and December 31, 1995. Working apital increased by $1,407,000
during the current fiscal quarter. Open credit commitments as of March
31,1996 were $5,300,000, $2,300,000 for C. H. Heist Corp., and $3,000,000
for Ablest Service Corp. The Company also has $366,450 (the U.S. dollar
equivalent) available at the Royal Bank of Canada.
8
<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
CONTINUED
Cash and cash equivalents increased primarily due to net operating cash
flows and an increase in long term borrowing. Short and long term liquidity
remain solid.
Capital expenditures for the current fiscal quarter were $620,000. Of
this amount $ 419,000 was for industrial maintenance equipment and the
remainder was for computer equipment. Commitments as of March 31, 1996 were
$308,000 all of which was for industrial maintenance equipment.
9
<PAGE> 10
Part II-Other Information
Item 6 Exhibits and Reports on Form 8-K
(A) Reports on Form 8-K: No reports on Form 8-K have been filed during the
quarter ended March 31, 1996.
Exhibit 27.1 - Financial Data Schedule (for SEC use only)
10
<PAGE> 11
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.
C. H. Heist Corp.
(Registrant)
Date May 8, 1996 /s/ JOHN L. ROWLEY
------------------ ----------------------------------------
John L. Rowley
Vice President-Finance
(Chief Accounting and Financial Officer)
11
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-29-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<EXCHANGE-RATE> 1
<CASH> 3,891,140
<SECURITIES> 0
<RECEIVABLES> 13,721,564
<ALLOWANCES> 0
<INVENTORY> 2,205,049
<CURRENT-ASSETS> 23,595,245
<PP&E> 47,045,794
<DEPRECIATION> 30,015,939
<TOTAL-ASSETS> 41,003,350
<CURRENT-LIABILITIES> 6,450,936
<BONDS> 7,773,779
0
0
<COMMON> 158,260
<OTHER-SE> 26,190,089
<TOTAL-LIABILITY-AND-EQUITY> 41,003,350
<SALES> 25,769,004
<TOTAL-REVENUES> 25,769,004
<CGS> 22,508,737
<TOTAL-COSTS> 22,508,737
<OTHER-EXPENSES> 3,280,826
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 80,427
<INCOME-PRETAX> (100,986)
<INCOME-TAX> (39,086)
<INCOME-CONTINUING> (61,900)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (61,900)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
