UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1994
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-6314
PERINI CORPORATION
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-1717070
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
73 MT. WAYTE AVENUE, FRAMINGHAM, MASSACHUSETTS 01701-9160
(Address of principal executive offices)
(Zip code)
(508)-628-2000
(Registrant's telephone number, including area code)
NONE
(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
Number of shares of common stock of registrant outstanding at May 5, 1993:
4,363,143
PERINI CORPORATION & SUBSIDIARIES
INDEX
Page Number
-----------
Part I. - Financial Information:
<PAGE>
Item 1. Financial Statements
Consolidated Condensed Balance Sheets - 3
March 31, 1994 and December 31, 1993
Consolidated Condensed Statements of Income - 4
Three Months ended March 31, 1994 and 1993
Consolidated Condensed Statements of Cash 5-6
Flows - Three Months ended March 31, 1994
and 1993
Notes to Consolidated Condensed Financial 7-8
Statements
Item 2. Management's Discussion and Analysis of the 9-10
Consolidated Financial Condition and Results
of Operations
Part II. - Other Information:
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults Upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Security 11
Holders
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
PERINI CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
MARCH 31, 1994 AND DECEMBER 31, 1993
(In Thousands)
<TABLE>
ASSETS
------
MARCH 31, DEC. 31,
1994 1993
--------- --------
<S> <C> <C>
Cash $ 5,133 $ 35,871
Accounts and Notes Receivable 109,579 123,009
Unbilled Work 14,952 14,924
Construction Joint Ventures 61,697 61,156
Deferred Income Taxes 7,702 7,702
Other Current Assets 14,324 14,940
-------- --------
Total Current Assets $213,367 $257,602
-------- --------
Land Held for Sale or Development $ 47,736 $ 48,011
Investments in and Advances to Real Estate Joint
Ventures 142,357 138,095
Real Estate Properties Used in Operations 9,890 12,678
-------- --------
Total Real Estate Development Investments $199,983 $198,784
-------- --------
Other Assets $ 3,748 $ 3,896
-------- --------
Property and Equipment, less Accumulated Depreciation
of $29,274 - 1994 and $28,986 - 1993 $ 16,280 $ 16,096
-------- --------
$433,378 $476,378
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes Payable - Bank $ 4,000 $ -
Current Maturities of Long-Term Debt 5,194 7,617
Accounts Payable 110,843 136,231
Deferred Contract Revenue 27,092 25,867
Accrued Expenses 39,628 47,827
Accrued Income Taxes 435 3,183
-------- --------
Total Current Liabilities $187,192 $220,725
-------- --------
Deferred Income Taxes and Other Liabilities $ 35,246 $ 38,794
-------- --------
Long-Term Debt, including real estate development debt
of $7,696 - 1994 and $11,382 - 1993 $ 76,169 $ 82,366
-------- --------
Minority Interest $ 3,367 $ 3,350
-------- --------
Stockholders' Equity:
Preferred Stock $ 100 $ 100
Series A Junior Participating Preferred Stock - -
Common Stock 4,985 4,985
Paid-In Surplus 59,875 59,875
Retained Earnings 83,855 83,594
ESOT Related Obligations (6,982) (6,982)
--------- ---------
$141,833 $141,572
Less - Treasury Stock (10,429) (10,429)
--------- ---------
Total Stockholders' Equity $131,404 $131,143
--------- ---------
$433,378 $476,378
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
PERINI CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
(In Thousands, Except Per Share Data)
THREE MONTHS
ENDED MARCH 31,
-----------------------
1994 1993
-------- --------
REVENUES FROM OPERATIONS:
Construction $154,191 $244,487
Real Estate 20,200 13,556
--------- ---------
TOTAL REVENUES FROM OPERATIONS $174,391 $258,043
--------- ---------
COST AND EXPENSES:
Cost of Operations $161,615 $247,038
General, Administrative and Selling Expenses 9,810 9,027
--------- ---------
$171,425 $256,065
--------- ---------
INCOME FROM OPERATIONS $ 2,966 $ 1,978
--------- ---------
Other Income (Expense), Net (Note 2) (420) 5,055
Interest Expense (1,247) (1,188)
--------- ---------
Income Before Income Taxes $ 1,299 $ 5,845
Provision for Income Taxes (Note 3) 507 5,100
--------- ---------
NET INCOME $ 792 $ 745
========= =========
EARNINGS PER COMMON SHARE (Note 4) $ .06 $ .05
========= =========
DIVIDENDS PER COMMON SHARE (Note 5) $ - $ -
========= =========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (Note 4) 4,330,807 4,150,124
========= =========
The accompanying notes are an integral part of these financial statements.
PERINI CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1994 AND 1993
(In Thousands)
THREE MONTHS
ENDED MARCH 31,
--------------------
1994 1993
-------- --------
Cash Flows from Operating Activities:
Net Income $ 792 $ 745
Adjustments to reconcile net income to net cash
provided from operating activities:
Depreciation and amortization 663 656
Noncurrent deferred taxes and other liabilities (3,548) 14,495
Distributions greater (less) than earnings of joint 4,443 (2,719)
ventures
(Gain) on sale of subsidiary (Note 2) - (4,600)
Minority interest, net 17 (16)
Cash provided from (used by) changes in components of
Working capital other than cash, notes payable and
current maturities of long-term debt (24,597) (27,994)
Real estate development investments other than
joint ventures 6,749 1,761
Other non-cash items, net (1,028) (2,101)
--------- ---------
NET CASH USED BY OPERATING ACTIVITIES $(16,509) $(19,773)
--------- ---------
Cash Flows from Investing Activities:
Proceeds from sale of property and equipment $ 42 $ 153
Cash distributions of capital from unconsolidated
joint ventures 698 1,155
Acquisition of property and equipment (772) (2,106)
Improvements to land held for sale or development (130) (2,190)
Improvements to real estate properties used in
operations (24) -
Capital contributions to unconsolidated joint (6,333) (6,359)
ventures
Advances to real estate joint ventures (2,579) (2,830)
Proceeds from sale of Majestic net of subsidiary's
cash - 4,432
--------- ---------
NET CASH USED BY INVESTING ACTIVITIES $ (9,098) $ (7,745)
--------- ---------
Cash Flows from Financing Activities:
Proceeds of long-term debt $ 1,362 $ 507
Repayment of long-term debt (9,982) (3,015)
Cash dividends paid (531) (531)
Proceeds from notes payable to banks 4,000 -
--------- ---------
NET CASH USED BY FINANCING ACTIVITIES $ (5,151) $ (3,039)
--------- ---------
PERINI CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1994 AND 1993 (CONTINUED)
(In Thousands)
THREE MONTHS
ENDED MARCH 31,
--------------------
1994 1993
-------- --------
Net (Decrease) in cash $(30,758) $(30,557)
Cash at Beginning of Year 35,871 79,563
--------- ---------
Cash at End of Period $ 5,113 $ 49,006
========= =========
Supplemental Disclosures of Cash paid during the period
for:
Interest, net of amounts capitalized $ 1,563 $ 1,652
========= =========
Income tax payments (refunds) $ 2,626 $ 404
========= =========
PERINI CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(1) Significant Accounting Policies
The significant accounting policies followed by the Company and its
subsidiaries in preparing its consolidated financial statements are set
forth in Note (1) to such financial statements included in Form 10-K for
the year ended December 31, 1993. The Company has made no significant
change in these policies during 1994.
(2) Other Income (Expense) Net
Includes a pretax gain of $4.6 million in 1993 from the sale of Majestic
Contractors Limited, the Company's 74%-owned Canadian pipeline subsidiary.
This gain nets to zero after providing an equivalent amount for federal
income taxes at the 34% statutory rate and an additional 66% rate which
represents a combination of an additional tax provision for the difference
between book and tax basis of the Company's investment in this subsidiary
and a valuation reserve based upon the company's current estimate of its
utilization of the foreign tax credits related to the sale.
(3) Income Taxes
The higher-than-normal tax rate in 1993 is due to the reasons stated in
(2) above.
(4) Per Share Data
Computations of earnings per common share amounts are based on the
weighted average number of the Company's common shares outstanding during
the periods presented. Earnings per common share reflect the effect of
preferred dividends accrued during both the 1994 and 1993 three month
periods ended March 31, of $531,000. Common stock equivalents related to
additional shares of common stock issuable upon exercise of stock options
have not been included since their effect would be immaterial. Per share
data on a fully diluted basis is not presented because the effect of
conversion of the Company's depositary convertible exchangeable preferred
shares into common stock is antidilutive.
(5) Cash Dividends
There were no cash dividends on common stock declared or paid during the
periods presented in the condensed financial statements presented herein.
(6) Opinion
The unaudited condensed financial statements presented herein have been
prepared in accordance with the instructions to Form 10-Q and do not
include all of the information and note disclosures required by generally
accepted accounting principles. These statements should be read in
conjunction with the financial statements and notes thereto included in
the Company's Form 10-K for the year ended December 31, 1993. In the
opinion of management, the accompanying unaudited condensed financial
statements include all adjustments, consisting only of normal recurring
adjustments, necessary to present fairly the Company's financial
position as of March 31, 1994 and December 31, 1993 and results of
operations and cash flows for the three month periods ended March 31
for the three month period ended March 31, 1994 may not be indicative
of the results that may be expected for the year ending December 31,
1994 because the Company's results generally consist of a limited
number of large transactions in both construction and real estate.
Therefore, such results can vary depending on the timing of
transactions and the profitability of projects being reported.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
RESULTS OF OPERATIONS
Comparison of First Quarter of 1994
with the First Quarter of 1993
Revenues decreased $83.7 million (or 32.4%), from $258.1 million in 1993
to $174.4 million in 1994. This decrease resulted from decreased construction
revenues of $90.3 million (or 37%), from $244.5 million in 1993 to $154.2
million in 1994, due primarily to a decrease in revenues from building
operations of $105 million (or 53%), from $199 million in 1993 to $94 million
in 1994. This decrease in revenues was due to the timing in the start-up of
certain hotel/casino projects obtained late in 1993 compared to a few similar
projects that were well underway during the first quarter of 1993. This
decrease was partially offset by an increase in revenues from the heavy
construction operations of $14 million (or 30%), from $46 million in 1993 to
$60 million in 1994, due to a combination of the new Newberg/Perini Division
acquired in mid-1993 and an increased heavy backlog going into 1994. This
decrease was also partially offset by an increase in revenues from real estate
operations of $7 million, from $13 million in 1993 to $20 million in 1994,
caused primarily by the sale of two income properties in 1994.
The gross profit in 1994 increased by $1.8 million, from $11 million in
1993 to $12.8 million in 1994, due primarily to a $2.6 million increase from
construction operations, from $9.7 million in 1993 to $12.3 million in 1994.
This improvement from construction operations was due to the mix of work
performed, relatively more of the higher margin heavy construction work, from
19% of total construction volume in 1993 to 39% in 1994. This increase in
gross profit was partially offset by a decrease in gross profit from real
estate of $.8 million, from $1.3 million in 1993 to $.5 million in 1994, due
primarily to a decrease in high margin land sales in Florida.
The increase in general, administrative and selling expenses of $.8
million (or 9%), from $9 million in 1993 to $9.8 million in 1994, resulted
primarily from the addition of the Newberg/Perini Division in mid-1993.
The $5.4 million decrease in other income from income of $5 million in
1993 to a loss of $.4 million in 1994 was due primarily to the non-recurring
gain ($4.6 million) on the sale by the Company of its 74%-owned interest in
Majestic Contractors Limited ("Majestic"), its Canadian pipeline subsidiary,
in January, 1993.
The higher-than-normal tax rate in 1993 was due to tax provided at an
additional 66% rate on the gain on the sale of Majestic, which represented a
combination of an additional tax provision for the difference between book and
tax basis of the Company's investment in this subsidiary and a valuation
reserve related to the gain based upon the Company's estimate of its
utilization of the related foreign tax credits.
FINANCIAL CONDITION
Working capital decreased $10.7 million, from $36.9 million at the end of
1993 to $26.2 million at March 31, 1994. The current ratio decreased from
1.17:1 to 1.14:1.
During the first three months of 1994 the Company used $16.5 million of
cash from operations, primarily to fund a decrease in payables; $9.1 million
of cash for investing activities, primarily in joint ventures; and $5.2
million of cash for financial activities, primarily to pay down debt. The
source of cash was a $30.8 million reduction in cash on hand. The long-term
debt to equity ratio at March 31, 1994 was .58 to 1, compared to the .63 to 1
ratio at December 31, 1993.
Long-term debt at March 31, 1994 was $76.2 million, a decrease of $6.2
million from December 31, 1993. This decrease resulted primarily from the
repayment of certain mortgages related to estate properties sold during the
quarter.
In addition to internally generated funds, the Company has access to
additional funds under its $18 million of short-term lines of credit, its $70
million long-term Credit Agreement and, effective March 31, 1994, a $15
million collateralized short-term credit facility available for the balance of
1994. At March 31, 1994, there was $14 million available under the short-term
lines of credit, $.2 million available under the Credit Agreement and $15
million available under the new short-term credit facility. Management
believes that cash generated from operations, unused credit lines and various
real estate borrowings should probably be adequate to meet the Company's
funding requirements, although the withdrawal of many commercial lending
sources from both the real estate and construction markets has significantly
slowed the Company's real estate sales and/or put restrictions on new
borrowings and extensions on maturing loans by these very same sources cause
uncertainties in predicting liquidity.
Part II. - Other Information
Item 1. - Legal Proceedings - None
Item 2. - Changes in Securities
(a) None
(b) None
Item 3. - Defaults Upon Senior Securities - None
Item 4. - Submission of Matters to a Vote of Security Holders - None
Item 5. - Other Information - None
Item 6. - Exhibits and Reports on Form 8-K
(a) None
(b) None
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.
PERINI CORPORATION
Registrant
Date: May 9, 1994 /s/ James M. Markert
--------------------------------------------
James M. Markert, Senior Vice President
Finance and Administration
Date: May 9, 1994 /s/ Barry R. Blake
--------------------------------------------
Barry R. Blake, Vice President and Controller
