Perini Corporation
73 Mt. Wayte Avenue
Framingham, MA 01701
August 14, 1995
United States Securities and Exchange Commission
OFICS Filer Support
SEC Operations Center
6432 General Greenway
Alexandria, VA 22312-2413
Re: Perini Corporation Form 10-Q
S.E.C. File Number 1-6314
Gentlemen:
Pursuant to the requirements of the Securities Exchange Act of
1934, we are transmitting herewith Perini Corporation Form 10-Q.
Very truly yours,
s/Barry R. Blake
----------------------
Barry R. Blake
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 June 30, 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 August 9,
1995: 4,718,873
PERINI CORPORATION & SUBSIDIARIES
INDEX
Page
Number
Part I. - Financial Information:
Item 1. Financial Statements
Consolidated Condensed Balance Sheets - 3
June 30, 1995 and December 31, 1994
Consolidated Condensed Statements of 4
Operations - Three Months and Six Months
ended June 30, 1995 and 1994
Consolidated Condensed Statements of Cash 5 - 6
Flows - Six Months ended June 30, 1995
and 1994
Notes to Consolidated Condensed Financial 7
Statements
Item 2. Management's Discussion and Analysis of the 8 - 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
<TABLE>
PERINI CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
JUNE 30, 1995 AND DECEMBER 31, 1994
(In Thousands)
ASSETS
JUNE 30, DEC. 31,
1995 1994
--------- ---------
<S> <C> <C>
Cash $ 33,012 $ 7,841
Accounts and Notes Receivable 159,640 151,620
Unbilled Work 24,306 20,209
Construction Joint Ventures 61,986 66,346
Deferred Tax Asset 3,354 6,066
Other Current Assets 25,093 14,566
-------- --------
Total Current Assets $307,391 $266,648
-------- --------
Land Held for Sale or Development $ 38,527 $ 43,295
Investments in and Advances to Real Estate Joint
Ventures 146,051 148,843
Real Estate Properties Used in Operations 3,671 6,254
Other 382 80
-------- --------
Total Real Estate Development Investments $188,631 $198,472
-------- --------
Other Assets $ 3,667 $ 3,874
-------- --------
Property and Equipment, less Accumulated Depreciation
of $28,665 - 1995 and $29,082 - 1994 $ 12,660 $ 13,506
-------- --------
$512,349 $482,500
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Maturities of Long-Term Debt $ 8,505 $ 5,022
Accounts Payable 168,013 140,454
Deferred Contract Revenue 36,095 38,929
Accrued Expenses 61,442 52,295
Accrued Income Taxes 1,189 -
-------- --------
Total Current Liabilities $275,244 $236,700
-------- --------
Deferred Income Taxes and Other Liabilities $ 24,801 $ 33,488
-------- --------
Long-Term Debt, including real estate development debt
of $4,270 - 1995 and $6,502 - 1994 $ 74,270 $ 76,986
-------- --------
Minority Interest $ 3,066 $ 3,297
-------- --------
Stockholders' Equity:
Preferred Stock $ 100 $ 100
Series A Junior Participating Preferred Stock - -
Common Stock 4,985 4,985
Paid-In Surplus 57,668 59,001
Retained Earnings 82,468 81,772
ESOT Related Obligations (6,009) (6,009)
-------- --------
$139,212 $139,849
Less - Treasury Stock (4,244) (7,820)
-------- --------
Total Stockholders' Equity $134,968 $132,029
-------- --------
$512,349 $482,500
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
PERINI CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
(In Thousands, Except Per Share Data)
<TABLE>
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
RESULTS FROM OPERATIONS: 1995 1994 1995 1994
---------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
Construction $ 293,701 $ 227,759 $ 547,027 $ 381,950
Real Estate 13,260 15,346 23,023 35,546
---------- ---------- ---------- ----------
TOTAL REVENUES FROM OPERATIONS $ 306,961 $ 243,105 $ 570,050 $ 417,496
---------- ---------- ---------- ----------
COST AND EXPENSES:
Cost of Operations $ 294,543 $ 235,648 $ 545,459 $ 397,263
General, Administrative and Selling Expenses 9,013 10,399 18,158 20,209
---------- ---------- ---------- ----------
$ 303,556 $ 246,047 $ 563,617 $ 417,472
---------- ---------- ---------- ----------
INCOME (LOSS) FROM OPERATIONS $ 3,405 $ (2,942) $ 6,433 $ 24
---------- ---------- ---------- ----------
Other Income (Expense), Net $ (112) $ (149) $ 236 $ (569)
Interest Expense (1,824) (1,367) (3,943) (2,614)
---------- ---------- ---------- ----------
Income (Loss) Before Income Taxes $ 1,469 (4,458) $ 2,726 $ (3,159)
(Provision) Benefit for Income Taxes (583) 1,809 (968) 1,302
---------- ---------- ---------- ----------
NET INCOME (LOSS) $ 886 $ (2,649) $ 1,758 $ (1,857)
========== ========== ========== ==========
EARNINGS PER COMMON SHARE (Note 2) $ .08 $ .(73) $ .15 $ .(67)
========== ========== ========== ==========
DIVIDENDS PER COMMON SHARE (Note 3) $ - $ - $ - $ -
========== ========== ========== ==========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
(Note 2) $4,668,195 $4,360,225 $4,599,784 $4,347,617
========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<TABLE>
PERINI CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
(In Thousands)
SIX MONTHS
ENDED JUNE 30,
---------------------
1995 1994
-------- --------
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income (Loss) $ 1,758 $ (1,857)
Adjustments to reconcile net income to net cash
provided from operating activities:
Depreciation and amortization 1,255 1,217
Noncurrent deferred taxes and other liabilities (8,687) (8,955)
Distributions greater (less) than earnings of joint
ventures and affiliates 6,099 2,967
Cash provided from (used by) changes in components of
working capital other than cash, notes payable and
current maturities of long-term debt 24,036 (9,948)
Real estate development investments other than joint ventures
2,371 7,722
Other non-cash items, net (1,104) (1,329)
--------- ---------
NET CASH PROVIDED FROM (USED BY) OPERATING ACTIVITIES $ 25,728 $(10,183)
--------- ---------
Cash Flows from Investing Activities:
Proceeds from sale of property and equipment $ 2,788 $ 288
Cash distributions of capital from unconsolidated
joint ventures 14,848 3,633
Acquisition of property and equipment (722) (1,171)
Improvements to land held for sale or development (55) (245)
Improvements to and acquisition of real estate properties
used in operations (119) (204)
Capital contributions to unconsolidated joint
ventures (16,251) (8,199)
Advances to real estate joint ventures, net (3,168) (4,062)
Investments in other activities 176 -
--------- ---------
NET CASH USED BY INVESTING ACTIVITIES $ (2,503) $ (9,960)
--------- ---------
Cash Flows from Financing Activities:
Proceeds of long-term debt $ 3,639 $ 2,457
Repayment of long-term debt (2,872) (8,667)
Cash dividends paid (1,062) (1,062)
Proceeds from notes payable to banks - 3,000
Treasury stock issued 2,241 545
--------- ---------
NET CASH PROVIDED FROM (USED BY) FINANCING ACTIVITIES $ 1,946 $ (3,727)
--------- ---------
</TABLE>
<TABLE>
PERINI CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994 (CONTINUED)
(In Thousands)
SIX MONTHS
ENDED JUNE 30,
----------------------
1995 1994
-------- --------
<S> <C> <C>
Net Increase (Decrease) in cash $ 25,171 $(23,870)
Cash at Beginning of Year 7,841 35,871
--------- ---------
Cash at End of Period $ 33,012 $ 12,001
========= =========
Supplemental Disclosures of Cash paid during the period
for:
Interest, net of amounts capitalized $ 4,027 $ 2,688
========= =========
Income tax payments $ 143 $ 4,641
========= =========
</TABLE>
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) 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 and six month periods ended June
30, of $531,000 and $1,062,000, respectively. 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.
(3) Cash Dividends
There were no cash dividends on common stock declared or paid during the periods
presented in the condensed financial statements presented herein.
(4) 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 June 30, 1995 and December 31, 1994 and
results of operations and cash flows for the six month periods ended June 30,
1995 and 1994.
The results of operations for the six month period ended June 30, 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 Second Quarter of 1995
with the Second Quarter of 1994
Revenues increased $64 million (or 26%), from $243 million in 1994 to $307
million in 1995. This increase resulted from increased construction revenues
of $66 million (or 29%), from $228 million in 1994 to $294 million in 1995,
due primarily to an increase in revenues from building operations of $78
million (or 54%), from $144 million in 1994 to $222 million in 1995.
This increase in revenues was due primarily to the timing in the start-up
of certain hotel/casino projects in the Western U.S. and increased volume in
the Midwest due to a substantially higher backlog in that area during 1995.
This increase was partially offset by a decrease in revenues from heavy
operations of $12 million (or 14%), from $84 million in 1994 to $72 million
in 1995 due primarily to the lengthy start-up commonly associated with new
civil construction projects. In addition, revenues from real estate
operations decreased $2 million (or 13%), from $15.3 million in 1994 to
$13.3 million in 1995 due to fewer land sales.
Total gross profit increased $5 million (or 68%), from $7.4 million in 1994 to
$12.4 million in 1995 due to an overall increase in gross profit from
construction operations of $4.0 million (or 46%), from $8.6 million in 1994 to
$12.6 million in 1995 which is primarily related to the increase in building
revenues referred to above and to a lesser degree a writedown on an overseas
project in 1994. In addition, the gross loss from real estate operations was
reduced by $1.0 million, from a loss of $1.2 million in 1994 to $.2 million
loss in 1995 due to improved operating results from its two major ongoing
operating properties, The Resort at Squaw Creek and Rincon Center.
The decrease in general, administrative and selling expenses of $1.4 million
(or 13%), from $10.4 million in 1994 to $9.0 million in 1995, resulted primarily
from the ongoing cost reduction program from re-engineering certain of the
business units.
Comparison of the Six Months Ended, June 30, 1995
with the Six Months Ended, June 30, 1994
Revenues increased $152.5 million (or 36.5%), from $417.5 million in 1994 to
$570.0 million in 1995. This increase resulted from increased construction
revenues of $165 million (or 43%), from $382 million in 1994 to $547 million in
1995, due primarily to an increase in revenues from building operations of $174
million (or 73%), from $238 million in 1994 to $412 million in 1995. This
increase in revenues was due primarily to the timing in the start-up of certain
hotel/casino projects in the Western U.S. and increased volume in the Midwest
due to substantially higher backlog in that area during 1995. This increase
was partially offset by a decrease in revenues from heavy operations of $8.7
million (or 6%), from $143.5 million in 1994 to $134.8 million in 1995 due
primarily to the lengthy start-up commonly associated with new civil
construction projects. Revenue from real estate operations also decreased
by $12.5 million (or 35%), from $35.5 million in 1994 to $23 million in
1995 due to the sale in 1994 of two investment properties ($9.1 million)
and less land sales in 1995.
Total gross profit increased $4.4 million (or 22%), from $20.2 million in 1994
to $24.6 million in 1995 due to an overall increase in gross profit from
construction operations of $4.1 million (or 20%), from $20.9 million in 1994 to
$25 million in 1995 which is primarily related to the increase in building
revenues referred to above. This increase has been partially offset by less
profit from heavy construction operations due to lower margins than anticipated
on certain contracts being performed in the Metropolitan New York area. In
addition, the gross loss from real estate operations was reduced on an overall
basis by $.3 million, from $.7 million in 1994 to $.4 million in 1995 due
primarily to improved operating results from its two major ongoing operating
properties, which were partially offset by less land sales.
The decrease in general, administrative and selling expenses of $2.0 million
(or 10%), from $20.2 million in 1994 to $18.2 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 $.6 million in 1994
to income of $.2 million in 1995 was due primarily to the gain on sale of
certain land, including a quarry, in 1995 ($.6 million) and an increase in
interest income of $.4 million.
FINANCIAL CONDITION
Working capital increased $2.2 million, from $30.0 million at the end of 1994
to $32.2 million at June 30, 1995. The current ratio decreased slightly
from 1.13:1 to 1.12:1 during this same period.
During the first six months of 1995 the Company's cash on hand increased by
$25.2 million, primarily resulting from the $25.7 million generated from
operations due to an increase in accounts payables and $2.0 million from
financing activities, primarily from net borrowings. These increases were
partially offset by the $2.5 million of cash required for investments in or
advance to joint ventures.
Long-term debt at June 30, 1995 was $74.3 million, a decrease of $2.7 million
from December 31, 1994. The long-term debt to equity ratio at June 30, 1995
improved to .55 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 $115
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 certain claims received during 1995.
At June 30, 1995, there was $5 million available under the short-term line
of credit, $39 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
imit 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 June 30,
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
(a) May 18, 1995 - Annual Meeting of Shareholders
(b) Not applicable
(c) To consider and take action on the election of the following Class II
Directors, to hold office for a three year term, expiring in 1998 and
until their successors are chosen and qualified:
<TABLE>
Number of Votes
Against or Abstentions and
Class II Director For Withheld Broker Nonvotes
<S> <C> <C> <C>
Richard J. Bouskha 3,408,681 40,507 1,066,422
Jane E. Newman 3,407,050 42,138 1,066,422
Bart W. Perini 3,419,358 29,830 1,066,422
</TABLE>
(d) Not applicable
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: August 14, 1995
John H. Schwarz, Executive Vice President,
Finance and Administration
Date: August 14, 1995
Barry R. Blake, Vice President and Controller
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: August 14, 1995 /s/ John H. Schwarz
John H. Schwarz, Executive Vice President,
Finance and Administration
Date: August 14, 1995 /s/ Barry R. Blake
Barry R. Blake, Vice President and Controller
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Balance Sheets as of June 30, 1995 and the Consolidated Statemetns
of Operations for the twelve months ended December 31, 1994 and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> JUN-30-1995
<CASH> 33,012
<SECURITIES> 0
<RECEIVABLES> 159,640
<ALLOWANCES> 0
<INVENTORY> 18,482
<CURRENT-ASSETS> 307,391<F1>
<PP&E> 41,325
<DEPRECIATION> (28,665)
<TOTAL-ASSETS> 512,349<F2>
<CURRENT-LIABILITIES> 275,244
<BONDS> 74,270
<COMMON> 4,985
100
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 134,968<F3>
<SALES> 0
<TOTAL-REVENUES> 570,050
<CGS> 0
<TOTAL-COSTS> (563,617)
<OTHER-EXPENSES> 236
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (3,943)
<INCOME-PRETAX> 2,726<F4>
<INCOME-TAX> (968)
<INCOME-CONTINUING> 1,758
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,758
<EPS-PRIMARY> .08
<EPS-DILUTED> 0
<FN>
<F1>Includes Equity in Construction Joint Ventures of $61,986, Unbilled Work of
$24,306, and Other Short-Term Assets of $9,965, not currently reflected in this
tag list.
<F2>Includes investments in and advances to Real Estate Joint Ventures of $146,051,
Land Held for Sale or Development of $38,527, and Other Long-Term Assets of
$7,720 not currently reflected in this tag list.
<F3>Includes Deferred Income Taxes and Other Liabilities of $24,801, Minority
Interest of $3,066, Paid-In Surplus of $57,668, Retained Earnings of $82,468,
ESOT Related Obligations of $(6,009), and Treasury Stock of $(4,244).
<F4>Includes General, Administrative and Selling Expenses of $(18,158), not
currently reflected on this tag list.
</FN>
</TABLE>
