<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report on
FORM 10-Q
(Mark one)
( X ) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended December 31, 1993
-----------------
( ) 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 1-7463
JACOBS ENGINEERING GROUP INC.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 95-4081636
- --------------------------------------------------------------------------------
(State of incorporation) (I.R.S. employer identification number)
251 South Lake Avenue, Pasadena, California 91101
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
(818) 449 - 2171
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
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:
( X ) YES - ( ) NO
Number of shares of common stock outstanding at February 10, 1994: 24,829,463
Page 1
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JACOBS ENGINEERING GROUP INC.
INDEX TO FORM 10-Q
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Part I - Financial Information
Item 1. Financial Statements:
Consolidated Condensed Balance
Sheets as of December 31, 1993
and September 30, 1993 3
Consolidated Condensed Statements
of Income for the Three Months
Ended December 31, 1993 and 1992 4
Consolidated Condensed Statements of
Cash Flows for the Three Months
Ended December 31, 1993 and 1992 5
Notes to Consolidated Condensed
Financial Statements 6-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8-9
Part II - Other Information 10
Signatures 10
</TABLE>
Page 2
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
December 31, September 30,
1993 1993
-------------- -------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 12,719,300 $ 20,515,000
Marketable securities 3,020,200 20,061,900
Receivables 212,151,100 201,438,800
Deferred income taxes 20,241,900 19,391,900
Prepaid expenses and other 3,932,900 3,541,200
- ---------------------------------------- ------------ ------------
Total current assets 252,065,400 264,948,800
- ---------------------------------------- ------------ ------------
Property, Equipment and
Improvements, Net 53,418,800 43,516,400
- ---------------------------------------- ------------ ------------
Other Assets, Net 45,432,000 42,554,900
- ---------------------------------------- ------------ ------------
$350,916,200 $351,020,100
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable to banks $ 17,012,100 $ 6,206,800
Accounts payable 26,124,900 42,918,500
Accrued liabilities 74,957,400 81,908,000
Customers' advances in excess
of related revenues 25,565,900 22,364,700
Income taxes payable 13,528,300 10,862,400
- ---------------------------------------- ------------ ------------
Total current liabilities 157,188,600 164,260,400
- ---------------------------------------- ------------ ------------
Deferred Gains on Real Estate
Transactions 3,389,600 3,631,100
- ---------------------------------------- ------------ ------------
Other Deferred Liabilities 9,410,400 9,332,000
- ---------------------------------------- ------------ ------------
Commitments and Contingencies
- ----------------------------------------
Stockholders' Equity:
Capital stock:
Preferred stock, $1 par value,
authorized - 1,000,000 shares,
issued and outstanding - none - -
Common stock, $1 par value,
authorized - 60,000,000 shares,
issued and outstanding -
24,791,707 and 24,757,318 shares,
respectively 24,791,700 24,757,300
Additional paid-in capital 31,231,500 30,436,000
Retained earnings 125,104,100 118,555,400
Cumulative foreign currency
translation adjustment (199,700) 47,900
- ---------------------------------------- ------------ ------------
Total stockholders' equity 180,927,600 173,796,600
- ---------------------------------------- ------------ ------------
$350,916,200 $351,020,100
============ ============
See the accompanying notes.
</TABLE>
Page 3
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JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED DECEMBER 31, 1993 AND 1992
(UNAUDITED)
<TABLE>
<CAPTION>
1993 1992
-------------- --------------
<S> <C> <C>
Revenues $260,609,900 $298,612,000
- ----------------------------- ------------ ------------
Costs and Expenses:
Direct costs of contracts 226,424,800 264,580,200
Selling, general and
administrative expenses 22,507,700 23,112,800
Interest income, net (190,700) (358,400)
Other income, net (470,900) (674,700)
- ----------------------------- ------------ ------------
248,270,900 286,659,900
------------ ------------
Income before taxes 12,339,000 11,952,100
- ----------------------------- ------------ ------------
Provision for Income Taxes 5,059,000 5,035,100
- ----------------------------- ------------ ------------
Net Income $ 7,280,000 $ 6,917,000
============================= ============ ============
Net Income Per Share $.29 $.28
============================= ============ ============
</TABLE>
See the accompanying notes.
Page 4
<PAGE>
JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED DECEMBER 31, 1993 AND 1992
(UNAUDITED)
<TABLE>
<CAPTION>
1993 1992
------------- -------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 7,280,000 $ 6,917,000
Adjustments to reconcile net income
to net cash flows from operations:
Depreciation and amortization 2,096,700 1,905,300
Amortization of deferred gains (241,600) (241,600)
Gains on sales of investments (682,200) (878,900)
Change in assets and liabilities,
excluding the effects of
businesses acquired:
Receivables (10,899,000) 16,305,000
Prepaid expenses and other (402,700) (745,600)
Accounts payable (16,633,400) (17,297,200)
Accrued liabilities (7,208,800) (9,819,700)
Customers' advances 3,225,300 5,771,200
Income taxes payable 2,679,800 4,559,300
Deferred income taxes (771,600) (965,600)
- ------------------------------------------ ------------ ------------
Net cash provided (used) (21,557,500) 5,509,200
- ------------------------------------------ ------------ ------------
Cash Flows from Investing Activities:
Additions to property and
equipment, net of disposals (12,379,600) (1,610,200)
Changes in other assets, net (2,559,700) (348,100)
Proceeds from sales of marketable
securities 17,598,100 -
Deposit towards acquisition of business - (6,500,000)
Purchases of marketable securities - (169,400)
Proceeds from sales of investments - 1,401,700
Purchases of investments (67,800) (597,000)
- ------------------------------------------ ------------ ------------
Net cash provided (used) 2,591,000 (7,823,000)
- ------------------------------------------ ------------ ------------
Cash Flows from Financing Activities:
Exercise of stock options 460,200 1,011,200
Bank borrowings, net of repayments 10,805,300 1,955,100
- ------------------------------------------ ------------ ------------
Net cash provided 11,265,500 2,966,300
- ------------------------------------------ ------------ ------------
Effect of Exchange Rate Changes (94,700) (321,900)
- ------------------------------------------ ------------ ------------
Increase (Decrease) in Cash and
Cash Equivalents (7,795,700) 330,600
Cash and Cash Equivalents at
Beginning of Period 20,515,000 23,911,300
- ------------------------------------------ ------------ ------------
Cash and Cash Equivalents at
End of Period $ 12,719,300 $ 24,241,900
========================================== ============ ============
</TABLE>
See the accompanying notes.
Page 5
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JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 1993
1. The accompanying consolidated condensed financial statements and financial
information included herein have been prepared by the Company, without
audit, pursuant to the interim period reporting requirements of Form 10-Q.
Consequently, certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted.
Accordingly, readers of this report should refer to the consolidated
financial statements and the notes thereto incorporated into the Company's
latest Annual Report on Form 10-K.
In the opinion of the Company, the accompanying unaudited consolidated
condensed financial statements present fairly its consolidated financial
position at December 31, 1993 and September 30, 1993, and its consolidated
results of operations and cash flows for the three months ended December
31, 1993 and 1992.
The Company's interim results of operations are not necessarily indicative
of the results to be expected for the full year.
2. Effective October 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109 - "Accounting for Income Taxes". Financial
statements for prior periods were not restated and the cumulative effect of
this change in accounting principle was not material. The effects of SFAS
No. 109 on the Company's consolidated results of operations for the three
months ended December 31, 1993 were also not material.
3. Included in receivables at December 31, 1993 and September 30, 1993 were
unbilled amounts totalling $48,797,800 and $38,445,500, respectively.
4. Property, equipment and improvements are carried at cost and consisted of
the following at December 31, 1993 and September 30, 1993:
<TABLE>
<CAPTION>
December 31, September 30,
1993 1993
------------ -------------
<S> <C> <C>
Land $ 6,184,600 $ 5,484,600
Buildings 25,055,300 15,520,000
Equipment 62,188,300 60,861,400
Leasehold improvements 11,621,200 11,462,300
- -------------------------------------- ------------ -----------
105,049,400 93,328,300
Less - accumulated depreciation
and amortization 51,630,600 49,811,900
- -------------------------------------- ------------ -----------
$ 53,418,800 $43,516,400
============ ===========
</TABLE>
Page 6
<PAGE>
JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 1993
5. Other assets consisted of the following at December 31, 1993 and September
30, 1993:
<TABLE>
<CAPTION>
December 31, September 30,
1993 1993
------------ -------------
<S> <C> <C>
Goodwill $17,624,700 $17,266,700
Prepaid pension costs 10,710,000 10,864,000
Cash surrender value of life
insurance policies 11,296,700 8,846,000
Investments 3,497,800 3,304,100
Miscellaneous 4,717,800 4,609,900
- -------------------------------------- ----------- -----------
47,847,000 44,890,700
Less - accumulated amortization
of goodwill 2,415,000 2,335,800
- -------------------------------------- ----------- -----------
$45,432,000 $42,554,900
=========== ===========
</TABLE>
6. During the three months ended December 31, 1993 and 1992, the Company made
cash payments of approximately $2,704,800 and $898,000, respectively, for
income taxes, and approximately $152,000 and $48,000, respectively, for
interest.
7. Net income per share for the three months ended December 31, 1993 and 1992
has been computed based upon the weighted average number of shares of
common stock and, if dilutive, common stock equivalents outstanding as
follows:
<TABLE>
<CAPTION>
1993 1992
---------- ----------
<S> <C> <C>
Average number of
shares of common
stock outstanding 24,773,900 24,450,800
Average number of
shares of common
stock equivalents
outstanding 325,800 521,300
- --------------------------- ---------- ----------
25,099,700 24,972,100
========== ==========
</TABLE>
Page 7
<PAGE>
JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
DECEMBER 31, 1993
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The following discussion should be read in conjunction with management's
discussion and analysis of financial condition and results of operations
incorporated by reference into the Company's latest Annual Report on Form 10-K.
Results of Operations
- ---------------------
Revenues for the three months ended December 31, 1993 (the "first quarter of
fiscal 1994") were $260.6 million; $38.0 million less than the amount for the
three months ended December 31, 1992 (the "first quarter of fiscal 1993"). The
decrease was attributable primarily to the Company's construction services where
activities on several large construction projects were winding-down through much
of fiscal 1993. With respect to engineering services, the Company billed 2.1
million professional services hours to projects during the first quarter of
fiscal 1994; 0.2 million more hours than the number billed during the first
quarter of fiscal 1993.
As a percent of revenues, direct costs of contracts were 86.9% for the first
quarter of 1994, as compared to 88.6% for the first quarter of 1993. The
percentage relationship between direct costs of contracts and revenues will
fluctuate between reporting periods depending on a variety of factors including
the mix of business during the reporting periods being compared. Historically,
engineering services provide for higher margins than either construction or
maintenance services. In general, the improvement in this percentage
relationship in the first quarter of fiscal 1994 as compared to the first
quarter of fiscal 1993 was due to an increasing portion of the Company's total
business volume coming from engineering services relative to construction and
maintenance.
Selling, general and administrative ("S,G & A") expenses were $22.5 million for
the first quarter of fiscal 1994; $0.6 million less than the amount for the
corresponding period last year. The decrease in S,G & A expenses reflects the
results of integrating the operations of the recently acquired businesses into
Jacobs as well as other efficiencies. The decrease also reflects the results of
efforts to reduce overheads to a level commensurate with the Company's overall
business volume.
The Company's operating profit (defined as income before taxes, other income or
expense, net and interest income, net) for the first quarter of 1994 was $11.7
million; $.8 million more than the operating profit for the first quarter of
1993. The increase was due primarily to the increase in engineering services
and the reduction in S,G & A expenses discussed above.
Interest income, net was $0.2 million for the first quarter of fiscal 1994; $0.2
million less than the amount for the corresponding period last year. The
decrease was due primarily to borrowings by the Company's recently-acquired U.K.
subsidiary, combined with lower levels of cash invested in interest-bearing
accounts.
Other income, net was $0.5 million for the first quarter of fiscal 1994; $0.2
million less than the amount for the corresponding period last year. The
decrease was due primarily to a reduction in gains from sales of marketable
securities.
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JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
DECEMBER 31, 1993
Backlog Information
- -------------------
The following table summarizes the Company's backlog information at the dates
indicated (in millions):
<TABLE>
<CAPTION>
December 31, December 31,
1993 1992
------------ ------------
<S> <C> <C>
Engineering services $ 736.0 $ 717.0
Total 1,893.0 1,795.0
</TABLE>
Liquidity and Capital Resources
- -------------------------------
The Company's cash and cash equivalents decreased $7.8 million during the first
quarter of 1994. This compares to a net increase of $0.3 million during the
first quarter of 1993. The current year decrease in cash and cash equivalents
was due primarily to cash used in operations ($21.6 million), offset in part by
cash provided from investing activities ($2.6 million) and financing activities
($11.3 million).
Operations used $21.6 million of cash and cash equivalents in the first quarter
of fiscal 1994. This compares to a net contribution of cash of $5.5 million in
the first quarter of fiscal 1993. The decrease in cash provided by operations
in the current fiscal quarter as compared to last year was due primarily to a
$27.2 million increase in the amount of receivables outstanding.
The Company's investing activities provided $2.6 million of cash and cash
equivalents during the first quarter of fiscal 1994. This compares to net uses
of cash of $7.8 million during the first quarter of fiscal 1993. Additions to
property and equipment was $10.8 million higher in the current quarter as
compared to last year, and was due primarily to the acquisition of an office
building in Baton Rouge, Louisiana. The cash purchase price of the building was
$10.5 million; the Company was previously the principal lessee in the building.
Additions to other, long-term assets were $2.2 million higher in the current
quarter as compared to last year, and was due primarily to increases in the cash
surrender value of company-owned life insurance policies. These uses were
offset in part by $16.7 million of cash generated by the sales of marketable
securities and investments, net of purchases. Also contributing to the
improvement in cash provided by investing activities in the current fiscal
quarter as compared to last year was $6.5 million used last year as a deposit
towards the acquisition of a business; no similar transaction occurred in the
current fiscal quarter.
Cash flows from financing activities contributed $11.3 million in cash and cash
equivalents during the first quarter of fiscal 1994, compared to $3.0 million
during the first quarter of fiscal 1993. The variance was due primarily to
increased short-term bank borrowings, offset in part by a slight reduction in
cash provided by the exercise of stock options.
The Company believes it has adequate capital resources to fund its operations
for the remainder of 1994 and beyond. At December 31, 1993, the Company's
credit facilities totalled $43.5 million through banks in the U.S. and the U.K.,
against which $17.0 million was outstanding at December 31, 1993.
Page 9
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PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
27. Financial Data Schedule - being filed herewith.
(b) Reports on Form 8-K - not applicable.
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.
JACOBS ENGINEERING GROUP INC.
s/n John W. Prosser, Jr.
___________________________
John W. Prosser, Jr.
Senior Vice President, Finance
and Administration and Treasurer
Date: February 10, 1994
Page 10
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EXHIBIT 27.
JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
FINANCIAL DATA SCHEDULE
This Schedule contains summary financial information extracted from the
Consolidated Condensed Balance Sheet as of December 31, 1993 and the
Consolidated Condensed Statement of Income for the three months ended December
31, 1993 and is qualified in its entirety by reference to such financial
statements.
<TABLE>
<CAPTION>
Item Number Item Description Amount
- ------------------ ----------------------------------- -------------
<S> <C> <C>
5-02(1) Cash and cash items $ 12,719,300
5-02(2) Marketable securities 3,020,200
5-02(3)(a)(1) Notes and accounts receivable 212,151,100
5-02(4) Allowance for doubtful accounts N/A
5-02(6) Inventory N/A
5-02(9) Total current assets 252,065,400
5-02(13) Property, plant and equipment 105,049,400
5-02(14) Accumulated depreciation 51,630,600
5-02(18) Total assets 350,916,200
5-02(21) Total current liabilities 157,188,600
5-02(22) Bonds, mortgages and similar debt N/A
5-02(28) Preferred stock-mandatory
redemption N/A
5-02(29) Preferred stock-no mandatory
redemption N/A
5-02(30) Common stock 24,791,700
5-02(31) Other stockholders' equity 156,135,900
5-02(32) Total liabilities and stockholders'
equity 350,916,200
5-03(b)1(a) Net sales of tangible products N/A
5-03(b)1 Total revenues 260,609,900
5-03(b)2(a) Cost of tangible goods sold N/A
5-03(b)2 Total costs and expenses applicable
to sales and revenues 226,424,800
5-03(b)3 Other costs and expenses N/A
5-03(b)5 Provision for doubtful accounts
and notes N/A
5-03(b)8 Interest and amortization of debt
discount (190,700)
5-03(b)(10) Income before taxes and other items 12,339,000
5-03(b)(11) Income tax expense 5,059,000
5-03(b)(14) Income/loss continuing operations 7,280,000
5-03(b)(15) Discontinued operations N/A
5-03(b)(17) Extraordinary items N/A
5-03(b)(18) Cumulative effect-change in
accounting principles N/A
5-03(b)(19) Net income or loss 7,280,000
5-03(b)(20) Earnings per share-primary 0.29
5-03(b)(20) Earnings per share-fully diluted 0.29
</TABLE>
N/A - The item either does not apply, or the amount is not material.
Page 11
