<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
_______________________
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 29, 1995
GTS DURATEK, INC.
(Exact Name of Registrant as Specified in Charter)
DELAWARE 0-14292 22-2476180
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) 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
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 2. Acquisition or Disposition of Assets.
On November 29, 1995, GTS Duratek, Inc. (the "Company") acquired 80%
of the outstanding capital stock of Bird Environmental Gulf Coast, Inc.
("BEGCI") from Bird Environmental Technologies, Inc. ("BETI"), a wholly-owned
subsidiary of Bird Corporation ("Bird"), for an aggregate consideration of
$1.00 and the Company committed to invest up to $5.1 million in the business
as described below. BEGCI owns a hazardous waste recycling facility in San
Leon, Texas, which has suspended operations pending the capital improvements
described below, which are intended to enable the facility to reach its full
design capacity. At August 31, 1995 (the date of BEGCI's most recently
available unaudited balance sheet), BEGCI had total assets of approximately
$14.1 million, including net fixed assets of approximately $12.6 million
(audited financial statements are being filed herein pursuant to Item 7).
Under the terms of the purchase transaction, Bird agreed to fund the working
capital deficit of BEGCI as of August 31, 1995 and, accordingly, contributed
to BEGCI approximately $1.3 million upon the closing of the stock purchase.
The remaining 20% of the outstanding capital stock of BEGCI is owned
by certain individuals who have operated and will continue to operate the
facility and who will remain as minority shareholders (the "Minority
Shareholders"). The Minority Shareholders have entered into employment
agreements providing for incentive compensation tied directly to the
financial performance of the facility. The Company entered into a
stockholders' agreement with the Minority Shareholders pursuant to which,
among other terms and conditions, it agreed to invest up to $5.1 million in
BEGCI as needed, up to $2.4 million of which will be used for general working
capital purposes and up to $2.7 million of which will be used for capital and
plant start-up expenditures. The Company expects to make the capital
investments needed to return the BEGCI plant to commercial operations during
the fourth quarter of 1995 and the first quarter of 1996, and expects to
reopen the plant during the second quarter of 1996. The Company will use its
internal funds for the investment in BEGCI. As part of the purchase
transaction, the Company also acquired through a license arrangement the
exclusive worldwide rights to the patented technology used by BEGCI's
facility to process and treat the hazardous waste. The technology, known as
thermal desorption, was developed by one of the Minority Shareholders.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED:
(i) December 31, 1994 and November 30, 1995 Financial Statements of
Bird Environmental Gulf Coast, Inc. and Report of Independent
Certified Public Accountants.
2
<PAGE>
(b) PRO FORMA FINANCIAL INFORMATION:
(i) Pro Forma Consolidated Balance Sheet as of September 30, 1995 and
related notes.
(ii) Pro Forma Consolidated Statement of Operations for the year ended
December 30, 1994 and related notes.
(iii) Pro Forma Consolidated Statement of Operations for the nine months
ended September 30, 1995 and related notes.
(c) EXHIBITS. The following exhibits are filed with this report, and the
foregoing description is modified by reference to such exhibits:
(1) GTS Duratek, Inc. Press Release dated November 30, 1995.*
(2) 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.*
(3) 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.*
(4) Technology License Agreement by and among GTS Duratek, Inc., Bird
Environmental Gulf Coast, Inc. and Jim S. Hogan dated November 29,
1995.*
(5) Consent of Independent Certified Pubic Accountants.
*Previously filed with the Company's Current Report on Form 8-K which was
filed with the Securities and Exchange Commission on December 11, 1995.
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 hereunto duly authorized.
GTS Duratek, Inc.
/s/ Robert F. Shawver
---------------------------
Robert F. Shawver
Executive Vice President
and Chief Financial Officer
Date: February 7, 1996
3
<PAGE>
BIRD ENVIRONMENTAL
GULF COAST, INC.
FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND NOVEMBER 30, 1995
(WITH INDEPENDENT AUDITORS' REPORT THEREON)
4
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Bird Environmental Gulf Coast, Inc.
We have audited the accompanying balance sheets of Bird Environmental Gulf
Coast, Inc. as of December 31, 1994 and November 30, 1995 and the related
statements of operations, stockholders' equity, and cash flows for the year
ended December 31, 1994 and the eleven months ended November 30, 1995. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bird Environmental Gulf
Coast, Inc. at December 31, 1994 and November 30, 1995 and the results of its
operations and cash flows for the year ended December 31, 1994 and the eleven
months ended November 30, 1995 in conformity with generally accepted
accounting principles.
KPMG PEAT MARWICK LLP
Baltimore, Maryland
January 20, 1996
5
<PAGE>
BIRD ENVIRONMENTAL GULF COAST, INC.
Balance Sheets
December 31, 1994 and November 30, 1995
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
1994 1995
- --------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current Assets
Cash $ 149,504 1,298,216
Accounts receivable 1,377,342 -
Inventories 15,951 1,041
Prepaid expenses 43,700 1,800
- --------------------------------------------------------------------------------------
Total current assets 1,586,497 1,301,057
- --------------------------------------------------------------------------------------
Closure bond 316,224 326,689
- --------------------------------------------------------------------------------------
Property, plant and equipment
Land 350,000 921,450
Equipment 13,996,567 13,514,421
- --------------------------------------------------------------------------------------
14,346,567 14,435,871
Accumulated depreciation and reserve 1,100,000 14,435,871
- --------------------------------------------------------------------------------------
13,246,567 -
- --------------------------------------------------------------------------------------
$15,149,288 1,627,746
======================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 1,196,125 1,407,893
Accrued expenses 246,782 191,805
- --------------------------------------------------------------------------------------
Total liabilities 1,442,907 1,599,698
- --------------------------------------------------------------------------------------
Stockholders' Equity
Common stock, $0.01 par value; authorized 3,000 shares,
issued and outstanding 700 shares 7 7
Additional paid-in-capital 18,865,179 21,112,935
Accumulated deficit (5,158,805) (21,084,894)
- --------------------------------------------------------------------------------------
13,706,381 28,048
- --------------------------------------------------------------------------------------
$15,149,288 1,627,746
======================================================================================
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
BIRD ENVIRONMENTAL GULF COAST, INC.
Statement of Operations
Year ended December 31, 1994 and eleven months ended November 30, 1995
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
1994 1995
- --------------------------------------------------------------------------------------
<S> <C> <C>
Net sales $ 3,714,583 2,858,370
Cost of sales 6,221,892 5,491,560
- --------------------------------------------------------------------------------------
Gross loss (2,507,309) (2,633,190)
Selling, general and administrative expenses 1,053,723 1,124,153
Reserve with respect to property, plant and equipment - 12,168,746
- --------------------------------------------------------------------------------------
Net loss $(3,561,032) (15,926,089)
======================================================================================
</TABLE>
See accompanying notes to financial statements.
7
<PAGE>
BIRD ENVIRONMENTAL GULF COAST, INC.
Statement of Stockholders' Equity
Year ended December 31, 1994 and eleven months ended November 30, 1995
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Additional
Common paid-in Accumulated
stock capital deficit Total
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance at December 31, 1993 $ 7 5,755,817 (1,597,773) 4,158,051
Capital contribution by Bird
Environmental Technologies, Inc. - 13,109,362 - 13,109,362
Net loss - - (3,561,032) (3,561,032)
- --------------------------------------------------------------------------------------
Balance, December 31, 1994 7 18,865,179 (5,158,805) 13,706,381
Capital contribution by Bird
Environmental Technologies, Inc. - 2,247,756 - 2,247,756
Net loss - - (15,926,089) (15,926,089)
- --------------------------------------------------------------------------------------
Balance, November 30, 1995 $ 7 21,112,935 (21,084,894) 28,048
======================================================================================
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
BIRD ENVIRONMENTAL GULF COAST, INC.
Statement of Cash Flows
Year ended December 31, 1994 and eleven months ended November 30, 1995
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
1994 1995
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (3,561,032) (15,926,089)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation and amortization 1,100,000 1,167,125
Reserve with respect to property, plant and equipment - 12,168,746
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable (1,377,342) 1,377,342
(Increase) decrease in inventories (15,951) 14,910
Decrease in prepaid expenses 143,347 41,900
Increase in accounts payable 1,196,125 211,768
Increase (decrease) in accrued expenses 246,782 (54,977)
- ---------------------------------------------------------------------------------------------
Net cash used by operating activities (2,268,071) (999,275)
- ---------------------------------------------------------------------------------------------
Cash flow from investing activities:
Additions to property, plant and equipment (10,375,563) (89,304)
Increase in closure bond (316,224) (10,465)
- ---------------------------------------------------------------------------------------------
Net cash used by investing activities (10,691,787) (99,769)
- ---------------------------------------------------------------------------------------------
Cash provided by financing activities - Capital contributions
by Bird Environmental Technologies, Inc. 13,109,362 2,247,756
- ---------------------------------------------------------------------------------------------
Net increase in cash 149,504 1,148,712
Cash at beginning of period - 149,504
- ---------------------------------------------------------------------------------------------
Cash at end of period $ 149,504 1,298,216
=============================================================================================
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
BIRD ENVIRONMENTAL GULF COAST, INC.
Notes to Financial Statements
December 31, 1994 and November 30, 1995
- --------------------------------------------------------------------------------
(1) NATURE OF BUSINESS AND ACQUISITION BY GTS DURATEK, INC.
Bird Environmental Gulf Coast, Inc. (the "Company") owns and operates a
hazardous waste recycling facility using thermal desorption technology in
San Leon, Texas. As of November 30, 1995 the Company has suspended
operations pending completion of certain capital improvements which are
intended to enable the facility to operate at peak efficiency. The
facility is expected to be operational by April 1996. The Company's
customers are principally engaged in the petro chemical industry.
On November 29, 1995, GTS Duratek, Inc. acquired 80% of the outstanding
common stock of the Company from Bird Environmental Technologies, Inc.,
a wholly-owned subsidiary of Bird Corporation.
The remaining 20% of the outstanding capital stock of the Company is owned
by certain individuals (the "Minority Shareholders") who developed the
technology and have operated and will continue to operate the facility.
The Minority Shareholders have entered into employment agreements
providing for incentive compensation tied directly to the financial
performance of the facility. GTS Duratek, Inc. has entered into a
stockholders' agreement with the Minority Shareholders pursuant to which,
among other terms and conditions, it agreed to invest up to $5.1 million
in the Company as needed, up to $2.4 million of which will be used for
general working capital purposes and up to $2.7 million of which will be
used for capital and plant start-up expenditures.
As part of the acquisition transaction, GTS Duratek, Inc. also acquired
through a licensing arrangement with one of the Minority Shareholders
the exclusive worldwide rights to the patented technology used by the
Company's facility to process and treat hazardous waste.
Effective December 12, 1995, the Company changed its name to
DuraTherm, Inc.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES
INVENTORIES
Inventories, principally consisting of supplies used in the recycling
process, are stated at the lower of cost or market. Cost is determined
using the first-in, first-out method.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost. Depreciation on plant
and equipment is calculated on the straight-line method over the
estimated useful lives of the assets, which range from five to fifteen
years.
On November 29, 1995, the Company has recorded a reserve for the
property, plant and equipment to reflect the "push down" of Bird
Corporation's adjusted sales prices to GTS Duratek, Inc.
(Continued)
10
<PAGE>
BIRD ENVIRONMENTAL GULF COAST, INC.
Notes to Financial Statements
- --------------------------------------------------------------------------------
(2) CONTINUED
INCOME TAXES
Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective
tax bases and operating loss and tax credit carryforwards. Deferred tax
assets and liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary differences
are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income
in the period that includes the enactment date.
USE OF ESTIMATES
Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure
of liabilities to prepare these financial statements in conformity with
generally accepted accounting principles. Actual results could differ
from those estimates.
(3) CLOSURE BOND
The Company is required under State of Texas Civil Statue to fund, in the
form of a closure bond, $1,936,619 over a ten year period. The funding
is maintained in an interest bearing trust account, in the Company's
name, and will be eventually used to cover closure expenses of the
thermal desorption facility, when and if required. As of December 31,
1994 and November 30, 1995, the trust balance was $316,224 and $326,689,
respectively.
(4) INCOME TAXES
During the year ended December 31, 1994 and eleven months ended
November 30, 1995, the Company had net operating losses. As a result of
the acquisition of 80% of the Company's common stock by GTS Duratek, Inc.
any net operating loss carryforwards at November 30, 1995 will not be
available to reduce future taxable income of the Company.
(Continued)
11
<PAGE>
BIRD ENVIRONMENTAL GULF COAST, INC.
Notes to Financial Statements
- --------------------------------------------------------------------------------
(5) COMMITMENTS AND CONTINGENCIES
The Company is a defendant in a number of legal matters certain of which
Bird Corporation has agreed to indemnify the Company and GTS Duratek, Inc.
Of the matters for which the Company is not indemnified, none are expected
to have any material adverse effect on the financial condition of the
Company.
In connection with the Company's acquisition by GTS Duratek, Inc. four of
the Company principal employees entered into four year employment
agreements which generally can be terminated without cause upon payment
of one year of severance. The agreements also provide for bonuses in
excess of base compensation in the event the Company achieves certain
levels of earnings over the period of the employment agreements.
- --------------------------------------------------------------------------------
12
<PAGE>
GTS DURATEK, INC. AND SUBSIDIARIES
PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
The pro forma financial information should be read in conjunction with
the consolidated financial statements and related notes of GTS Duratek, Inc.
and subsidiaries (the "Company"), not included herein, and the financial
statements of Bird Environmental Gulf Coast, Inc. ("DuraTherm"), included
elsewhere herein.
PRO FORMA CONSOLIDATED BALANCE SHEET
The pro forma consolidated balance sheet reflects the accounts of the
Company giving effect to the acquisition of DuraTherm as if it occurred on
September 30, 1995. The pro forma consolidated balance sheet was prepared
using the Company's and DuraTherm's balance sheets as of September 30, 1995.
The acquisition occurred on November 29, 1995 and will be based on amounts as
of that date.
On November 29, 1995 the Company acquired 80% of the outstanding capital
stock of DuraTherm from Bird Environmental Technologies, Inc., a wholly-owned
subsidiary of Bird Corporation ("Bird") for $1 and incurred approximately
$350,000 of transaction costs. DuraTherm owns and operates a hazardous waste
facility using thermal desorption technology in San Leon, Texas. In
connection with the acquisition, Bird agreed to contribute approximately $1.3
million of cash to DuraTherm immediately prior to the acquisition to fund
DuraTherm's working capital deficit. The remaining 20% of the outstanding
capital stock of the Company is held by certain individuals (the "Minority
Shareholders") who developed the technology and have operated and will
continue to operate the facility. The Minority Shareholders have entered
into employment agreements providing for incentive compensation tied directly
to the financial performance of the facility. The Company has entered into a
stockholders' agreement pursuant to which, among other terms and conditions,
the Company has agreed to invest up to $5.1 million in DuraTherm in exchange
for preferred stock of DuraTherm. Of the $5.1 million, up to $2.4 million
will be used for working capital purposes and the balance, of up to $2.7
million, will be used for capital and plant start-up expenditures. The
Company expects to make the capital investments needed by DuraTherm during
the fourth quarter of 1995 and the first quarter of 1996 and expects the
plant to reopen during the second quarter of 1996. The Company will use its
internal funds for the investment in DuraTherm. As part of the purchase
transaction the Company also acquired through a licensing arrangement the
exclusive worldwide rights to the thermal desorption technology used by the
facility. The acquisition of DuraTherm will be accounted using the purchase
method of accounting.
The aggregate purchase price for the 80% interest in DuraTherm is as
follows:
Cash purchase price $ 1
Transaction cost 349,999
----------
Purchase price $ 350,000
==========
The estimated fair value of 80% of the net tangible assets of DuraTherm
at the date of the acquisition exceeded the purchase price by approximately
$10 million. Such amount will reduce the carrying value of property, plant
and equipment in consolidation. The Company has determined the amount of the
minority interest of the subsidiary based upon the 20% of the net assets of
DuraTherm at September 30, 1995. The final purchase price allocation will be
affected by the levels of transaction costs and net assets acquired. Such
amounts are not expected to be materially different from the pro forma
presentation.
13
<PAGE>
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
The pro forma consolidated statements of operations for the year ended
December 31, 1994 and the nine months ended September 30, 1995 give effect to
the Company's acquisition of DuraTherm as if the transaction had occurred on
January 1, 1994. Depreciation and amortization amounts have been adjusted
assuming the $2.7 million of capital improvements had been made as of January
1, 1994 and the plant was operational on that date.
The plant was placed into operation in February 1994 and ceased
operations in August 1995. As such, the plant was not fully operational for
either of the pro forma periods presented. The pro forma consolidated
statements of operations may not be indicative of the actual results that
would have occurred had the capital improvements actually been made by
January 1994 or had the plant operated during the entire pro forma periods
presented or of future consolidated results of operation of the Company with
DuraTherm under management and control of the Company's personnel.
14
<PAGE>
GTS Duratek, Inc.
PRO FORMA CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PURCHASE PRO FORMA
COMPANY DURATHERM ADJUSTMENTS COMBINED
------- --------- ----------- ---------
<S> <C> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 2,724,375 $ 1,541 $1,058,744 (1) $ 3,784,660
Accounts receivable, net 6,978,179 97,303 - 7,075,482
Costs and estimated earnings in excess of billings
on uncomplete contracts 7,709,662 - - 7,709,662
Inventories 289,487 - - 289,487
Prepaid expenses and other current assets 263,841 1,800 - 265,641
-------------------------------------------------------------
TOTAL CURRENT ASSETS 17,965,544 100,644 1,058,744 19,124,932
-------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT, NET 2,016,316 - 327,562 (2) 2,343,878
INTANGIBLES, NET 561,682 - - 561,682
INVESTMENTS IN AND ADVANCES TO JOINT VENTURES, NET 3,902,798 - - 3,902,798
DEFERRED CHARGES AND OTHER ASSETS 964,564 326,689 - 1,291,253
-------------------------------------------------------------
$25,410,904 $ 427,333 $1,386,306 $27,224,543
=============================================================
CURRENT LIABILITIES:
Current maturities of long-term debt $ 635,073 $ - $ - $ 635,073
Accounts payable and accrued expenses 2,572,924 1,458,029 350,000 (2) 4,380,953
-------------------------------------------------------------
TOTAL CURRENT LIABILITIES 3,207,997 1,458,029 350,000 5,016,026
-------------------------------------------------------------
LONG-TERM DEBT 48,409 - - 48,409
-------------------------------------------------------------
TOTAL LIABILITIES 3,256,406 1,458,029 350,000 5,064,435
-------------------------------------------------------------
MINORITY INTEREST OF SUBSIDIARY - - 5,610 (2) 5,610
-------------------------------------------------------------
REDEEMABLE CONVERTIBLE PREFERRED STOCK 14,554,384 - - 14,554,384
-------------------------------------------------------------
STOCKHOLDERS' EQUITY:
Net stockholders' equity of DuraTherm - (1,030,696) 1,058,744 (1) -
(28,048)(2)
Common Stock 88,784 - - 88,784
Capital in excess of par value 17,188,093 - - 17,188,093
Deficit (9,504,986) - - (9,504,986)
Treasury stock, at cost (171,777) - - (171,777)
-------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY 7,600,114 (1,030,696) 1,030,696 7,600,114
-------------------------------------------------------------
$25,410,904 $427,333 $1,386,306 $27,224,543
=============================================================
</TABLE>
NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET:
(1) To record capital contribution by Bird Corporation as required by
acquisition agreement, adjusted for expenses incurred between
September 30, 1995 and closing.
(2) To record purchase accounting adjustments with respect to the acquisition
of DuraTherm, including recognition of minority interest based upon 20%
of the net assets of DuraTherm at the date of the acquisition.
15
<PAGE>
GTS DURATEK, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1994
(UNAUDITED)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
COMPANY DURATHERM ADJUSTMENTS COMBINED
------- --------- ----------- ---------
<S> <C> <C> <C> <C>
REVENUES $35,967,563 $ 3,714,583 $ - $39,682,146
COST OF REVENUES 28,856,910 6,186,786 (797,000)(1) 34,246,696
----------------------------------------------------------
GROSS PROFIT (LOSS) 7,110,653 (2,472,203) 797,000 5,435,450
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 5,825,618 1,088,829 - 6,914,447
ROYALTIES PAID TO RELATED PARTIES 100,000 - - 100,000
----------------------------------------------------------
OPERATING EARNINGS (LOSS) 1,185,035 (3,561,032) 797,000 (1,578,997)
INTEREST INCOME (EXPENSE), NET (595,475) - - (595,475)
----------------------------------------------------------
EARNINGS (LOSS) BEFORE INCOME TAXES 589,560 (3,561,032) 797,000 (2,174,472)
INCOME TAX EXPENSE (BENEFIT) 11,487 - - 11,487
----------------------------------------------------------
NET EARNINGS (LOSS) BEFORE MINORITY INTEREST
AND PROPORTIONATE SHARE OF LOSS OF JOINT
VENTURE 578,073 (3,561,032) 797,000 (2,185,959)
PROPORTIONATE SHARE OF LOSS OF JOINT VENTURE (321,548) - - (321,548)
----------------------------------------------------------
NET EARNINGS (LOSS) $ 256,525 $(3,561,032) $ 797,000 $(2,507,507)
==========================================================
EARNINGS (LOSS) PER COMMON SHARE $ 0.03 ($0.29)
=========== ============
WEIGHTED AVERAGE SHARES 8,966,795 310,984 (3) 8,655,811
=========== ============= ============
</TABLE>
NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS:
(1) To adjust depreciation and amortization expense as follows:
Eliminate depreciation included in DuraTherm amounts ($1,100,000)
Adjusted depreciation for plant and equipment over 10 years 33,000
Depreciation of additional $2.7 million of plant and
equipment over 10 years 270,000
-----------
($797,000)
===========
(2) To record minority interest of DuraTherm
(3) To adjust weighted average outstanding shares for common stock equivalents
deemed to be anti-dilutive
16
<PAGE>
GTS DURATEK, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
COMPANY DURATHERM ADJUSTMENTS COMBINED
------- --------- ----------- ---------
<S> <C> <C> <C> <C>
REVENUES $28,947,692 $ 2,847,730 $ - $31,795,422
COST OF REVENUES 23,397,469 4,983,725 (756,599)(1) 27,624,595
-----------------------------------------------------------
GROSS PROFIT 5,550,223 (2,135,995) 756,599 4,170,827
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 4,077,433 965,903 - 5,043,336
ROYALTIES PAID TO RELATED PARTIES 75,000 - - 75,000
-----------------------------------------------------------
RESERVE WITH RESPECT TO PROPERTY, PLANT
AND EQUIPMENT - (12,168,746) 12,168,746 (2) -
OPERATING EARNINGS (LOSS) 1,397,790 (15,270,644) 756,599 (947,509)
INTEREST INCOME (EXPENSE), NET 73,124 - - 73,124
-----------------------------------------------------------
EARNINGS (LOSS) BEFORE INCOME TAXES 1,470,914 (15,270,644) 756,599 (874,385)
INCOME TAX EXPENSE (BENEFIT) 147,113 - - 147,113
-----------------------------------------------------------
NET EARNINGS (LOSS) BEFORE MINORITY INTEREST
AND PROPORTIONATE SHARE OF LOSS OF JOINT
VENTURE 1,323,801 (15,270,644) 756,599 (1,021,498)
PROPORTIONATE SHARE OF LOSS OF JOINT VENTURE (170,225) - - (170,225)
-----------------------------------------------------------
NET EARNINGS (LOSS) $ 1,153,576 $(15,270,644) $ 756,599 $(1,191,723)
===========================================================
EARNINGS (LOSS) PER COMMON SHARE $0.02 ($0.25)
=========== ============
WEIGHTED AVERAGE SHARES 8,731,551 8,731,551
=========== ============
</TABLE>
NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS:
(1) To adjust depreciation and amortization expense as follows:
Eliminate depreciation included in DuraTherm amounts ($959,099)
Adjusted depreciation for plant and equipment over 10 years 24,750
Depreciation of additional $2.7 million of plant and
equipment over 10 years 202,500
----------
($756,599)
==========
(2) To eliminate charge included in DuraTherm accounts as basis of assets is
adjusted in consolidation.
17
<PAGE>
EXHIBIT INDEX
Exhibit Description Page No.
- ------- ----------- --------
(c)(1) Press Release of GTS Duratek, Inc. dated November 30, 1995. *
(c)(2) 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. *
(c)(3) 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. *
(c)(4) Technology License Agreement by and among GTS Duratek, Inc.,
Bird Environmental Gulf Coast, Inc. and Jim S. Hogan dated
November 29, 1995. *
(c)(5) Consent of Independent Certified Public Accountants 19
*Previously filed.
18
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
Bird Environmental Gulf Coast, Inc.:
We consent to the inclusion of our report dated January 20, 1996, with
respect to the balance sheets of Bird Environmental Gulf Coast, Inc. as of
December 31, 1994 and November 30, 1995, and the related statements of
operations, stockholders' equity, and cash flows for year ended December 31,
1994 and the eleven months ended November 30, 1995, which report appears in
the Form 8-K/A of GTS Duratek, Inc. dated November 29, 1995.
KPMG PEAT MARWICK LLP
Baltimore, Maryland
February 7, 1996
19
