<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM 10-Q
/X/ Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter Ended September 30, 1996
OR
/_/ 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 0-14292
GTS DURATEK, INC.
(Exact name of Registrant as specified in its charter)
Delaware 22-2476180
- -------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8955 Guilford Road, Suite 200, Columbia, Maryland 21046
- ------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (410)312-5100
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 outstanding of each of the issuer's classes of common stock as
of November 1, 1996:
Common Stock, par value $0.01 per share 12,455,302 shares
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GTS DURATEK, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
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<TABLE>
<CAPTION>
PAGE
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<S> <C> <C>
PART I FINANCIAL INFORMATION
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Item 1. Financial Statements
Consolidated Condensed Balance Sheets
as of September 30, 1996 and December 31, 1995 ............. 1
Consolidated Condensed Statements of Operations for the Three
and Nine Months Ended September 30, 1996 and 1995 .......... 2
Consolidated Condensed Statement of Changes in Stockholders'
Equity for the Nine Months Ended September 30, 1996 ........ 3
Consolidated Condensed Statements of Cash Flows
for the Nine Months Ended September 30, 1996 and 1995 ...... 4
Notes to Consolidated Financial Statements ................... 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations .................................. 6
Qualification Relating to Financial Information .............. 9
PART II OTHER INFORMATION
- -------
Item 6. Exhibits and Reports on Form 8-K ............................. 11
Signatures ................................................... 12
</TABLE>
<PAGE>
PART I FINANCIAL INFORMATION
- ------
Item 1. Financial Statements
GTS DURATEK, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1996 1995
------------- ------------
(UNAUDITED) *
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents .................... $46,657,805 $11,396,008
Receivables, net ............................. 9,711,714 9,321,513
Costs and estimated earnings in excess of
billings on uncompleted contracts ........... 9,718,810 7,707,434
Inventories .................................. 432,828 274,859
Prepaid expenses and other current assets .... 285,685 79,686
----------- -----------
Total current assets ..................... 66,806,842 28,779,500
----------- -----------
Property, plant and equipment, net ............. 7,290,346 3,541,462
Investments in and advances to joint
venture, net .................................. 6,562,311 4,059,078
Intangibles, net ............................... 482,951 553,517
Deferred charges and other assets .............. 1,586,813 1,726,270
----------- -----------
$82,729,263 $38,659,827
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt and
obligations under capital leases ............ $ 47,747 $ 470,709
Accounts payable and accrued expenses ........ 3,464,240 4,194,713
----------- -----------
Total current liabilities ................ 3,511,987 4,665,422
Long-term debt and obligations under capital
lease.......................................... 219,560 36,000
Convertible debenture .......................... 10,522,828 10,086,931
----------- -----------
Total liabilities ........................ 14,254,375 14,788,353
----------- -----------
Minority interest of subsidiary ................ -- 5,610
----------- -----------
Redeemable convertible preferred stock
(Liquidation value $16,320,000) ............... 14,773,638 14,608,890
----------- -----------
Stockholders' equity:
Common stock ................................. 123,466 94,758
Capital in excess of par value ............... 63,010,171 18,912,751
Deficit ...................................... (9,260,610) (9,578,758)
Treasury stock, at cost ...................... (171,777) (171,777)
----------- -----------
Total stockholders' equity ............... 53,701,250 9,256,974
----------- -----------
$82,729,263 $38,659,827
=========== ===========
</TABLE>
* The Consolidated Condensed Balance Sheet as of December 31, 1995 has been
derived from the Company's audited Consolidated Balance Sheet as of that date.
1
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GTS DURATEK, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
------------------------ --------------------------
1996 1995 1996 1995
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues ............. $11,482,350 $9,426,299 $33,463,690 $28,947,692
Cost of revenues ..... 9,461,546 7,478,492 26,243,475 23,397,469
----------- ---------- ----------- -----------
Gross profit ......... 2,020,804 1,947,807 7,220,215 5,550,223
Selling, general and
administrative
expenses............. 1,830,145 1,427,004 5,825,537 4,152,433
----------- ---------- ----------- -----------
Income from
operations .......... 190,659 520,803 1,394,678 1,397,790
Interest income,
net ................. 475,985 47,209 740,992 73,124
----------- ---------- ----------- -----------
Income before income
taxes and
proportionate share
of loss of joint
venture.............. 666,644 568,012 2,135,670 1,470,914
Income taxes ......... 180,588 56,898 547,376 147,113
----------- ---------- ----------- -----------
Income before
proportionate share
of loss of joint
venture ............. 486,056 511,114 1,588,294 1,323,801
Proportionate share of
loss of joint
venture ............. (60,000) (37,915) (145,398) (170,225)
----------- ---------- ----------- -----------
Net income ........... $ 426,056 $ 473,199 $ 1,442,896 $ 1,153,576
=========== ========== =========== ===========
Net income
per share ........... $ .00 $ .01 $ .02 $ .02
=========== ========== =========== ===========
Weighted number of
common shares
outstanding and
common stock
equivalents.......... 14,817,779 8,784,859 13,683,337 8,731,551
=========== ========== =========== ===========
</TABLE>
2
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GTS DURATEK, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCK CAPITAL IN TOTAL
-------------------- EXCESS OF TREASURY STOCKHOLDERS'
SHARES AMOUNT PAR VALUE DEFICIT STOCK EQUITY
---------- -------- ----------- ----------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31,
1995 9,475,878 $ 94,758 $18,912,751 $(9,578,758) $(171,777) $ 9,256,974
Net Income 1,442,896 1,442,896
Preferred dividends (960,000) (960,000)
Exercise of options
and warrants 370,783 3,708 969,310 973,018
Accretion of
redeemable preferred
stock (164,748) (164,748)
Issuance of common
stock in exchange for
cash 2,500,000 25,000 43,128,110 43,153,110
---------- -------- ----------- ----------- --------- -----------
Balance, Sept. 30,
1996 12,346,661 $123,466 $63,010,171 $(9,260,610) $(171,777) $53,701,250
========== ======== =========== =========== ========= ===========
</TABLE>
3
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GTS DURATEK, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------
1996 1995
------------ ------------
<S> <C> <C>
Cash flows from operations:
Net income ................................ $ 1,442,896 $ 1,153,576
Adjustments to reconcile net income to net
cash used in operating activities:
Depreciation and amortization ........... 457,241 451,636
Accrued interest on
convertible debenture .................. 435,897 --
Proportionate share of loss of joint
venture................................. 85,398 170,225
Changes in operating items:
Receivables ........................... (611,366) 1,112,435
Cost in excess of billings ............ (2,011,376) (3,282,491)
Inventories ........................... (157,969) 45,511
Accounts payables and
accrued expenses ..................... (804,775) (1,174,312)
Other operating items ................. (203,545) (122,331)
----------- -----------
Net cash used in operating
activities ......................... (1,367,599) (1,645,751)
----------- -----------
Cash flows from investing activities:
Additions to property, plant and
equipment, net ......................... (3,562,938) (188,400)
Advances to joint venture ............... (2,588,631) (1,655,252)
Acquisition of Analytical Resources,
Inc., net of cash acquired ............. (278,446) --
Other ................................... 419,316 (17,778)
----------- -----------
Net cash used in investing
activities ......................... (6,010,699) (1,861,430)
----------- -----------
Cash flows from financing activities:
Net repayment of short-term
borrowings ............................. -- (7,630,512)
Reduction of long-term debt and capital
lease obligations ...................... (526,033) (526,029)
Proceeds from issuance of
common stock ........................... 44,126,128 253,270
Proceeds from issuance of redeemable
preferred stock ........................ -- 14,410,027
Payment of preferred stock dividends .... (960,000) (555,200)
Proceeds from issuance of
stock option ........................... -- 280,000
----------- -----------
Net cash provided by
financing activities ...... 42,640,095 6,231,556
----------- -----------
Net change in cash and cash equivalents ... 35,261,797 2,724,375
Cash and cash equivalents at beginning of
period.................................. 11,396,008 --
----------- -----------
Cash and cash equivalents at end of
period.................................. $46,657,805 $ 2,724,375
----------- -----------
Cash paid for:
Interest ................................ $ 63,287 $ 154,380
=========== ===========
Income taxes ............................ $ 556,790 $ 58,711
=========== ===========
Supplemental cash flow information:
Equipment acquired under capital lease
arrangement............................. $ 271,777 $ --
=========== ===========
</TABLE>
4
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GTS DURATEK, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company and
its subsidiaries, all of which are wholly-owned except for DuraTherm, Inc. which
is 80% owned. All significant intercompany balances and transactions have been
eliminated in consolidation. Investments in subsidiaries and joint ventures in
which the Company does not have control or majority ownership are accounted for
under the equity method.
2. INVENTORIES
Inventories, consisting of material, labor and overhead, are classified as
follows:
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1996 1995
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<S> <C> <C>
Raw materials .................................. $148,369 $ 36,256
Finished goods ................................. 284,459 238,603
-------- --------
$432,828 $274,859
======== ========
</TABLE>
3. OFFERING
On April 26, 1996, the Company sold 2,500,000 shares of its common stock and
certain of the Company's stockholders sold 1,100,000 shares of the Company's
common stock in a secondary public offering at a price of $18.50 per share. Net
proceeds to the Company after underwriting discounts, commissions and expenses
were approximately $43.3 million. The Company intends to use the net proceeds to
expand its waste treatment technology operations, including for working capital,
funding of waste treatment technology projects, and research and development.
The Company may use a portion of the net proceeds for the acquisition of
businesses or technologies complementary to the Company's business.
4. NET INCOME PER SHARE
The net income per share for 1996 and 1995 was computed by dividing the net
income applicable to common stock, which reflects the preferred stock dividend
requirement and accretion, by the weighted average number of shares of common
stock outstanding and common stock equivalents to the extent they result in
additional dilution. For the three and nine months ended September 30, 1995 the
common stock equivalents were deemed to be anti-dilutive and, accordingly, are
not included in the weighted average number of shares used in determining net
income per share. As the Company has issued options and warrants which exceed
20% of the common stock outstanding, the Company determines the dilutive effect
of such common stock equivalents using the modified treasury stock method. For
the three and nine months ended September 30, 1996, the common stock equivalents
were deemed to be dilutive and are included in the weighted average number of
shares used in determining net income per share. The fully diluted effect of the
Company's convertible securities was deemed to be anti-dilutive for all periods
presented.
5
<PAGE>
Item 2. Management's Discussion And Analysis Of Financial
Condition And Results Of Operations
GTS DURATEK, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
OVERVIEW
GTS Duratek has historically derived substantially all of its revenues from
technical support services to government agencies, electric utilities,
industrial facilities and commercial businesses. Technical support services are
generally provided pursuant to multi-year time-and materials contracts. Revenues
are recognized as costs are incurred according to predetermined rates. The
contract costs primarily include direct labor, materials and the indirect costs
related to contract performance.
Historically, the Company's waste treatment revenues have been generated from
projects in which the Company acts as a subcontractor for the Department of
Energy ("DOE") pursuant to fixed-price and cost-plus-fixed-fee contracts.
Revenues are recognized on the percentage-of-completion method as costs are
incurred as measured by the cost-to-cost method.
The Company's results of operations are significantly affected by the timing
of the award of contracts and the timing and performance on contracts. These
factors directly affect the Company's pre-tax income and net income. The
quarter-to-quarter results continue to be affected by the Company's electric
utility customers scheduling of nuclear power plant outages causing the demand
for these services to often shift between quarters. Accordingly, results of
operations for the quarter and quarter-to-quarter comparisons may not be as
meaningful as comparisons over longer periods.
RESULTS OF OPERATIONS
Three Months Ended September 30, 1995 Compared to Three Months Ended September
30, 1996.
Revenues increased by $2.1 million or 21.8% from $9.4 million in 1995 to $11.5
million in 1996. The increase was primarily attributable to a $3.7 million
increase in technical support services revenues and a $1.0 million teaming fee
received from BNFL in exchange for the Company's agreement to exclusively team
with BNFL on a third DOE waste treatment project. Such increases were offset by
a decline in revenues from waste treatment projects and facilities of $2.6
million as compared to the prior year.
The increase in technical support services revenues was primarily the result
of more work performed on power plant outage and support services contracts with
Duke Power Company and Vermont Yankee Nuclear Power Corporation for the third
quarter of 1996 as compared to the same period in 1995. The decrease in revenues
from waste treatment projects and facilities was the result of lower revenues
recognized on the Savannah River M-Area project with Westinghouse due to a
temporary delay in the start-up of this facility and to the completion of
several other projects in 1995. This decline was mitigated by $1.1 million in
revenue from the DuraTherm commercial waste treatment facility which began
operations in the second quarter of 1996.
Gross profit remained stable at $1.9 million in 1995 compared to $2.0 million
in 1996. Gross profit attributable to technical support services increased
approximately $400,000. Gross profits attributable to waste treatment projects
decreased approximately $300,000 after including the effect of the teaming fee
from BNFL. As a percentage of revenues, gross profit decreased from 20.7% in
1995 to 17.6% in 1996. The decrease resulted from higher revenues achieved from
technical support services which have a lower gross margin than waste treatment
projects.
Selling, general and administrative expenses increased by $400,000 or 28.3%
from $1.4 million in 1995 to $1.8 million in 1996. The increase was principally
the result of higher operating costs for waste treatment projects, costs
incurred to develop and expand this business, and operating costs for the
DuraTherm facility which began operations in the second quarter of 1996. As a
percentage of revenues, selling general and administrative expenses increased
slightly from 15.1% in 1995 to 15.9% in 1996.
Interest income, net increased by $400,000 from 1995 to 1996. The increase was
principally the result of interest income from the net proceeds of the public
stock offering.
6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
GTS DURATEK, INC. AND SUBSIDIARIES
Nine Months Ended September 30, 1995 Compared to Nine Months Ended
September 30, 1996.
Revenues increased by $4.5 million or 15.6% from $28.9 million in 1995 to
$33.5 million in 1996. The increase was primarily attributable to an increase in
revenues from technical support services of $3.6 million and $2.0 million in
teaming fees received from BNFL in exchange for the Company's agreement to
exclusively team with BNFL on two DOE waste treatment projects. Such increases
were partially offset by a decline in revenues from waste treatment projects and
facilities of $1.1 million as compared to the prior year.
The increase in revenues in technical support services was the result of more
work performed on power plant outage and support services contracts with Duke
Power Company, partially offset by reduced demand for training and consulting
services to commercial nuclear power plants as compared to the same period in
1995. The decrease in revenues from waste treatment projects and facilities was
attributable to lower revenues achieved on the Savannah River M-Area contract
resulting from the delay in starting up this facility and the completion of
several other projects in 1995. This decline was mitigated by $2.2 million in
revenue from the DuraTherm commercial waste treatment facility which began
operations in the second quarter of 1996.
Gross profit increased by $1.7 million or 30.1% from $5.6 million in 1995 to
$7.2 million in 1996. The teaming fees from BNFL represented approximately
$2.0 million of the increase. The remaining $300,000 decrease was the result of
a decrease in gross profit from DOE waste treatment projects, partially offset
by an increase in gross profit from commercial waste treatment projects and
technical support services. As a percentage of revenues, gross profit increased
from 19.2% in 1995 to 21.6% in 1996. The gross profit percentage from technical
support services and waste treatment projects, exclusive of the BNFL fees, was
comparable from 1995 to 1996.
Selling, general and administrative expenses increased by $1.7 million or
40.3% from $4.2 million in 1995 to $5.8 million in 1996. As a percentage of
revenues, selling, general and administrative expenses increased from 14.3% in
1995 to 17.4% in 1996. The increase was principally the result of higher
operating costs for waste treatment projects for the DOE and commercial
projects, costs incurred to develop and expand this business, as well as
pre-operating costs for the DuraTherm waste treatment facility.
Interest income, net increased by approximately $700,000 from 1995 to 1996.
The increase was principally the result of interest income from the net proceeds
of the public stock offering partially offset by interest expense on the
convertible debenture held by BNFL.
LIQUIDITY AND CAPITAL RESOURCES
On April 26, 1996, the Company completed a public offering of 2,500,000 shares
of Common Stock sold by the Company and 1,100,000 shares of Common Stock sold by
certain shareholders. The shares were sold to the public at a price of $18.50
per share. Net proceeds to the Company after underwriting discounts, commissions
and expenses were approximately $43.3 million. The Company intends to use the
net proceeds to expand its waste treatment technology operations, including for
working capital, funding of waste treatment technology projects, and research
and development. The Company may use a portion of the net proceeds for the
acquisition of businesses or technologies complementary to the Company's
business.
During the nine months ended September 30, 1996, the Company used $6.0 million
of cash in investing activities principally related to equipment acquired for
improvements to the DuraTherm facility and additional investment in DuraChem.
The Company has a revolving line of credit agreement with a bank providing for
borrowings up to $7.0 million based upon eligible amounts of accounts
receivable, as defined in the agreement. Borrowings outstanding under the
agreement are due on demand and bear interest at the bank's LIBOR rate plus 2%.
At September 30, 1996, no borrowings were outstanding.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
GTS DURATEK, INC. AND SUBSIDIARIES
The Company believes cash flows from operations, cash resources, the net
proceeds of the public offering and, if necessary, borrowings under the bank
line of credit will be sufficient to meet its operating needs, including the
quarterly preferred dividend requirement of $320,000.
OTHER ITEMS
Costs and estimated earnings in excess of billings on uncompleted contracts
were $9.7 million and $7.7 million at September 30, 1996 and December 31, 1995,
respectively. The increase of $2.0 million for the nine month period is
primarily attributable to the work performed under the Savannah River M-Area
project. Such amounts are expected to be billed and collected over the next
twelve month period.
8
<PAGE>
Item 2. Qualification Relating to Financial Information
GTS DURATEK, INC. AND SUBSIDIARIES
The consolidated financial information included herein is unaudited, and does
not include all disclosures required under generally accepted accounting
principles because certain note information included in the Company's Annual
Report, filed on Form 10-K, has been omitted; however, such information reflects
all adjustments (consisting solely of normal recurring adjustments) which are,
in the opinion of management, necessary for a fair presentation of the financial
position, results of operations and cash flows for the interim periods
presented. The results of the 1996 interim period are not necessarily indicative
of results to be expected for the entire year.
9
<PAGE>
PART II OTHER INFORMATION
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GTS DURATEK, INC. AND SUBSIDIARIES
Item 5. Other Information.
In response to the "safe harbor" provisions contained in the Private
Securities Litigation Reform Act of 1995, the Company is including in this
Quarterly Report on Form 10-Q the following cautionary statements which are
intended to identify certain important factors that could cause the Company's
actual results to differ materially from those projected in forward-looking
statements of the Company made by or on behalf of the Company. Many of these
factors have been discussed in prior filings with the Securities and Exchange
Commission, including the discussion of "Risk Factors" contained in the
Company's Registration Statement on Form S-2 (File No. 333-01805) which became
effective on April 22, 1996, to which reference is hereby made.
The Company experienced significant growth in waste treatment project revenues
during 1995 and through the third quarter of 1996. However, there can be no
assurance that the Company will be able to sustain these favorable operating
trends in future periods. The Company's future operating results may fluctuate
due to factors such as: the acceptance and implementation of its waste treatment
technologies, particularly vitrification and thermal desorption, in the
governmental and commercial sectors; the evaluation by DOE and other customers
of the Company's technologies versus other competing technologies as well as
conventional storage and disposal alternatives; the timing of new waste
treatment projects, including those pursued jointly with BNFL; and the Company's
ability to maintain existing collaborative relationships or enter into new
collaborative arrangements in order to commercialize its waste treatment
technologies. In addition, the Company's future operating results are largely
dependent upon the timing and awarding of future contracts by the DOE for the
cleanup of the waste sites administered by it. The timing and award of such
contracts by the DOE is directly related to the response of governmental
authorities to public concern over the treatment and disposal of radioactive,
hazardous, mixed and other wastes. The lessening of public concern in this area
or other changes in the political environment could adversely affect the
availability and timing of government funding for the cleanup of DOE and other
sites containing radioactive and mixed wastes. Additionally, revenues from
technical support services have in the past and continue to account for a
substantial portion of the Company's revenues, and the loss of one or more
technical support service contracts could adversely affect the Company's future
operating results.
10
<PAGE>
PART II OTHER INFORMATION
- -------
GTS DURATEK, INC. AND SUBSIDIARIES
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
--------
See accompanying Index to Exhibits
b. Reports
-------
None.
11
<PAGE>
GTS DURATEK, INC. AND SUBSIDIARIES
SEPTEMBER 30, 1996
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.
GTS DURATEK, INC.
Dated: November 11, 1996 BY: /s/ Robert F. Shawver
----------------------------------
Robert F. Shawver
Executive Vice President and
Chief Financial Officer
Dated: November 11, 1996 BY: /s/ Craig T. Bartlett
----------------------------------
Craig T. Bartlett
Controller and Principal
Accounting Officer
12
<PAGE>
EXHIBITS INDEX
<TABLE>
<CAPTION>
<S> <C>
3.1 Amended and Restated Certificate of Incorporation of the
Registrant. Incorporated herein by reference to Exhibit 3.1 of the
Registrant's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996. (File No. 0-14292)
3.2 By-Laws of the Registrant. Incorporated herein by reference to
Exhibit 3.3 of the Registrant's Form S-1 Registration Statement No.
33-2062.
4.1 Certificate of Designations of the 8% Cumulative Convertible
Redeemable Preferred Stock dated January 23, 1995. Incorporated
herein by reference to Exhibit 4.1 of the Registrants Form 8-K
filed on February 1, 1995. (File No. 0-14292)
4.2 Stock Purchase Agreement among Carlyle Partners II, L.P., Carlyle
International Partners II, L.P., Carlyle International Partners
III, L.P., C/S International Partners, Carlyle-GTSD Partners, L.P.
Carlyle-GTSD Partners II, L.P. and GTS Duratek, Inc. and National
Patent Development Corporation dated as of January 24, 1995.
Incorporated herein by reference to Exhibit 4.2 of the Registrants
Form 8-K filed on February 1, 1995. (File No. 0-14292)
4.3 Stockholders Agreement by and among GTS Duratek, Inc., Carlyle
Partners II, L.P., Carlyle International Partners II, L.P., Carlyle
International Partners III, L.P., C/S International Partners,
Carlyle-GTSD Partners, L.P., Carlyle-GTSD Partners II, L.P. and GTS
Duratek, Inc. and National Patent Development Corporation dated as
of January 24, 1995. Incorporated herein by reference to Exhibit
4.3 of the Registrants Form 8-K filed on February 1, 1995. (File
No. 0-14292)
4.4 Registration Rights Agreement by and among GTS Duratek, Inc.,
Carlyle Partners II, L.P., Carlyle International Partners II, L.P.,
Carlyle International Partners III, L.P., C/S International
Partners, Carlyle-GTSD Partners, L.P., Carlyle-GTSD Partners II,
L.P.and GTS Duratek, Inc. and National Patent Development
Corporation dated as of January 24, 1995. Incorporated herein by
reference to Exhibit 4.4 of the Registrants Form 8-K filed on
February 1, 1995. (File No. 0-14292.)
4.5 Convertible Debenture issued by GTS Duratek, Inc., General
Technical Services, Inc. and GTS Instrument Services Incorporated
to BNFL Inc. dated November 7, 1995. Incorporated herein by
reference to Exhibit 10.20 of the Registrant's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1995 (File No.
0-14292).
10.1 1984 Duratek Corporation Stock Option Plan, as Amended.
Incorporated herein by reference to Exhibit 10.9 of the
Registrant's Annual Report on Form 10-K for the year ended December
31, 1990.
10.2 Asset Purchase Agreement dated August 20, 1990 between Chem-Nuclear
Systems, Inc. and Duratek Corporation. Incorporated herein by
reference to Exhibit 1 to the Registrant's Form 8-K filed on August
20, 1990. (File No. 0-14292)
10.3 Loan and Security Agreement dated February 9, 1993 between The Bank
of Baltimore and GTS Duratek, Inc., General Technical Service,
Inc., and GTS Instrument Services, Inc. Incorporated herein by
reference to Exhibit 10.8 of the Registrant's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1993. (File No. 0-14292)
</TABLE>
E-1
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
10.4 License Agreement dated as of August 17, 1992 between GTS Duratek,
Inc. and Dr. Theodore Aaron Litovitz and Dr. Pedro Buarque de
Macedo. Incorporated herein by reference to Exhibit 10.9 of the
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1992. (File No. 0-14292)
10.5 Purchase Agreement dated October 15, 1993 between GTS Duratek,
Inc. and Environmental Corporation of America. Incorporated herein
by reference to Exhibit 2 of the Registrant's Form 8-K Current
Report dated October 15, 1993. (File No. 0-14292)
10.6 Warrant Agreement dated October 15, 1993 between GTS Duratek, Inc.
and Environmental Corporation of America. Incorporated herein by
reference to Exhibit 2 of the Registrant's Form 8-K Current Report
dated October 15, 1993. (File No. 0-14292)
10.7 Stock Purchase Agreement dated December 22, 1993 between GTS
Duratek, Inc. and Jack J. Spitzer. Incorporated herein by
reference to Exhibit 1 of the Registrant's Form 8-K Current Report
dated December 22, 1993. (File No. 0-14292)
10.8 Stock Purchase Agreement dated December 22, 1993 between GTS
Duratek, Inc. and Joseph H. Domberger. Incorporated by reference
to Exhibit 2 of the Registrant's Form 8-K Current Report dated
December 22, 1993. (File No. 0-14292)
10.9 Stockholders' Agreement dated December 28, 1993 between GTS
Duratek, Inc. and Vitritek Holdings, L.L.C. Incorporated by
reference to Exhibit 3 of the Registrant's Form 8-K Current Report
dated December 22, 1993. (File No. 0-14292)
10.10 Agreement dated January 14, 1994 between GTS Duratek, Inc. and
Westinghouse Savannah River Company. Incorporated by reference to
Exhibit 10.17 of the Registrant's Annual Report on Form 10-K for
the year ended December 31, 1993. (File No. 0-14292)
10.11 Agreement dated February 24, 1994 between GTS Duratek, Inc. and
the University of Chicago (Operator of Argonne National
Laboratory). Incorporated by reference to Exhibit 10.18 of the
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1993. (File No. 0-14292)
10.12 Agreement dated September 15, 1994 between DuraChem Limited
Partnership a Maryland Limited Partnership, by and among CNSI Sub,
Inc. and GTSD Sub, Inc. as the General Partners, and Chemical
Waste Management, Inc. and GTS Duratek, Inc. as the Limited
Partners. Incorporated herein by reference to Exhibit 10-19 of the
Registrant's Annual Report on 10-K for the year ended December 31,
1994 (File No. 0-14292)
10.13 Teaming Agreement by and between GTS Duratek, Inc. and BNFL Inc.
dated November 7, 1995. Incorporated herein by reference to
Exhibit 10.20 of the Registrant's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1995 (File No. 0-14292).
10.14 Sublicense Agreement by and between GTS Duratek, Inc. and BNFL
Inc. dated November 7, 1995. Incorporated herein by reference to
Exhibit 10.20 of the Registrant's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1995 (File No. 0-14292).
10.15 Stock Purchase Agreement by and among Bird Environmental Gulf
Coast, Inc., Bird Environmental Technologies, Inc., Bird
Corporation, GTS Duratek, Inc. and GTSD Sub II, Inc. dated as of
November 29, 1995. Incorporated herein by reference to Exhibit
(c)(2) of Registrant's Current Report on Form 8-K filed on
December 11, 1995 (File No. 0-14292).
</TABLE>
E-2
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
10.16 Stockholders' Agreement by and among Bird Environmental Gulf
Coast, Inc. GTS Duratek, Inc., GTSD Sub II, Inc., Jim S. Hogan,
Mark B. Hogan, Barry K. Hogan and Sam J. Lucas III dated November
29, 1995. Incorporated herein by reference to Exhibit (c)(3) of
the Registrant's Current Report on Form 8-K filed on December 11,
1995 (File No. 0-14292).
10.17 Technology License Agreement by and among GTS Duratek, Inc., Bird
Environmental Gulf Coast, Inc. and Jim S. Hogan dated November 29,
1995. Incorporated herein by reference to Exhibit (c)(4) of the
Registrant's Current Report on Form 8-K filed on December 11,
1995. (File No. 0-14292).
11.1 GTS Duratek Inc., and Subsidiaries, Computation of Earnings Per
Share for the three months and nine months ended September 30,
1996. (filed herewith)
27 Financial Data Schedule. (filed herewith)
</TABLE>
E-3
<PAGE>
Exhibit 11.1
GTS DURATEK, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED SEPT. 30 ENDED SEPT.30
------------------------ -------------------------
1996 1995 1996 1995
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Primary:
Earnings applicable to
common stock $ 426,056 $ 473,199 $ 1,442,896 $1,153,576
Accrued dividend on
preferred stock (320,000) (320,000) (960,000) (875,200)
Accretion of redeemable
preferred stock (55,122) (54,303) (164,749) (144,358)
----------- ---------- ----------- ----------
Net earnings applicable
to common stock $ 50,934 $ 98,896 $ 318,147 $ 134,018
=========== ========== =========== ==========
Average common shares
outstanding 12,276,192 8,784,859 11,142,706 8,731,551
Dilutive effect of
stock options and
warrants 2,488,879 N/A 2,512,337 N/A
----------- ---------- ----------- ----------
Weighted average common
share outstanding 14,765,071 8,784,859 13,655,043 8,731,551
=========== ========== =========== ==========
Earnings per common
share $ .00 $ .01 $ .02 $ .02
=========== ========== =========== ==========
Fully Diluted:
Earnings applicable to
common stock $ 426,056 $ 1,442,896
Accrued dividend on
preferred stock (320,000) (960,000)
Accretion of redeemable
preferred stock (55,122) (164,749)
----------- -----------
Net earnings applicable
to common stock $ 50,934 $ 318,147
=========== ===========
Average common shares
outstanding 12,276,192 11,142,706
Dilutive effect of
stock options and
warrants 2,541,587 2,540,631
----------- -----------
Weighted average of
common shares
outstanding 14,817,779 13,683,337
=========== ===========
Earnings per common
share $ .00 $ .02
=========== ===========
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED CONDENSED BALANCE SHEET AS OF SEPTEMBER 30, 1996 (UNAUDITED) AND
THE CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1996 (UNAUDITED) OF GTS DURATEX, INC. AND SUBSIDIARIES, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 46,657,805
<SECURITIES> 0
<RECEIVABLES> 19,529,488
<ALLOWANCES> (98,964)
<INVENTORY> 432,828
<CURRENT-ASSETS> 66,806,842
<PP&E> 11,713,533
<DEPRECIATION> (4,423,187)
<TOTAL-ASSETS> 82,729,263
<CURRENT-LIABILITIES> 3,511,987
<BONDS> 10,790,135
14,773,638
0
<COMMON> 123,466
<OTHER-SE> 53,577,784
<TOTAL-LIABILITY-AND-EQUITY> 82,729,263
<SALES> 0
<TOTAL-REVENUES> 33,463,690
<CGS> 0
<TOTAL-COSTS> 26,243,475
<OTHER-EXPENSES> 5,808,037
<LOSS-PROVISION> 17,500
<INTEREST-EXPENSE> (740,992)
<INCOME-PRETAX> 2,135,670
<INCOME-TAX> 547,376
<INCOME-CONTINUING> 1,442,896
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,442,896
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
