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 March 31, 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 May 6, 1996:
Common Stock, par value $0.01 per share 12,357,673 shares
<PAGE>
GTS DURATEK, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
Part I Financial Information Page
Item 1. Financial Statements
Consolidated Condensed Balance Sheets
as of March 31, 1996 and December 31,1995....................... 1
Consolidated Condensed Statements of Operations for the
Three Months Ended March 31, 1996 and 1995................ 2
Consolidated Condensed Statement of Changes in Stockholders'
Equity for the Three Months Ended March 31, 1996................ 3
Consolidated Condensed Statements of Cash Flows for the
Three Months Ended March 31, 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................... 8
Part II Other Information
Item 5. Other Information................................................. 9
Item 6. Exhibits and Reports on Form 8-K.................................. 9
Signatures........................................................ 10
<PAGE>
Part I Financial Information
Item 1. Financial Statements
GTS DURATEK, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
March 31 December 31
1996 1995
---- ----
ASSETS (unaudited) *
<S> <C> <C>
Current assets:
Cash and cash equivalents....................... $ 7,140,946 $11,396,008
Receivables,net................................. 9,705,094 9,321,513
Costs and estimated earnings in excess of
billings on uncompleted contracts............. 8,316,428 7,707,434
Inventories..................................... 284,949 274,859
Prepaid expenses and other current assets....... 535,287 79,686
------- ------
Total current assets......................... 25,982,704 28,779,500
Property, plant and equipment, net................ 5,933,619 3,541,462
Investments in and advances to joint ventures, net 4,438,700 4,059,078
Intangibles, net.................................. 530,920 553,517
Deferred charges and other assets................. 2,091,287 1,726,270
--------- ---------
$38,977,230 $38,659,827
=========== ===========
</TABLE>
<TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C>
Current liabilities:
Current maturities of long-term debt
and obligations under capital leases........... $ 371,151 $ 470,709
Accounts payable and accrued expenses......... 3,558,338 4,194,713
--------- ---------
Total current liabilities...................... 3,929,489 4,665,422
Long-term debt and obligations under capital
leases........................................... 271,703 36,000
Convertible debenture............................. 10,230,747 10,086,931
---------- ----------
Total liabilities............................. 14,431,939 14,788,353
---------- ----------
Minority interest of subsidiary................... - 5,610
---------- ----------
Redeemable preferred stock
(Liquidation value $16,320,000).................. 14,663,601 14,608,890
---------- ----------
Stockholders' equity:
Common stock..................................... 96,513 94,758
Capital in excess of par value.................. 19,409,975 18,912,751
Deficit.......................................... (9,453,021) (9,578,758)
Treasury stock, at cost.......................... (171,777) (171,777)
-------- --------
Total stockholders' equity..................... 9,881,690 9,256,974
--------- ---------
$38,977,230 $38,659,827
=========== ===========
* 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.
</TABLE>
<PAGE>
<TABLE>
GTS DURATEK, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended March 31,
1996 1995
<S> <C> <C>
Revenues....................................... $10,336,235 $ 9,535,752
Cost of revenues............................... 7,605,184 7,779,011
--------- ---------
Gross profit................................... 2,731,051 1,756,741
Selling, general and administrative expenses... 1,930,680 1,327,539
--------- ---------
Income from operations......................... 800,371 429,202
Interest expense, net.......................... 43,827 16,715
------ ------
Income before income taxes and proportionate
share of loss of joint venture................ 756,544 412,487
Income taxes................................... 210,261 41,249
------- ------
Income before proportionate share of
loss of joint venture........................ 546,283 371,238
Proportionate share of loss of joint venture... (45,834) (78,932)
------- -------
Net income..................................... $ 500,449 $ 292,306
========== =========
Net income per share........................... $ .01 $ .00
========== =========
Weighted number of common shares outstanding
and common stock equivalents................. 12,048,951 9,308,747
========== =========
</TABLE>
<PAGE>
GTS DURATEK, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Three Months Ended March 31, 1996
(Unaudited)
<TABLE>
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 500,449 500,449
Exercise of options and 175,450 1,755 497,224 498,979
warrants
Preferred dividends (320,000) (320,000)
Accretion of redeemable (54,712) (54,712)
preferred stock ------- ------- ------- ------- ------- -------
Balamce, March 31, 1996 9,651,328 $ 96,513 $19,409,975 $(9,453,021) $(171,777) $9,881,690
========= ======== =========== =========== ========= ==========
</TABLE>
<PAGE>
<TABLE>
GTS DURATEK, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended March 31,
1996 1995
<S> <C> <C>
Cash flows from operations:
Net income......................................... $ 500,449 $ 292,306
Adjustments to reconcile net income to
net cash provided (used) by operating activities:
Depreciation and amortization.................... 163,086 153,751
Proportionate share of loss of joint venture..... 45,834 78,932
Changes in operating items:
Receivables.................................... (630,208) (99,800)
Cost in excess of billings..................... (608,994) 1,695,245
Inventories.................................... (10,090) (7,779)
Accounts payables and accrued expenses......... (768,681) (1,896,602)
Other operating items.......................... (309,330) (128,412)
-------- --------
Net cash provided (used) by operations....... (1,617,934) 87,641
---------- ------
Cash flows from investing activities:
Additions to property, plant and equipment, net.. (2,106,955) (90,973)
Advances to joint ventures....................... (425,458) (449,537)
Acquisition of Anaytica Resources, Inc.,
net of cash acquired........................... (278,446) -
Other............................................ 107,418 (3,379)
------- ------
Net cash used by investing activities.......... (2,703,441) (543,889)
---------- --------
Cash flows from financing activities:
Net repayment of short-term borrowings........... - (7,630,512)
Reduction of long-term debt and capital
lease obligations.............................. (170,670) (175,343)
Proceeds from issuance of common stock........... 498,979 -
Proceeds from issuance of redeemable
preferred stock................................ - 14,425,526
Payment of preferred stock dividends............. (320,000) -
Proceeds from issuance of stock option........... - 280,000
Other............................................ 58,004 -
------ ---------
Net cash provided by financing activities...... 66,313 6,899,671
------ ---------
Net change in cash and cash equivalents............ (4,255,062) 6,443,423
Cash and cash equivalents at beginning of period... 11,396,008 -
---------- ----------
Cash and cash equivalens at end of period.......... $ 7,140,946 $ 6,443,423
----------- -----------
Cash paid for:
Interest......................................... $ 25,364 $ 98,923
=========== ===========
Income taxes..................................... $ 1,128 $ -
=========== =======
Supplememtal cash flow information:
Equipment acquired under capital lease
arrangement................................... $ 291,961 $ -
=========== =======
</TABLE>
<PAGE>
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>
March 31, December 31,
1996 1995
<S> <C> <C>
Raw materials............................... $ 35,215 $36,256
Finished goods.............................. 249,734 238,603
------- -------
$284,949 $274,859
======== ========
</TABLE>
3. Offering
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.
4. Acquisition of Analytical Resources, Inc.
In January 1996, the Company acquired 100% of the outstanding capital stock
of Analytical Resources, Inc. ("ARI"), a privately held radioactive waste
management and environmental safety and health consulting firm. The acquisition
of ARI was accounted for using the purchase method of accounting. The purchase
price of approximately $300,000 was equal to the estimated fair value of the net
tangible assets acquired as of January 1, 1996.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
GTS DURATEK, INC. AND SUBSIDIARIES
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 comparisons over longer periods.
Results of Operations
Revenues increased by $800,000 or 8.4% from $9.5 million in the first
quarter of 1995 as compared to $10.3 million for the first quarter of 1996. The
increase was attributable to an increase in revenues from waste treatment
projects and teaming fees of $1.9 million partially offset by a decrease in
technical support services revenues of $1.1 million. 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 $1.8
million for the first quarter of 1996 as compared to $600,000 for the same
period in 1995. Revenues for the first quarter of 1996 also included 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 fewer power
plant outages being scheduled in the first quarter of 1996 as compared to the
same period in 1995.
Gross profit increased by $1.0 million or 55.5%, from $1.7 million in the
first quarter of 1995 to $2.7 million in the first quarter of 1996, principally
as a result of the teaming fee from BNFL. As a percentage of revenues, gross
profit increased from 18.4% for the first quarter of 1995 to 26.4% for the same
period in 1996, primarily the result of the BNFL fee. The gross profit
percentage from waste treatment projects was lower in the first quarter of 1996
as compared to the same period in 1995 principally due to the project mix. The
gross profit percentage from technical support services was unchanged for the
first quarter of 1996 as compared to the same period in 1995.
Selling, general and administrative expenses increased by $600,000 or 45.4%
from the first quarter of 1995 as compared to the first quarter of 1996. As a
percentage of revenues, selling general and administrative expenses increased
from 13.9% in the first quarter of 1995 to 18.7% for the same period in 1996.
The increase was principally the result of higher operating costs for waste
treatment projects for the DOE as well as pre-operating costs for the DuraTherm
commercial waste treatment project which had not commenced operations.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Continued)
GTS DURATEK, INC. AND SUBSIDIARIES
Interest expense, net increased by $27,000 for the first quarter of 1996 as
compared to the same period in 1995. The increase was principally the result of
interest expense on the convertible debenture held by BNFL, partially offset by
the interest income from the net proceeds of convertible preferred stock
issuance.
The Company's proportionate share in the loss of its 50% owned joint
venture, Vitritek Environmental, Inc. ("Vitritek"), decreased from $79,000 for
the first quarter of 1995 as compared to $46,000 for the same period in 1996.
The decrease was the result of limited business activity of the joint venture.
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 three months ended March 31, 1996, the Company used $3.3 million
of cash in investing activities principally related to equipment acquired for
improvements to the Company's DuraTherm facility in San Leon, Texas, 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 account
receivable, as defined in the agreement. Borrowings outstanding under the
agreement are due on demand and bear interest at the bank's prime interest rate
plus 1%. At March 31, 1996, no borrowings were outstanding and the Company had
available borrowings of $4.9 million.
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.
<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.
<PAGE>
Part II Other Information
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 first quarter of 1996. Net income in 1995
and the first quarter of 1996 was also significantly greater than in 1994 and
the first quarter 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' 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.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
See accompanying Index to Exhibits
b. Reports
None.
<PAGE>
GTS DURATEK, INC. AND SUBSIDIARIES
March 31, 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: May 13, 1996 BY: /s/ Robert F. Shawver
Robert F. Shawver
Executive Vice President and
Chief Financial Officer
Dated: May 13, 1996 BY: /s/Craig T. Bartlett
Craig T. Bartlett
Controller and Principal
Accounting Officer
<PAGE>
Exhibits Index
3.1 Amended and Restated Certificate of Incorporation of the Registrant
(filed herewith)
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)
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)
<PAGE>
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).
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).
<PAGE>
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 ended March 31, 1996. (filed herewith)
27 Financial Data Schedule. (filed herewith)
<PAGE>
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
GTS DURATEK, INC.
GTS DURATEK, INC., a corporation organized and existing under the laws of
the State of Delaware, hereby certifies as follows:
1. The name of the corporation is GTS Duratek, Inc. (hereinafter called the
"Corporation"). The previous name of the corporation was Duratek Corporation
which was changed to its current name with the filing of the Restated
Certificate of Incorporation with the Secretary of State of the State of
Delaware (the "Secretary of State") on June 4, 1992. The Corporation was
originally incorporated under the name NPS Waste Technologies, Inc. and its
original Certificate of Incorporation was filed with the Secretary of State on
December 8, 1982.
2. This Amended and Restated Certificate of Incorporation has been duly
proposed by resolution of the Board of Directors of the Corporation and has been
duly adopted by the stockholders of the Corporation in accordance with the
provisions of Sections 242 and 245 of the General Corporation Law of the State
of Delaware.
3. This Amended and Restated Certificate of Incorporation restates and
integrates and further amends the Restated Certificate of Incorporation of the
Corporation to read in its entirety as follows:
FIRST: The name of the Corporation is
GTS Duratek, Inc.
SECOND: The registered office of the Corporation in the State of Delaware
is located at 1209 Orange Street, in the City of Wilmington, County of New
Castle, Delaware. The name of the registered agent at that address is The
Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of Delaware.
FOURTH: The total number of shares of stock which the Corporation shall
have authority to issue is Forty Million (40,000,000) consisting of Five Million
(5,000,000) shares of preferred stock, par value $.01 per share (hereinafter
called the "Preferred Stock") and Thirty-Five Million (35,000,000) shares of
common stock, par value $.01 per share (hereinafter called the "Common Stock").
<PAGE>
The Preferred Stock may be issued from time to time in one or more series.
The Board of Directors is hereby authorized to provide for the issuance of
shares of Preferred Stock in series, to establish from time to time the number
of shares to be included in each such series, and to fix the designation,
powers, preferences and rights of the shares of each such series and the
qualifications, limitations and restrictions thereof. The authority of the Board
of Directors with respect to each series shall include, but not be limited to,
determination of any or all of the following:
(a) The designation of the series, which may be by
distinguishing number, letter or title;
(b) The number of shares of the series, which number the Board
of Directors may thereafter (except where otherwise provided in the
creation of the series) increase (but not above the total number of
authorized shares of the class) or decrease (but not below the number of
shares then outstanding);
(c) Whether dividends, if any, shall be cumulative or
noncumulative, the dividend rate of the series and the dates at which
dividends, if any, shall be payable;
(d) The redemption rights and price or prices, if any, for
shares of the series;
(e) The terms and amount of any sinking fund provided for the
purchase or redemption of shares of the series;
(f) The amounts payable on shares of the series in the event of
any voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Corporation;
(g) Whether the shares of the series shall be convertible into
or exchangeable for shares of any other class or series of shares, or
any other security, of the Corporation or any other corporation, and, if
so, the specification of such other class or series or such other
security, the conversion price or prices or rate or rates of exchange,
any adjustments thereof, the date or dates as of which such shares shall
be convertible and all other terms and conditions upon which such
conversion or exchange may be made;
(h) Restrictions on the issuance of shares of the same series or
of any other class or series and the right, if any, to subscribe for or
purchase any securities of the Corporation or any other corporation;
(i) The voting rights, if any, of the holders of such series,
and
(j) Any other relative, participating, optional or other special
power, preferences, rights, qualifications, limitations or restrictions
thereof;
all as determined from time to time by the Board of Directors and stated in the
resolutions providing for the issuance of such preferred stock (a "Preferred
Stock Designation").
<PAGE>
The holders of Common Stock shall be entitled to one vote for each such
share upon all questions presented to the stockholders. Except as may be
provided in this Amended and Restated Certificate of Incorporation or by the
Board of Directors in a Preferred Stock Designation, the Common Stock shall have
the exclusive right to vote for the election of directors and for all other
purposes, and holders of Preferred Stock shall not be entitled to receive notice
of any meeting of stockholders at which they are not entitled to vote or
consent.
The Corporation shall be entitled to treat the person in whose name any
share of its stock is registered as the owner thereof for all purposes and shall
not be bound to recognize any equitable or other claim to, or interest in, such
share of on the part of any other person, whether or not the Corporation shall
have notice thereof, except expressly provided by applicable laws.
FIFTH: The following provisions are inserted for the management of the
business and for the conduct of the affairs of the Corporation, and for
creating, defining, limiting and regulating the powers of the Corporation, the
directors and the stockholders.
(a) Subject to any limitation contained in the bylaws, the Board
of Directors may make bylaws, and from time to time may alter, amend,
change, add to or repeal any bylaws of the Corporation without the
assent or vote of the stockholders of the Corporation.
(b) The Corporation shall, to the maximum extent permitted from
time to time under the law of the State of Delaware, indemnify and upon
request shall advance expenses to any person who is or was a party or is
threatened to be made a party to any threatened, pending or completed
action, suit, proceeding or claim, whether civil, criminal,
administrative or investigative, by reason of the fact that he is or was
or has agreed to be a director or officer of the Corporation or while a
director or officer is or was serving at the request of the Corporation
as a director, officer, partner, trustee, employee or agent of any
corporation, partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, against
expenses (including attorneys' fees and expenses), judgments, fines,
penalties and amounts paid in settlement or incurred in connection with
the investigation, preparation to defend or defense of such action,
suit, proceeding, claim or counterclaim initiated by or on behalf of
such person. Such indemnification shall not be exclusive of other
indemnification rights arising under any bylaw, agreement, vote of
directors or stockholders or otherwise and shall inure to the benefit of
the heirs and legal representatives of such person. Any repeal or
modification of the foregoing provisions of this Section (b) of Article
FIFTH shall not adversely affect any right or protection of a director
or officer of the Corporation existing at the time of such repeal or
modification.
(c) No director of the corporation shall be liable to the
Corporation or any of its stockholders for monetary damages for breach
of fiduciary duty as a director, except for liability (i) for any breach
of the director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the Delaware General Corporation Law, or (iv) for
any transaction from which the director derived an improper personal
benefit. Furthermore, notwithstanding the foregoing provision, in the
event that the General Corporation Law of Delaware is amended or enacted
to permit further limitation or elimination of the personal liability of
the director, the personal liability of the Corporation's directors
shall be limited or eliminated to the fullest extent permitted by the
applicable law. Any repeal or modification of this Section (c) of
Article FIFTH shall not increase the personal liability of any director
of the Corporation for any act or occurrence taking place prior to such
repeal or modification, or otherwise adversely affect any right or
protection of a director of the Corporation existing at the time of such
repeal or modification.
<PAGE>
(d) The books of the Corporation may be kept at such place
within or without the State of Delaware as the bylaws of the Corporation
may provide or as may be designated from time to time by the Board of
Directors of the Corporation.
SIXTH: No holder of stock of the Corporation shall be entitled as of right
to purchase or subscribe for any part of the any unissued stock of the
Corporation or any additional stock to be issued by reason of any increase of
the authorized capital stock of the Corporation, or any bonds, certificates of
indebtedness, debentures or other securities convertible into stock or such
additional authorized issue of new stock, but rather such stock, bonds,
certificates of indebtedness, debentures and other securities may be issued and
disposed of pursuant to resolution of the Board of Directors to such persons,
firms, corporations or associations, and upon such terms as may be deemed
advisable by the Board of Directors in the exercise of their discretion.
SEVENTH:
(a) Subject to the rights of the holders of any class or series
of stock having a preference over the Common Stock as to dividends or
upon liquidation to elect additional directors under specified
circumstances, the number of directors of the Corporation shall be fixed
by the bylaws of the Corporation and may be increased or decreased from
time to time in such a manner as may be prescribed by the bylaws, but in
no case shall the number be less than 3 nor more than 15.
(b) Advance notice of stockholder nominations for the election
of directors and advance notice of business to be brought by
stockholders before an annual meeting shall be given in the manner
provided in the bylaws of the Corporation.
EIGHTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Amend and Restated Certificate of
Incorporation in the manner now or hereafter prescribed by law, and all rights
conferred upon stockholders herein are granted subject to this reservation.
This Amended and Restated Certificate of Incorporation was duly adopted by
unanimous written consent of the directors and by written consent of the
stockholders in accordance with the applicable provisions of Sections 141, 228,
242 and 245 of the General Corporation Law of the State of Delaware and written
notice of the adoption of this Amended and Restated Certificate of Incorporation
has been given as provided by Section 228 of the General Corporation Law of the
State of Delaware to every stockholder entitled to such notice.
<PAGE>
IN WITNESS WHEREOF, said GTS DURATEK, INC. has caused this certificate to
be signed by its President as of the 3 day of January, 1995, and attested to by
its Assistant Secretary.
GTS DURATEK, INC.
By: /s/Robert E. Prince
Robert E. Prince, President
Attested: /s/Diane R. Brown
Diane R. Brown, Assistant Secretary
* As amended by a Certificate of Amendment of Certificate of Incorporation filed
with the Secretary of State of the State of Delaware on April l2, 1996.
<PAGE>
<TABLE>
GTS DURATEK, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
Three Months Ended March 31, 1996 and 1995
1996 1995
<S> <C> <C>
Primary:
Earnings (loss) applicable to common stock $500,449 $292,306
Accrued dividend on preferred stock (320,000) (235,200)
Accretion of redeemable preferred stock (54,712) (35,623)
------- -------
Net earnings (loss) applicable to common stock $125,737 $21,483
======== =======
Average common shares outstanding 9,521,811 8,689,317
Dilutive effect of stock options and warrants 2,494,966 619,430
--------- -------
Weighted average commom shares outstanding 12,016,777 9,308,747
Earnings (loss) per common share $0.01 $0.00
===== =====
Fully Diluted:
Earnings (loss) applicable to common stock 500,449 292,306
Accrued dividend on preferred stock (320,000) (235,200)
Accretion of redeemble preferred stock (54,712) (35,623)
------- -------
Net earnings (loss) applicable to common stock $125,737 $21,483
======== =======
Average common shares outstanding 9,521,811 8,689,317
Dilutive effect of stock options and warrants 2,527,140 817,592
--------- -------
Weighted average common shares outstanding 12,048,951 9,506,909
Earnings (loss) per common share $0.01 $0.00
===== =====
</TABLE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED CONDENSED BALANCE SHEET AS OF MARCH 31, 1996 (UNAUDITED) AND THE
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH
31, 1996 (UNAUDITED), OF GTS DURATEK, INC. AND SUBSIDIARIES, AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1996
<CASH> 7,140,946
<SECURITIES> 0
<RECEIVABLES> 18,116,486
<ALLOWANCES> (94,964)
<INVENTORY> 284,949
<CURRENT-ASSETS> 25,982,704
<PP&E> 10,190,348
<DEPRECIATION> (4,256,729)
<TOTAL-ASSETS> 38,977,230
<CURRENT-LIABILITIES> 3,929,489
<BONDS> 10,502,450
14,663,601
0
<COMMON> 96,513
<OTHER-SE> 9,785,177
<TOTAL-LIABILITY-AND-EQUITY> 38,977,230
<SALES> 0
<TOTAL-REVENUES> 10,336,235
<CGS> 0
<TOTAL-COSTS> 7,605,184
<OTHER-EXPENSES> 1,923,180
<LOSS-PROVISION> 7,500
<INTEREST-EXPENSE> 43,827
<INCOME-PRETAX> 756,544
<INCOME-TAX> 210,261
<INCOME-CONTINUING> 500,449
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 500,449
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
