<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 June 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 Identification No.)
incorporation or organization)
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 August 1, 1996:
Common Stock, par value $0.01 per share 12,448,243 shares
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GTS DURATEK, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
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<TABLE>
<CAPTION>
PAGE
----
Part I Financial Information
- ------
<S> <C> <C>
Item 1. Financial Statements
Consolidated Condensed Balance Sheets
as of June 30, 1996 and December 31, 1995.................. 1
Consolidated Condensed Statements of Operations
for the Three and Six Months Ended June 30, 1996 and 1995.. 2
Consolidated Condensed Statement of Changes in Stockholders'
Equity for the Six Months Ended June 30, 1996.............. 3
Consolidated Condensed Statements of Cash Flows
for the Six Months Ended June 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 4. Submission of Matters to a Vote of Security Holders........... 10
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>
June 30, December 31,
1996 1995
----------- -------------
ASSETS (unaudited) *
<S> <C> <C>
Current assets:
Cash and cash equivalents........................ $49,495,188 $11,396,008
Receivables, net................................. 8,420,301 9,321,513
Costs and estimated earnings in excess of
billings on uncompleted contracts.............. 9,721,705 7,707,434
Inventories...................................... 279,165 274,859
Prepaid expenses and other current assets........ 523,042 79,686
----------- -----------
Total current assets.......................... 68,439,401 28,779,500
----------- -----------
Property, plant and equipment, net................ 6,998,743 3,541,462
Investments in and advances to joint venture, net. 5,148,356 4,059,078
Intangibles, net.................................. 508,404 553,517
Deferred charges and other assets................. 1,593,018 1,726,270
----------- -----------
$82,687,922 $38,659,827
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt
and obligations under capital leases............ $ 53,996 $ 470,709
Accounts payable and accrued expenses............ 3,694,623 4,194,713
----------- -----------
Total current liabilities..................... 3,748,619 4,665,422
Long-term debt and obligations under capital lease 234,290 36,000
Convertible debenture............................. 10,372,181 10,086,931
----------- -----------
Total liabilities............................. 14,355,090 14,788,353
----------- -----------
Minority interest of subsidiary................... - 5,610
----------- -----------
Redeemable convertible preferred stock
(Liquidation value $16,320,000).................. 14,718,517 14,608,890
----------- -----------
Stockholders' equity:
Common stock..................................... 123,364 94,758
Capital in excess of par value................... 62,974,273 18,912,751
Deficit.......................................... (9,311,545) (9,578,758)
Treasury stock, at cost.......................... (171,777) (171,777)
----------- -----------
Total stockholders' equity..................... 53,614,315 9,256,974
----------- -----------
$82,687,922 $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 Six Months
Ended June 30, Ended June 30,
-------------- --------------
1996 1995 1996 1995
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues.............................. $11,645,105 $9,985,641 $21,981,340 $19,521,393
Cost of revenues...................... 9,176,745 8,139,966 16,781,929 15,918,977
----------- ---------- ----------- -----------
Gross profit.......................... 2,468,360 1,845,675 5,199,411 3,602,416
Selling, general and
administrative expenses............. 2,064,712 1,397,890 3,995,392 2,725,429
----------- ---------- ----------- -----------
Income from operations................ 403,648 447,785 1,204,019 876,987
Interest income, net.................. 308,834 42,630 265,007 25,915
----------- ---------- ----------- -----------
Income before income taxes and
proportionate share of loss of
joint venture....................... 712,482 490,415 1,469,026 902,902
Income taxes.......................... 156,527 48,966 366,788 90,215
----------- ---------- ----------- -----------
Income before proportionate share of
loss of joint venture............... 555,955 441,449 1,102,238 812,687
Proportionate share of loss of joint
venture............................. (39,564) (53,378) (85,398) (132,310)
----------- ---------- ----------- -----------
Net income............................ $ 516,391 $ 388,071 $ 1,016,840 $ 680,377
=========== ========== =========== ===========
Net income per share.................. $ .01 $ .00 $ .02 $ .00
=========== ========== =========== ===========
Weighted number of common shares
outstanding and common stock
equivalents......................... 14,183,281 8,720,797 13,116,116 8,705,144
=========== ========== =========== ===========
</TABLE>
2
<PAGE>
GTS DURATEK, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Six Months Ended June 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 1,016,840 1,016,840
Preferred dividends (640,000) (640,000)
Exercise of options and
warrants 360,583 3,606 933,412 937,018
Accretion of redeemable
preferred stock (109,627) (109,627)
Issuance of common stock
in exchange for cash 2,500,000 25,000 43,128,110 43,153,110
---------- -------- ----------- ----------- --------- -----------
Balance, June 30, 1996 12,336,461 $123,364 $62,974,273 $(9,311,545) $(171,777) $53,614,315
========== ======== =========== =========== ========= ===========
</TABLE>
3
<PAGE>
GTS DURATEK, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six months ended June 30,
--------------------------
1996 1995
------------ ------------
<S> <C> <C>
Cash flows from operations:
Net income......................................... $ 1,016,840 $ 680,377
Adjustments to reconcile net income to
net cash used in operating activities:
Depreciation and amortization.................... 235,373 302,692
Accured interest on convertible debenture........ 285,250 -
Proportionate share of loss of joint venture..... 85,398 132,310
Changes in operating items:
Receivables.................................... 655,666 (18,796)
Cost in excess of billings..................... (2,014,271) (161,118)
Inventories.................................... (4,306) 37,001
Accounts payables and accrued expenses......... (574,392) (1,098,452)
Other operating items.......................... (440,903) (79,276)
----------- -----------
Net cash used in operating activities........ (755,345) (205,262)
----------- -----------
Cash flows from investing activities:
Additions to property, plant and equipment, net . (3,113,317) (179,361)
Advances to joint venture........................ (1,174,676) (957,955)
Acquistion of Analytical Resources, Inc.,
net of cash acquired............................ (278,446) -
Other............................................ 475,889 (17,777)
----------- -----------
Net cash used in investing activities........ (4,090,550) (1,155,093)
----------- -----------
Cash flows from financing activities:
Net repayment of short-term borrowings........... - (7,630,512)
Reduction of long-term debt and capital lease
obligations..................................... (505,053) (350,686)
Proceeds from issuance of common stock........... 44,090,128 124,240
Proceeds from issuance of redeemable preferred
stock........................................... - 14,410,027
Payment of preferred stock dividends............. (640,000) (235,200)
Proceeds from issuance of stock option........... - 280,000
Other............................................ -
----------- -----------
Net cash provided by financing activities...... 42,945,075 6,597,869
----------- -----------
Net change in cash and cash equivalents............ 38,099,180
Cash and cash equivalents at beginning of period. 11,396,008 -
----------- -----------
Cash and cash equivalents at end of period....... $49,495,188 $ 5,237,514
----------- -----------
Cash paid for:
Interest......................................... $ 27,976 $ 136,129
=========== ===========
Income taxes..................................... $ 252,040 $ 9,741
=========== ===========
Supplemental cash flow information:
Equipment acquired under capital lease arrangment $ 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>
June 30, December 31,
1996 1995
-------- ------------
<S> <C> <C>
Raw materials..................... $ 42,759 $ 36,256
Finished goods.................... 236,406 238,603
-------- --------
$279,165 $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 pubic 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 six months ended June 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 six months ended June 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 June 30, 1995 Compared to Three Months Ended June 30, 1996.
Revenues increased by $1.7 million or 16.6% from $9.9 million in 1995 to
$11.6 million in 1996. The increase was primarily attributable to $1.1 million
in revenues from the DuraTherm commercial waste treatment facility which
commenced operations May 1, 1996, and a $800,000 increase in technical support
services revenues. The increase in revenues in technical support services was
the result of more power plant outages being scheduled in the second quarter of
1996 as compared to the same period in 1995. Revenues from waste treatment
projects decreased $200,000 from 1995 to 1996. The most significant waste
treatment project is the Savannah River M-Area project. Under this three-year
$14.1 million contract, the Company has constructed a vitrification facility at
the Savannah River site in South Carolina to convert approximately 90,000 cubic
feet of mixed waste to stable glass. Revenues from this contract were $1.5
million for the second quarter of 1996 as compared to $1.3 million for the same
period in 1995.
Gross profit increased by $600,000 or 33.7% from $1.8 million in 1995 to
$2.4 million in 1996. Approximately $250,000 of the increase in gross profit
was attributable to the DuraTherm facility mentioned above and the remainder of
the increase was the result of higher gross profits achieved on DOE waste
treatment projects. Gross profits from technical support services remained
stable from 1995 to 1996. As a percentage of revenues, gross profit increased
from 18.5% in 1995 to 21.2% in 1996. The increase resulted from higher gross
profits achieved on waste treatment projects which generally have a higher gross
profit than technical support services.
Selling, general and administrative expenses increased by $700,000 or 47.7%
from $1.4 million in 1995 to $2.1 million in 1996. As a percentage of revenues,
selling general and administrative expenses increased from 14.0% in 1995 to
17.7% in 1996. The increase was principally the result of higher operating
costs for DOE waste treatment projects, costs incurred to develop and expand
this business, and operating costs for the DuraTherm facility which began
operations May 1, 1996.
Interest income, net increased by approximately $270,000 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
Six Months Ended June 30, 1995 Compared to Six Months Ended June 30, 1996.
Revenues increased by $2.5 million or 12.6% from $19.5 million in 1995 to
$22.0 million in 1996. The increase was primarily attributable to an increase
in revenues from DOE and commercial waste treatment projects of $1.9 million and
a teaming fee of $1.0 million, partially offset by a decrease in technical
support services of $400,000. The increase in revenues include $1.1 million
from the DuraTherm commercial waste treatment facility mentioned above and a
$1.0 million teaming fee received from BNFL in exchange for the Company's
agreement to exclusively team with BNFL on a DOE waste treatment project in
Idaho. The decline in revenues in technical support services was the result of
reduced demand for training and consulting services to commercial nuclear power
plants as compared to the same period in 1995.
Gross profit increased by $1.6 million or 44.3% from $3.6 million in 1995
to $5.2 million in 1996. The teaming fee from BNFL represented approximately
$1.0 million of the increase. The remaining $600,000 of the increase was the
result of an increase in gross profit from DOE and commercial waste treatment
projects. As a percentage of revenues, gross profit increased from 18.5% in
1995 to 23.7% in 1996. The gross profit percentage from waste treatment
projects was lower in 1995 as compared to 1996 principally as a result of the
Company's project mix. The gross profit percentage from technical support
services was comparable from 1995 to 1996.
Selling, general and administrative expenses increased by $1.3 million or
46.6% from $2.7 million in 1995 to $4.0 million in 1996. As a percentage of
revenues, selling, general and administrative expenses increased from 14.0% in
1995 to 18.2% 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 $240,000 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 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 pubic 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.
During the six months ended June 30, 1996, The Company used $4.1 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 June 30, 1996, no borrowings were outstanding.
The Company believes cash flows from operations, cash resources at June 30,
1996, including 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.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
GTS DURATEK, INC. AND SUBSIDIARIES
Other items
Costs and estimated earnings in excess of billings on uncompleted contracts
were $9.7 million and $7.7 million at June 30, 1996 and December 31, 1995,
respectively. The increase of $2.0 million for the six 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 4. Submission of Matters to a Vote of Security Holders
At a special meeting of stockholders held on April 16, 1996, the
proposal to approve an amendment to the Company's Certificate of Incorporation
to increase the number of authorized Common Stock of the Company was adopted by
a vote of 6,470,890 for and 99,682 against this proposal.
At the Annual Meeting of Stockholders held on May 15, 1996 the following
matters were voted upon.
a. Daniel A. D'Aniello, William E. Conway, Jr., Earle C. Williams
and Steven J. Gilbert were elected to serve as directors of the Company by the
preferred stockholders for a one-year term. Jerome I. Feldman, Martin M.
Pollak, and Robert E. Prince were elected to serve as directors of the Company
for a one-year term by the Common Stockholders.
b. The proposal to approve the amendments to the Company's Stock
Option Plan was adopted by a vote of 6,245,666 for, and 480,185 against this
proposal.
c. The proposal to reappoint KPMG Peat Marwick LLP as auditors was
adopted by a vote of 8,547,627 for, and 34,991 against this proposal.
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 first half of 1996. Net income in 1995 and
the first half of 1996 was also significantly greater than in 1995 and the first
half of 1995, respectively. 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
June 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: August 6, 1996 BY: /s/ Robert F. Shawver
----------------------------
Robert F. Shawver
Executive Vice President and
Chief Financial Officer
Dated: August 6, 1996 BY: /s/ Craig T. Bartlett
-----------------------------
Craig T. Bartlett
Controller and Principal
Accounting Officer
12
<PAGE>
Exhibit Index
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 Designation 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)
E-1
<PAGE>
10.4 License Agreement dated as of August 17, 1992 between GTS Duratek, Inc.
and Dr. Theodore Aaron Litovitz and Dr. Pedro Buarqua 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 Registrants 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).
E-2
<PAGE>
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 six months ended June 30, 1996.
(filed herewith)
27 Financial Data Schedule. (filed herewith)
E-3
<PAGE>
Exhibit 11.1
GTS DURATEK, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30 Ended June 30
------------- -------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Primary:
Earnings applicable to common stock $ 516,391 $ 388,071 $ 1,016,840 $ 680,377
Accrued dividend on preferred stock (320,000) (320,000) (640,000) (555,200)
Accretion of redeemable preferred stock (54,915) (54,432) (109,627) (90,055)
---------- --------- ---------- ---------
Net earnings applicable to common stock $ 141,476 $ 13,639 $ 267,213 $ 35,122
========= ========= =========== =========
Average common shares outstanding 11,630,115 8,720,797 10,575,963 8,705,144
Dilutive effect of stock options
and warrants 2,553,166 N/A 2,524,066 N/A
---------- --------- ---------- ---------
Weighted average common shares
outstanding 14,183,281 8,720,797 13,100,029 8,705,144
========== ========= ========== =========
Earnings per common share $ .01 $ 0.00 $ .02 $ 0.00
========== ========= ========== =========
Fully Diluted:
Earnings applicable to common stock $ 516,391 $ 1,016,840
Accrued dividend on preferred stock (320,000) (640,000)
Accretion of redeemable preferred stock (54,915) (109,627)
---------- ----------
Net earnings applicable to common stock $ 141,476 $ 267,213
========== ==========
Average common shares outstanding 11,630,115 10,575,963
Dilutive effect of stock options
and warrants 2,553,166 2,540,153
---------- ----------
Weighted average common shares
outstanding 14,183,281 13,116,116
========== ==========
Earnings per common share $ .01 $ .02
========== ==========
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED CONDENSED BALANCE SHEET AS OF JUNE 30, 1996 (UNAUDITED) AND THE
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30,
1996 (UNAUDITED) AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 49,495,188
<SECURITIES> 0
<RECEIVABLES> 18,228,970
<ALLOWANCES> (86,964)
<INVENTORY> 279,165
<CURRENT-ASSETS> 68,439,401
<PP&E> 11,263,912
<DEPRECIATION> (4,263,912)
<TOTAL-ASSETS> 82,687,922
<CURRENT-LIABILITIES> 3,748,619
<BONDS> 10,606,471
14,718,517
0
<COMMON> 123,364
<OTHER-SE> 53,490,951
<TOTAL-LIABILITY-AND-EQUITY> 82,687,922
<SALES> 0
<TOTAL-REVENUES> 21,981,340
<CGS> 0
<TOTAL-COSTS> 16,781,929
<OTHER-EXPENSES> 3,985,392
<LOSS-PROVISION> 10,000
<INTEREST-EXPENSE> (265,007)
<INCOME-PRETAX> 1,469,026
<INCOME-TAX> 366,788
<INCOME-CONTINUING> 1,016,840
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,016,840
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
