<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q/A
[Mark One]
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period 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 No. 1-10489
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KIMMINS CORP.
(Exact name of registrant as specified in its charter)
Delaware 59-2763096
(State of incorporation) (I.R.S. Employer
Identification Number)
1501 Second Avenue, East, Tampa, Florida 33605
(Address of registrant's principal executive offices,
including zip code)
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(Registrant's telephone number, including area code):
(813) 248-3878
NONE
-------------------------------------------------------------------
(Former name, former address, and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
Applicable Only to Issuers Involved in Bankruptcy
Proceedings During the Preceding Five Years
Indicate by a check mark whether the registrant has filed all documents
and reports required to be filed by Sections 12, 13, or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court. Yes [X] No [ ]
Applicable Only to Corporate Issuers
The number of shares of Common Stock outstanding on August 12, 1996, was
4,447,397 shares.
The number of shares of Class B Common Stock outstanding on August 12,
1996, was 2,291,569 shares.<PAGE>
KIMMINS CORP.
FORM 10-Q/A
INDEX
PAGE
------
PART I. FINANCIAL INFORMATION
Item 1. Consolidated balance sheets at
December 31, 1995 and
June 30, 1996 (unaudited) . . . . . . . . . . . 1 - 2
Consolidated statements of operations
for the three and six months ended
June 30, 1995 and 1996 (unaudited) . . . . . . . 3 - 4
Consolidated statements of cash flows for
the six months ended June 30, 1995 and 1996
(unaudited) . . . . . . . . . . . . . . . . . . . . 5
Notes to consolidated financial statements . . . 6 - 7
Item 2. Management's discussion and analysis
of financial condition and results of
operations . . . . . . . . . . . . . . . . . . 8 - 10
PART II. OTHER INFORMATION
Item 1. Legal proceedings . . . . . . . . . . . . . . . . 11
Item 2. Changes in securities . . . . . . . . . . . . . . 11
Item 3. Defaults upon senior securities . . . . . . . . . 11
Item 4. Submission of matters to
a vote of security holders . . . . . . . . . . . . 11
Item 5. Other information . . . . . . . . . . . . . . . . 11
Item 6. Exhibits and reports on Form 8-K . . . . . . . . . 11
Signatures . . . . . . . . . . . . . . . . . . . . 12<PAGE>
SECURITIES AND EXCHANGE COMMISSION FORM 10-Q/A
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
KIMMINS CORP.
CONSOLIDATED BALANCE SHEETS
December 31, June 30,
1995 1996
ASSETS ------------- -------------
(unaudited)
Current assets:
Cash . . . . . . . . . . . . . . . $ 1,160,463 $ 208,513
Accounts receivable:
Contract and trade . . . . . . 22,152,197 21,011,910
Other receivables -
affiliates . . . . . . . . 1,903,832 1,945,718
Notes receivable - affiliate . . . 56,667 56,667
Costs and estimated earnings in
excess of billings on
uncompleted contracts . . . . . 15,378,178 14,770,676
Income tax refund receivable . . . 1,050,625 1,274,685
Deferred income tax . . . . . . . 742,130 742,130
Other current assets . . . . . . . 1,673,100 2,560,112
------------- -------------
Total current assets . . . . . 44,117,192 42,570,411
------------- -------------
Property and equipment, net . . . . . 37,592,661 38,413,933
Intangible assets . . . . . . . . . . 785,175 967,208
Accounts receivable - affiliates . . 1,450,716 1,503,522
Note receivable - affiliate . . . . . 3,794,060 4,000,696
Term note from affiliate (including
accrued interest of $506,755 and
$751,699 as of December 31, 1995,
and June 30, 1996, respectively) . 4,797,804 5,042,748
Other assets . . . . . . . . . . . . 1,090,942 1,382,352
------------- -------------
$ 93,628,550 $ 93,880,870
============= =============
See accompanying notes.<PAGE>
KIMMINS CORP.
CONSOLIDATED BALANCE SHEETS
(continued)
December 31, June 30,
1995 1996
------------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY (unaudited)
Current liabilities:
Accounts payable - trade . . . . . $ 17,358,270 $ 13,479,636
Accrued expenses . . . . . . . . . 7,049,132 6,883,658
Billings in excess of costs and
estimated earnings on
uncompleted contracts . . . . . 606,614 523,504
Current portion of long-term debt. 7,074,857 4,537,917
Current portion of Employee Stock
Ownership Plan Trust debt . . . 480,000 480,000
------------- -------------
Total current liabilities . 32,568,873 25,904,715
------------- -------------
Long-term debt . . . . . . . . . . . 24,619,969 32,735,169
Employee Stock Ownership
Plan Trust debt . . . . . . . . . 1,920,000 1,560,000
Deferred income taxes . . . . . . . . 4,559,531 4,559,531
Minority interest in subsidiary . . . 3,578,741 3,565,287
Commitments and contingencies . . . . - -
Stockholders' equity:
Preferred stock, $.001 par value;
1,000,000 shares authorized,
none issued and outstanding . . - -
Common stock, $.001 par value;
32,500,000 shares authorized;
4,447,397 shares issued and
outstanding . . . . . . . . . 4,447 4,447
Class B common stock, $.001 par
value; 10,000,000 shares
authorized; 2,291,569 shares
issued and outstanding . . . . 2,292 2,292
Capital in excess of par value . . 18,730,173 18,730,173
Retained earnings . . . . . . . . 9,911,606 8,872,986
Unearned employee compensation
from Employee Stock Ownership
Plan Trust . . . . . . . . . . (2,267,082) (2,040,000)
------------- -------------
26,381,436 25,569,898
Less treasury stock at cost . . . - (13,730)
------------- -------------
Total stockholders equity . . 26,381,436 25,556,168
------------- -------------
$ 93,628,550 $ 93,880,870
============= =============
See accompanying notes.<PAGE>
KIMMINS CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended June 30,
---------------------------
1995 1996
------------- -------------
(unaudited) (unaudited)
Revenue:
Gross revenue . . . . . . . . . . $ 25,468,296 $ 27,374,204
Outside services, at cost . . . . (2,575,507) (2,291,739)
------------- -------------
Net revenue . . . . . . . . . . . 22,892,789 25,082,465
Costs and expenses:
Cost of revenue earned . . . . . . 18,856,400 20,315,712
Selling, general and
administrative expenses . . . . 3,154,260 3,796,997
------------- -------------
Operating income . . . . . . . . . 882,129 969,756
Minority interest in net income of
subsidiary . . . . . . . . . . . . (123,740) (33,436)
Interest expense, net . . . . . . . . (331,364) (550,764)
------------- -------------
Income before provision for income
taxes . . . . . . . . . . . . . . 427,025 385,556
Provision for income taxes . . . . 203,425 158,014
------------- -------------
Net income . . . . . . . . . . . . . $ 223,600 $ 227,542
============= =============
Per Share Date:
Income per share . . . . . . . . . . $ .05 $ .05
============= =============
Weighted average number of shares
outstanding used in computation . 4,442,997 4,444,782
============= =============
See accompanying notes.<PAGE>
KIMMINS CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
Six months ended June 30,
---------------------------
1995 1996
------------- -------------
(unaudited) (unaudited)
Revenue:
Gross revenue . . . . . . . . . . $ 51,218,046 $ 52,084,349
Outside services, at cost . . . . (7,280,613) (4,590,742)
------------- -------------
Net revenue . . . . . . . . . . . 43,937,433 47,493,607
Costs and expenses:
Cost of revenue earned . . . . . . 35,565,788 40,930,446
Selling, general and
administrative expenses . . . . 5,874,802 7,409,827
------------- -------------
Operating income (loss) . . . . . . 2,496,843 (846,666)
Minority interest in net (income)
loss of subsidiary . . . . . . . . (225,097) 13,454
Interest expense, net . . . . . . . . (674,900) (1,046,022)
------------- -------------
Income (loss) before provision for
income taxes . . . . . . . . . . . 1,596,846 (1,879,234)
Provision for income taxes
(benefit) . . . . . . . . . . . 710,202 (840,614)
------------- -------------
Net income (loss) . . . . . . . . . $ 886,644 $ (1,038,620)
============= =============
Per Share Data:
Income (loss) per share . . . . . . . $ .20 $ (.23)
============= =============
Weighted average number of shares
outstanding used in
computation . . . . . . . . . . . 4,442,997 4,445,746
============= =============
See accompanying notes.<PAGE>
KIMMINS CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
DECREASE IN CASH
Six months ended June 30,
---------------------------
1995 1996
------------- -------------
(unaudited) (unaudited)
Cash flows from operating activities:
Net income (loss) . . . . . . . . $ 886,644 $ (1,038,620)
Adjustments to reconcile net
income (loss) to net cash
provided (used) by operating
activities:
Depreciation and
amortization . . . . . . . 1,874,427 2,571,433
(Gain) loss on disposal of
property and equipment . . (143,814) 58,403
Accrued interest on
term note . . . . . . . . (222,193) (244,944)
Minority interest in net
(income) loss of
subsidiary . . . . . . . . 225,097 (13,454)
Unearned employee
compensation from Employee
Stock Ownership Plan
Trust . . . . . . . . . . 297,852 227,082
Changes in operating assets
and liabilities:
Accounts receivable . . . (129,076) 838,959
Costs and estimated
earnings in excess of
billings on uncompleted
contracts . . . . . . . (239,455) 607,502
Income tax refund
receivable . . . . . . 501,331 (224,060)
Other assets . . . . . . . (1,163,770) (1,178,422)
Accounts payable . . . . . 439,932 (3,878,634)
Accrued expenses . . . . . 486,932 (165,474)
Billings in excess of costs
and estimated earnings
on uncompleted
contracts . . . . . . . (27,913) (83,110)
------------- -------------
Total adjustments . . . . . . . . 1,899,350 (1,484,719)
------------- -------------
Net cash provided (used) by operating
activities . . . . . . . . . . . 2,785,994 (2,523,339)
------------- -------------
See accompanying notes.<PAGE>
KIMMINS CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
DECREASE IN CASH (continued)
Six months ended June 30,
---------------------------
1995 1996
------------- -------------
(unaudited) (unaudited)
Cash flows from investing activities:
Capital expenditures . . . . . . (4,571,202) (3,816,724)
Proceeds from sale of property
and equipment . . . . . . . . . 621,360 183,583
Net cash used by investing ------------- -------------
activities . . . . . . . . . . . (3,949,842) (3,633,141)
------------- -------------
Cash flows from financing activities:
Proceeds from long-term debt . . 4,509,748 9,587,467
Repayments of long-term debt . . (3,091,167) (4,009,207)
Repayments of Employee Stock
Ownership Plan Trust debt . . . (300,000) (360,000)
Purchase of treasury stock . . . - (13,730)
Net cash provided by financing ------------- -------------
activities . . . . . . . . . . . 1,118,581 5,204,530
------------- -------------
Net decrease in cash . . . . . . . . (45,267) (951,950)
Cash, beginning of period . . . . . . 479,106 1,160,463
Cash, end of period . . . . . . . . . ------------- -------------
$ 433,839 $ 208,513
============= =============
See accompanying notes.<PAGE>
KIMMINS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Organization and summary of significant accounting policies
Basis of presentation - These financial statements of Kimmins Corp.
(f/k/a Kimmins Environmental Service Corp.) ("Kimmins") and its
subsidiaries (collectively, the "Company") omit or condense certain
footnotes and other information normally included in financial
statements prepared in accordance with generally accepted accounting
principles. In the opinion of management, all adjustments
(consisting only of normal recurring accruals) necessary for fair
presentation of the financial information for the interim periods
reported have been made.
Treasury stock - Treasury stock is shown at cost and, in 1996,
consists of 2,600 shares of common stock (none during 1995).
2. Costs and estimated earnings on uncompleted contracts
December 31, June 30,
1995 1996
------------- -------------
(unaudited)
Expenditures on uncompleted
contracts . . . . . . . . . . . . $ 65,767,913 $ 76,971,552
Estimated earnings on uncompleted
contracts . . . . . . . . . . . . 7,456,516 7,948,537
------------- -------------
73,224,429 84,920,089
Less actual and allowable billings
on uncompleted contracts . . . . 58,452,865 70,672,917
------------- -------------
$ 14,771,564 $ 14,247,172
============= =============
Costs and estimated earnings in
excess of billings on uncompleted
contracts . . . . . . . . . . . . $ 15,378,178 $ 14,770,676
Billings in excess of costs and
estimated earnings on uncompleted
contracts . . . . . . . . . . . . (606,614) (523,504)
------------- -------------
$ 14,771,564 $ 14,247,172
============= =============<PAGE>
KIMMINS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. Property and equipment, net
December 31, June 30,
1995 1996
------------- -------------
(unaudited)
Land . . . . . . . . . . . . . . . $ 5,067,437 $ 5,428,829
Buildings and improvements . . . . 7,317,544 7,412,612
Construction and recycling
equipment . . . . . . . . . . . . 42,345,792 44,899,015
Furniture and fixtures . . . . . . 1,463,600 1,406,183
Construction in progress . . . . . 615,846 331,806
------------- -------------
56,810,219 59,478,445
Less accumulated depreciation . . . (19,217,558) (21,064,512)
------------- -------------
$ 37,592,661 38,413,933
============= =============
Property and equipment are recorded at cost. Depreciation is
provided using the straight-line method over estimated useful lives
ranging from three to thirty years. Construction in progress will be
depreciated over the estimated useful lives when placed into service.<PAGE>
KIMMINS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. Long-term debt
December 31, June 30,
1995 1996
------------- -------------
(unaudited)
Notes payable, principal and
interest payable in monthly
installments through March 1, 2001,
interest at varying rates up to 13
percent, collateralized by
equipment . . . . . . . . . . . . . $ 20,215,486 $ 20,068,857
Revolving term bank line of credit,
$12,250,000($5,000,000 during
1995), maximum, due October 31,
1997, interest at lender's base
rate plus 1/2 percent. . . . . . . . 3,292,607 10,164,810
Bank note payable, varying
principal and interest payments
through August 1, 1996, interest at
prime plus 1 3/4 percent,
collateralized by equipment . . . . 1,500,000 500,000
Mortgage notes, principal and
interest payable in monthly
installments through October 1,
2010, interest at varying rates up
to prime plus 1 3/4 percent,
collateralized by land and
buildings . . . . . . . . . . . . . 5,286,733 5,139,419
Mortgage notes - $500,000 with
related parties, interest payable
in quarterly installments at 10
percent, plus a performance based
return not to exceed 6 percent,
principal due January 9, 1997,
collateralized by land and
buildings . . . . . . . . . . . . . 1,400,000 1,400,000
------------- -------------
31,694,826 37,273,086
Less current portion . . . . . . . 7,074,857 4,537,917
------------- -------------
$ 24,619,969 $ 32,735,169
============= =============
At June 30, 1996, $1,400,000 of the Mortgage Notes have been
classified as long-term debt since it is the Company's intent to
refinance the debt on a long-term basis.<PAGE>
KIMMINS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. Long-term debt (continued)
The debt agreements contain certain covenants, the most restrictive
of which require maintenance of a consolidated tangible net worth, as
defined, of not less than $15,900,000, maintenance of a debt to
consolidated tangible net worth ratio of no more than 4.0 to 1.0,
consolidated debt service coverage ration of at least 0.9 to 1.0, and a
fixed charge coverage ratio of not less than 0.9 to 1.0. In addition,
the covenants prohibit the ability, without lender approval, of the
Company to pay dividends. As of June 30, 1996 the Company was in
compliance with or obtained waivers for all loan covenants. The lender
has not declared the Company in default and has allowed the Company to
remain in violation of these covenants. The Company has obtained the
personal guarantee of Mr. Francis Williams should the lender accelerates
the maturities of the Revolving Term Bank Line of Credit, Bank Note
Payable, and the Mortgage Note on the corporate office. This guarantee
provides that Mr. Williams will lend the necessary funds to the Company,
or arrange for the Company to borrow a similar amount under similar terms
and maturities so that the Company is not required to pay any principal
payments during 1996 more than the regularly scheduled maturities.<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
COMPARISON OF THREE MONTHS ENDED JUNE 30, 1996 AND 1995
Net revenue for the three months ended June 30, 1996, increased by 10
percent to $25,082,000 from $22,893,000 for the three months ended June
30, 1995. The increase was due primarily to the growth of the Company's
utility contracting services ($2,251,000 increase in net revenue). This
increase offsets certain decreases in the Company's industrial demolition
services ($428,000 decrease in net revenue).
Outside services, which largely represent subcontractor costs,
decreased, as a percentage of net revenue, to 9 percent for the three
months ended June 30, 1996, from 11 percent for the three months ended
June 30, 1995. The Company will utilize the services of a subcontractor
when it determines that an economic opportunity exists with regards to
providing the services internally.
Cost of revenue earned, as a percentage of net revenue, for the three
months ended June 30, 1996, decreased to 81 percent from 82 percent for
the three months ended June 30, 1995. As a result, the gross margin
percentage increased to 19 percent of net revenue for the three months
ended June 30, 1996, from 18 percent for the three months ended June 30,
1995. The gross profit for the three months ended June 30, 1996, was
$4,767,000 compared to $4,036,000 for the three months ended June 30,
1995. The increase in the dollar amount of gross margin was associated
primarily with the Company's increase in net revenue.
During the three months ended June 30, 1996, selling, general and
administrative expenses increased to $3,797,000 (15 percent of net
revenue) from $3,154,000 (14 percent of net revenue) for the three months
ended June 30, 1995. The dollar and percentage increases in selling,
general, and administrative expenses are primarily a result of increased
overhead costs associated with higher net revenue.
Minority interest in net income of subsidiary was $33,000 for the
three months ended June 30, 1996, compared to $124,000 for the three
months ended June 30, 1995. The minority interest in net income of
subsidiary reflects approximately 26 percent of TransCor's earnings as a
result of the March 25, 1993, initial public offering of TransCor's
common stock.
Net interest expense increased to $551,000 from $331,000 primarily
due to additional borrowings under the Company's revolving term bank line
associated with working capital requirements from increased operating
volume.
As a result of the foregoing, income before provision for income
taxes for the three months ended June 30, 1996, was $386,000 (2 percent
of net revenue) compared to $427,000 (2 percent of net revenue) during
the same period in 1995.
The Company's effective tax rate was 41.0 percent for the three
months ended June 30, 1996, compared to a tax rate of 47.6 percent for
1995. The decrease in the effective tax rate was due primarily to lower
state income taxes.<PAGE>
As a result of the foregoing, net income for the three months ended
June 30, 1996, was $228,000 (1 percent of net revenue) as compared with
$224,000 (1 percent of net revenue) for the three months ended June 30,
1995.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
COMPARISON OF SIX MONTHS ENDED JUNE 30, 1996 AND 1995
Net revenue for the six months ended June 30, 1996, increased by 8
percent to $47,494,000 from $43,937,000 for the six months ended June 30,
1995. The increase was due primarily to the continued growth of the
Company's solid waste management segment as it expands its operations in
the Florida market ($2,272,000 increase in net revenue) and the growth of
the Company's utility contracting services ($3,090,000 increase in net
revenue). This increase offsets certain decreases in the Company's
remediation services ($1,278,000 decrease in net revenue) and abatement
services ($337,000 decrease in net revenue).
Outside services, which largely represent subcontractor costs,
decreased, as a percentage of net revenue, to 10 percent for the six
months ended June 30, 1996, from 17 percent for the six months ended June
30, 1995. The Company will utilize the services of a subcontractor when
it determines that an economic opportunity exists with regards to
providing the services internally.
Cost of revenue earned, as a percentage of net revenue, for the six
months ended June 30, 1996, increased to 86 percent from 81 percent for
the six months ended June 30, 1995. As a result, the gross margin
percentage decreased to 14 percent of net revenue for the first half of
1996 from 19 percent for the same period in 1995. The gross profit for
the six months ended June 30, 1996, was $6,563,000 compared to $8,372,000
for the six months ended June 30, 1995. The decrease in the dollar
amount and percentage of gross margin was primarily associated with
losses incurred during the first quarter of 1996 on two utility
contracting projects that failed to perform to the Company's original
projections and lower profit margins earned on certain the solid waste
management services.
During the six months ended June 30, 1996, selling, general, and
administrative expenses increased to $7,410,000 (16 percent of net
revenue) from $5,875,000 (13 percent of net revenue for the six months
ended June 30, 1995. The dollar increase in selling, general, and
administrative expenses is primarily attributable to increased overhead
costs, such as office salaries and marketing costs that are associated
with higher levels of operations.
Minority interest in net loss of subsidiary was $13,000 for the six
months ended June 30, 1996 compared to minority interest in net income of
subsidiary of $225,000 for the six months ended June 30, 1995. The
minority interest in net income (loss) of subsidiary reflects
approximately 26 percent of TransCor's earnings as a result of the March
25, 1993, initial public offering of TransCor's common stock.<PAGE>
Net interest expense increased to $1,046,000 from $674,000 primarily
due to additional borrowings under the Company's revolving term bank line
associated with working capital requirements from increased operating
volume.
The Company's loss before provision for income taxes for the six
months ended June 30, 1996, was ($1,879,000) (negative 4 percent of net
revenue) compared to income before provision for income taxes of
$1,597,000 (4 percent of net revenue) during the six months ended June
30, 1995.
The Company's effective tax rate was 44.7 percent for the six months
ended June 30, 1996, compared to a tax rate of 44.5 percent for 1995.
As a result of the foregoing, the net loss incurred for the six
months ended June 30, 1996, was ($1,039,000) (negative 2 percent of net
revenue) as compared with net income for the six months ended June 30,
1995, of $887,000 (2 percent of net revenue).
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Cash provided (used) by operating activities was ($2,523,000) and
$2,786,000 during the six months ended June 30, 1996 and 1995, respec-
tively. For the first six months of 1996, the net cash used by operating
activities of $2,523,000 was due primarily to the company s net loss,
offset by the effect of depreciation, net of changes in certain
operating assets and liabilities (primarily accounts receivables, other
assets and accounts payable). For the first six months of 1995, cash
provided by operating activities of $2,786,000 was due primarily to cash
provided by net income, plus the effect of depreciation, net of changes
in certain operating assets and liabilities (primarily accounts
receivable, costs and estimated earnings in excess of billings on
uncompleted contracts, and accrued expenses). The Company had cash
requirements related to capital expenditures during the six months ended
June 30, 1996 and 1995, of $3,817,000 and $4,571,000, respectively.
These expenditures were primarily related to the acquisition of equipment
associated with the Company's solid waste management and utility
contracting segments. At June 30, 1996, the Company has borrowed
approximately $10,165,000 of its term bank line of credit, with
$2,085,000 available for future borrowings.
The debt agreements contain certain covenants, the most restrictive
of which require maintenance of a consolidated tangible net worth, as
defined, of not less than $15,900,000, maintenance of a debt to
consolidated tangible net worth ratio of no more than 4.0 to 1.0,
consolidated debt service coverage ration of at least 0.9 to 1.0, and a
fixed charge coverage ratio of not less than 0.9 to 1.0. In addition,
the covenants prohibit the ability, without lender approval, of the
Company to pay dividends. As of June 30, 1996 the Company was not in
compliance with the loan covenants. The lender has not declared the
Company in default and has allowed the Company to remain in violation of
these covenants. The Company has obtained the personal guarantee of Mr.
Francis Williams should the lender accelerates the maturities of the
Revolving Term Bank Line of Credit, Bank Note Payable, and the Mortgage<PAGE>
Note on the corporate office. This guarantee provides that Mr. Williams
will lend the necessary funds to the Company, or arrange for the Company
to borrow a similar amount under similar terms and maturities so that the
Company is not required to pay any principal payments during 1996 more
than the regularly scheduled maturities.
The Company's ratio of total debt to total equity was 2.41 : 1.00 and
2.53 : 1.00 at December 31, 1995 and June 30, 1996, respectively. The
increase in total debt is primarily due to increased borrowings under the
Company's revolving term bank line of credit to fund operations.
During both the six months ended June 30, 1996 and 1995, the
Company's average contract and trade receivables less retainage were
outstanding for 67 days. Management believes that the number of days
outstanding for its current receivables approximates industry norms. A
portion of the Company's contracting operations are subcontracted, and
any delay in collections of receivables relating to primary contracts
will usually result in the ability of the Company to delay payment of
offsetting subcontract payables.
Mr. Francis M. Williams is the sole shareholder of the corporate
general partner and the sole limited partner of Sunshadow Apartments,
Ltd., and Summerbreeze Apartments, Ltd., two Florida real estate limited
partnerships (collectively, the Apartments ). On June 30, 1993, the
Company, Citicorp Real Estate, Inc. ( Citicorp ), the Apartments, and
Francis M. Williams entered into a settlement and note renewal agreement
whereby the Apartments' Chapter 11 bankruptcy filings were voluntarily
dismissed. In accordance with the terms of the settlement agreement,
$3,638,696 of the accounts receivable - affiliates balance recorded by
the Company was converted into a note receivable. The note receivable
bears interest at prime plus 2 percent, with principal and interest
payable in monthly installments through December 31, 1998, and is
guaranteed by Mr. Williams. Amounts due from the Apartments at December
31, 1995, and June 30, 1996, are approximately $3,851,000 and $4,057,000,
respectively.
At December 31, 1995, and June 30, 1996, $5,301,000, and $5,561,000,
respectively, of the combined accounts receivable - affiliates and note
receivable - affiliates are due from affiliates of the Company's
president. The affiliated receivables relate to contract services
performed and are guaranteed by Mr. Williams.
The Company's current bonding coverage for non-environmental projects
is $30 million for an individual project ($100 million aggregate). The
Company has been able to obtain bonding coverage in amounts up to $8.5
million for environmental projects. However, the Company has experienced
difficulties in obtaining bonding coverage for environmental projects in
excess of this amount. Although each project has its own distinct and
separate bond requirements, the Company may be unable to competitively
bid on environmental projects which require a bond in excess of $8.5
million.
Inflation has not had, and is not expected to have, a material effect
upon the Company's operations.<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal proceedings
None
Item 2. Changes in securities
None
Item 3. Defaults upon senior securities
None
Item 4. Submission of matters to a vote of security holders
None
Item 5. Other information
None
Item 6. Exhibits and reports on Form 8-K
(a) The following document is filed as an exhibit to this
Quarterly Report on
Form 10-Q/A:
27 - Financial Data Schedule (for SEC use only)
(b) No reports on Form 8-K were filed during the quarter for
which this report is filed.<PAGE>
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.
KIMMINS CORP.
Date: October 7, 1996 By: /s/Francis M. Williams
-------------------- -----------------------
Francis M. Williams
President and
Chief Executive Officer
(Principle Executive Officer)
Date: October 7, 1996 By: /s/Norman S. Dominiak
-------------------- -----------------------
Norman S. Dominiak
Vice President and
Chief Financial Officer
(Principle Accounting and
Financial Officer)<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> $208,513
<SECURITIES> $0
<RECEIVABLES> $23,388,431
<ALLOWANCES> ($430,803)
<INVENTORY> $297,458
<CURRENT-ASSETS> $42,570,411
<PP&E> $59,478,445
<DEPRECIATION> ($21,064,512)
<TOTAL-ASSETS> $93,880,870
<CURRENT-LIABILITIES> $25,904,715
<BONDS> $0
$0
$0
<COMMON> $6,739
<OTHER-SE> $25,549,429
<TOTAL-LIABILITY-AND-EQUITY> $93,880,870
<SALES> $52,084,349
<TOTAL-REVENUES> $52,084,349
<CGS> $45,521,188
<TOTAL-COSTS> $7,409,827
<OTHER-EXPENSES> ($13,454)
<LOSS-PROVISION> $0
<INTEREST-EXPENSE> ($1,046,022)
<INCOME-PRETAX> ($1,879,234)
<INCOME-TAX> ($840,614)
<INCOME-CONTINUING> ($1,038,620)
<DISCONTINUED> $0
<EXTRAORDINARY> $0
<CHANGES> $0
<NET-INCOME> ($1,038,620)
<EPS-PRIMARY> ($.23)
<EPS-DILUTED> ($.23)
</TABLE>
