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, 1995
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 12,
1995: 4,719,425
PERINI CORPORATION & SUBSIDIARIES
INDEX
<PAGE>
Page
Number
Part I. - Financial Information:
Item 1. Financial Statements
Consolidated Condensed Balance Sheets - 3
March 31, 1995 and December 31, 1994
Consolidated Condensed Statements of 4
Income - Three Months ended March 31, 1995 and 1994
Consolidated Condensed Statements of Cash 5-6
Flows - Three Months ended March 31, 1995 and 1994
Notes to Consolidated Condensed Financial 7
Statements
Item 2. Management's Discussion and Analysis of the 8-9
Consolidated Financial Condition and Results
of Operations
Part II. - Other Information:
Item 1. Legal Proceedings 10
Item 2. Changes in Securities 10
Item 3. Defaults Upon Senior Securities 10
Item 4. Submission of Matters to a Vote of 10
Security Holders
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 10-11
Signatures 12
PERINI CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
MARCH 31, 1995 AND DECEMBER 31, 1994
(In Thousands)
ASSETS
MARCH 31, DEC. 31,
1995 1994
Cash $ 26,504 $ 7,841
Accounts and Notes Receivable 131,044 151,620
Unbilled Work 20,919 20,209
Construction Joint Ventures 72,195 66,346
Deferred Tax Asset 5,400 6,066
Other Current Assets 23,028 14,566
-------- --------
Total Current Assets $279,090 $266,648
-------- --------
Land Held for Sale or Development $ 38,607 $ 43,295
Investments in and Advances to Real Estate
Joint Ventures 149,177 148,843
Real Estate Properties Used in Operations 3,480 6,254
Other 432 80
-------- --------
Total Real Estate Development $191,696 $198,472
Investments -------- --------
Other Assets $ 3,757 $ 3,874
-------- --------
Property and Equipment, less Accumulated
Depreciation of $29,473 - 1995 and $29,082 - $ 12,768 $ 13,506
1994 -------- --------
$487,311 $482,500
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Maturities of Long-Term Debt $ 8,821 $ 5,022
Accounts Payable 146,332 140,454
Deferred Contract Revenue 41,278 38,929
Accrued Expenses 50,253 52,295
Accrued Income Taxes 1,900 -
-------- --------
Total Current Liabilities $248,584 $236,700
-------- --------
Deferred Income Taxes and Other Liabilities $ 28,529 $ 33,488
-------- --------
Long-Term Debt, including real estate
development debt of $4,333 - 1995 and $6,502 $ 74,332 $ 76,986
- 1994 -------- --------
Minority Interest $ 3,292 $ 3,297
-------- --------
Stockholders' Equity:
Preferred Stock $ 100 $ 100
Series A Junior Participating Preferred - -
Stock
Common Stock 4,985 4,985
Paid-In Surplus 58,869 59,001
Retained Earnings 82,113 81,772
ESOT Related Obligations (6,009) (6,009)
--------- ---------
$140,058 $139,849
Less - Treasury Stock (7,484) (7,820)
--------- ---------
Total Stockholders' Equity $132,574 $132,029
--------- ---------
$487,311 $482,500
======== =========
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,
1995 1994
REVENUES FROM OPERATIONS:
Construction $ 253,326 $ 154,191
Real Estate 9,763 20,200
TOTAL REVENUES FROM OPERATIONS ---------- ----------
$ 263,089 $ 174,391
---------- ----------
COST AND EXPENSES:
Cost of Operations $ 250,916 $ 161,615
General, Administrative and Selling 9,145 9,180
Expenses ---------- ----------
$ 260,061 $ 171,425
---------- ----------
INCOME FROM OPERATIONS $ 3,028 $ 2,966
---------- ----------
Other Income (Expense), Net
Interest Expense $ 348 $ (420)
(2,119) (1,247)
---------- ----------
Income Before Income Taxes $ 1,257 $ 1,299
Provision for Income Taxes (Note 2) 385 507
---------- ----------
NET INCOME $ 872 $ 792
========== ==========
EARNINGS PER COMMON SHARE (Note 3) $ .08 $ .06
========== ==========
DIVIDENDS PER COMMON SHARE (Note 4) $ - $ -
========== ==========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 4,510,329 4,330,807
(Note 3) ========== ==========
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, 1995 AND 1994
(In Thousands)
THREE MONTHS
ENDED MARCH 31,
1995 1994
Cash Flows from Operating Activities:
Net Income $ 872 $ 792
Adjustments to reconcile net income to net
cash provided from operating activities:
Depreciation and amortization 686 663
Noncurrent deferred taxes and other (4,959) (3,548)
liabilities
Distributions greater (less) than
earnings of joint ventures and (3,612) 4,443
affiliates
Cash provided from (used by) changes in
components of
Working capital other than cash, notes
payable and current maturities of 27,874 (28,428)
long-term debt
Real estate development investments
other than joint ventures and 365 6,749
properties used in operations
Other non-cash items, net 79 (1,011)
--------- ---------
NET CASH PROVIDED FROM (USED BY)
OPERATING ACTIVITIES $ 21,305 $(20,340)
--------- ---------
Cash Flows from Investing Activities:
Proceeds from sale of property and $ 1,925 $ 42
equipment
Cash distributions of capital from
unconsolidated joint ventures 1,010 698
Acquisition of property and equipment (216) (772)
Improvements to land held for sale or (27) (130)
development
Improvements to and acquisition of real
estate properties used in operations (32) (24)
Capital contributions to unconsolidated (3,946) (6,333)
joint ventures
Advances to real estate joint ventures, (2,275) (2,579)
net
Investment in other activities 102 -
--------- ---------
NET CASH USED BY INVESTING ACTIVITIES $ (3,459) $ (9,098)
--------- ---------
Cash Flows from Financing Activities:
Proceeds of long-term debt $ 3,409 $ 1,362
Repayment of long-term debt (2,264) (9,982)
Cash dividends paid (531) (531)
Proceeds from notes payable to banks - 4,000
Treasury stock issued 203 -
--------- ---------
<PAGE>
NET CASH PROVIDED FROM (USED BY)
FINANCING ACTIVITIES $ 817 $ (5,151)
--------- ---------
PERINI CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994 (CONTINUED)
(In Thousands)
THREE MONTHS
ENDED MARCH 31,
1995 1994
Net Increase (Decrease) in cash $ 18,663 $(34,589)
Cash at Beginning of Year 7,841 35,871
--------- ---------
Cash at End of Period $ 26,504 $ 1,282
========= =========
Supplemental Disclosures of Cash paid
during the period for:
Interest, net of amounts capitalized $ 2,179 $ 1,563
========= =========
Income tax payments $ 1,175 $ 2,626
========= =========
The accompanying notes are an integral part of these financial statements.
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, 1994. The Company has made no
significant change in these policies during 1995.
(2) Income Taxes
The lower-than-normal tax rate in 1995 is due to a tax benefit
realized.
(3) 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 1995 and 1994
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 antidilutive. 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 also
antidilutive.
(4) Cash Dividends
There were no cash dividends on common stock declared or paid during
the periods presented in the condensed financial statements presented
herein.
(5) 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, 1994. 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, 1995 and December 31, 1994 and results of
operations and cash flows for the three month periods ended March 31,
1995 and 1994. The results of operations for the three month period
ended March 31, 1995 may not be indicative of the results that may be
expected for the year ending December 31, 1995 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 the First Quarter of 1995
with the First Quarter of 1994
Revenues increased $88.7 million (or 50.9%), from $174.4 million in
1994 to $263.1 million in 1995. This increase resulted from increased
construction revenues of $99.1 million (or 64%), from $154.2 million in
1994 to $253.3 million in 1995, due primarily to an increase in revenues
from building operations of $96 million (or 102%), from $94 million in
1994 to $190 million in 1995. This increase in revenues was due primarily
to the timing in the start-up of certain hotel/casino projects. This
increase was partially offset by a decrease in revenues from real estate
operations of $10.4 million (or 51%), from $20.2 million in 1994 to $9.8
million in 1995 due to the sale in 1994 of two investment properties ($9.6
million).
In spite of the increase in revenues, the total gross profit decreased
slightly, from $12.8 million in 1994 to $12.2 million in 1995 due to an
overall decrease in gross profit from construction operations of $2
million (or 16%), from $12.2 million in 1994 to $10.2 million in 1995
which was primarily caused by a further writedown on an overseas project
that has been adversely affected by locally unstable economic and
political conditions and other factors, as well as less profit from heavy
construction operations due to lower margins than anticipated on certain
contracts being performed in the Metropolitan New York area. These gross
profit decreases were partially offset by increased profits from building
operations due to the increased volume referred to above and increased
profits from real estate operations due primarily to improved operating
results from the company's two major real estate properties, Rincon Center
and the Resort at Squaw Creek.
The decrease in general, administrative and selling expenses of $.7
million (or 7%), from $9.8 million in 1994 to $9.1 million in 1995,
resulted primarily from the ongoing cost reduction program resulting from
re-engineering certain of the business units and the continuation of the
gradual down-sizing of the real estate operations.
The $.8 million increase in other income from a loss of $.4 million in
1994 to income of $.4 million in 1995 was due primarily to the gain on
sale of a certain land, including a quarry, in 1995 ($.4 million) and an
increase in interest income of $.2 million.
The lower-than-normal tax rate in 1995 is due to a tax benefit
realized that related to the sale of the land and quarry referred to
above.
FINANCIAL CONDITION
Working capital increased $.6 million, from $29.9 million at the end
of 1994 to $30.5 million at March 31, 1995. The current ratio decreased
slightly from 1.13:1 to 1.12:1 during this same period.
During the first three months of 1994 the Company's cash on hand
increased by $18.7 million, primarily resulting from the $21.3 million
generated from operations due to a decrease in accounts receivables and
$.8 million from financing activities, primarily from net borrowings.
These increases were partially offset by the $3.4 million of cash required
for investments in or advance to joint ventures.
Long-term debt at March 31, 1995 was $74.3 million, a decrease of $2.7
million from December 31, 1994. The long-term debt to equity ratio at
March 31, 1995 improved to .56 to 1, compared to the .58 to 1 ratio at
December 31, 1994.
In addition to internally generated funds, the Company has access to
additional funds under its $5 million short-term line of credit, its $116
million long-term Credit Agreement which was reduced from approximately
$125 million at December 31, 1994 in accordance with the terms of the
Agreement due to the impact of the net proceeds of a certain claim
received during April, 1995. At March 31, 1995, there was $5 million
available under the short-term line of credit, $54 million available under
the Credit Agreement, as adjusted. Management believes that cash
generated from operations, unused credit lines and various real estate
borrowings should probably be adequate for the next twelve months to meet
the Company's funding requirements. However, the withdrawal of many
commercial lending sources from both the real estate and construction
markets and/or restrictions on new borrowings and extensions on maturing
loans by these same sources cause uncertainties in predicting liquidity.
The full amount available under the Credit Agreement, as adjusted, may
be borrowed during any fiscal quarter. However, financial covenants
limiting the debt to equity ratio contained in the agreements governing
these facilities limit the amount of borrowings which may be outstanding
at the end of any fiscal quarter. Based on these covenants, $7.7 million
of additional borrowing capacity was available under the Credit Agreement
at March 31, 1995.
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
(c) Financial Data Schedule - Exhibit 27
EXHIBIT 27
FINANCIAL DATA SCHEDULE
This schedule contains summary financial information extracted from
the Consolidated Balance Sheets as of March 31, 1995 and the Consolidated
Statements of Operations for the twelve months ended December 31, 1994 and
is qualified in its entirety by reference to such financial statements.
Multiplier 1,000
Period Type 3 Months
Fiscal Year End December 31, 1994
Period End March 31, 1995
Cash 26,504
Securities 0
Receivables 131,044
Allowances 0
Inventory 17,557
Current Assets 279,090 (F1)
PP&E 42,241
Depreciation (29,473)
Total Assets 487,311 (F2)
Current Liabilities 248,584
Bonds 74,332
Common 4,985
Preferred Mandatory 100
Preferred 0
Other SE 0
Total Liability and Equity 487,311 (F3)
Sales 0
Total Revenues 263,089
CGS 0
Total Costs (260,061)
Other Expenses 348
Loss Provision 0
Interest Expense (2,119)
Income Pretax 1,257 (F4)
Income Tax (385)
Income Continuing 872
Discontinued 0
Extraordinary 0
Changes 0
Net Income 872
EPS Primary .08
EPS Diluted 0
(F1) Includes Equity in Construction Joint Ventures of $72,195,
Unbilled Work of $20,919, and Other Short-Term Assets of $10,871,
not currently reflected in this tag list.
(F2) Includes investments in and advances to Real Estate Joint Ventures
of $149,177, Land Held for Sale or Development of $38,607, and
Other Long-Term Assets of $7,669 not currently reflected in this
tag list.
(F3) Includes Deferred Income Taxes and Other Liabilities of $28,529,
Minority Interest of $3,292, Paid-In Surplus of $58,869, Retained
Earnings of $82,113, ESOT Related Obligations of $(6,009), and
Treasury Stock of $(7,484).
(F4) Includes General, Administrative and Selling Expenses of $(9,145),
not currently reflected on this tag list.
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 15, 1995 /s/ John H. Schwarz
--------------------------------------
<PAGE>
John H. Schwarz,
Executive Vice President,
Finance and Administration
Date: May 15, 1995 /s/ Barry R. Blake
---------------------------------------
Barry R. Blake,
Vice President and Controller
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Balance Sheets as of March 31, 1995 and the Consolidated Statements
of Operations for the twelve months ended December 31, 1994 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> DEC-31-1994
<PERIOD-END> MAR-31-1995
<CASH> 26,504
<SECURITIES> 0
<RECEIVABLES> 131,044
<ALLOWANCES> 0
<INVENTORY> 17,557
<CURRENT-ASSETS> 279,090<F1>
<PP&E> 42,241
<DEPRECIATION> (29,473)
<TOTAL-ASSETS> 487,311<F2>
<CURRENT-LIABILITIES> 248,584
<BONDS> 74,332
<COMMON> 4,985
100
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 487,311<F3>
<SALES> 0
<TOTAL-REVENUES> 263,089
<CGS> 0
<TOTAL-COSTS> (260,061)<F4>
<OTHER-EXPENSES> 348
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (2,119)
<INCOME-PRETAX> 1,257
<INCOME-TAX> (385)
<INCOME-CONTINUING> 872
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 872
<EPS-PRIMARY> .08
<EPS-DILUTED> 0
<FN>
<F1>Includes Equity in Construction Joint Ventures of $72,195, Unbilled Work of
$20,919, and Other Short-Term Assets of $10,871, not currently reflected in
this tag list.
<F2>Includes investment in and advances to Real Estate Joint Ventures of
$149,177, Land Held for Sale or Development of $38,607, and Other Long-Term
Assets of $7,669 not currently reflected in this tag list.
<F3>Includes Deferred Income Taxes and Other Liabilities of $28,529, Minority
Interest of $3,292, Paid-In Surplus of $58,869, Retained Earnings of $82,113,
ESOT Related Obligations of $(6,009), and Treasury Stock of $(7,484).
<F4>Includes General, Administrative and Selling Expenses of $(9,145), not
currently reflected on this tag list.
</FN>
</TABLE>
