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 0-3062
GUY F. ATKINSON COMPANY OF CALIFORNIA
(Exact name of registrant as specified in its charter)
STATE OF DELAWARE
(State or other jurisdiction of 94-1649018
incorporation or organization) (IRS Employer Identification No.)
1001 Bayhill Drive, San Bruno, California 94066
(Address of principal executive offices) (zip code)
Registrants' telephone number, including area code - (415) 876-1000
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, and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Common stock as of May 10, 1996
Issued and outstanding - 8,974,467 shares
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<PAGE>
Guy F. Atkinson Company of California
Consolidated Balance Sheets
(in thousands of dollars except share and per share amounts)
March 31, December 31,
1996 1995
(unaudited)
ASSETS
Current assets
Cash and short-term investments $7,382 $39,804
Accounts receivable 102,033 76,196
Costs and estimated earnings in excess of billings 9,014 28,751
Inventories and unamortized costs on contracts 21,435 20,987
Investments in joint ventures 32,396 32,272
Other current assets 5,847 5,244
- ----------------------------------------------------------------------------
Total current assets 178,107 203,254
- ----------------------------------------------------------------------------
Property, plant and equipment
At cost:
Land 2,575 2,683
Buildings 10,331 11,203
Construction equipment 33,779 36,036
Other equipment 8,043 7,478
- ----------------------------------------------------------------------------
54,728 57,400
Less accumulated depreciation 26,311 28,163
- ----------------------------------------------------------------------------
Total property, plant and equipment, net 28,417 29,237
- ----------------------------------------------------------------------------
Other assets 2,377 2,353
- ----------------------------------------------------------------------------
Total assets $208,901 $234,844
============================================================================
See accompanying notes
Page 1
<PAGE>
Guy F. Atkinson Company of California
Consolidated Balance Sheets
(in thousands of dollars except share and per share amounts)
March 31, December 31,
1996 1995
(unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable, including current portion of long-
term debt $5,793 $844
Accounts payable 65,890 86,671
Billings in excess of costs and estimated earnings 14,025 20,300
Accrued federal and foreign income taxes 4,133 5,020
Other accrued expenses 25,533 28,145
Deferred income taxes 249 248
Due to joint ventures 460 730
- ----------------------------------------------------------------------------
Total current liabilities 116,083 141,958
- ----------------------------------------------------------------------------
Non-current liabilities
Long-term debt, less current portion 1,841 1,917
Deferred income taxes 88 88
Postretirement healthcare and postemployment
benefit obligations 7,423 7,423
- ----------------------------------------------------------------------------
Total liabilities 125,435 151,386
- ----------------------------------------------------------------------------
Stockholders' Equity
Preferred stock, par value $0.01; 2,000,000 shares
authorized; none issued or outstanding
Common stock, par value $0.01; 20,000,000 shares
authorized; 8,962,767 issued and outstanding at
March 31, 1996 and 8,951,154 at December 31, 1995 1,895 1,895
Paid-in capital 13,059 13,085
Accumulated translation adjustment (4,329) (4,446)
Unearned compensation - (400)
Additional pension liability (344) (344)
Retained earnings 73,185 73,668
- ----------------------------------------------------------------------------
Total stockholders' equity 83,466 83,458
- ----------------------------------------------------------------------------
Total liabilities and stockholders' equity $208,901 $234,844
============================================================================
See accompanying notes
Page 2
<PAGE>
Guy F. Atkinson Company of California
Consolidated Statements of Income
(in thousands of dollars except share and per share amounts)
Quarters ended March 31, 1996 1995
(unaudited)
Revenue $99,185 $89,738
Cost of revenue 90,560 82,800
- ----------------------------------------------------------------------------
Gross margin 8,625 6,938
General and administrative expenses 9,878 8,805
- ----------------------------------------------------------------------------
(Loss) from operations (1,253) (1,867)
Other income (expense)
Interest income 854 1,046
Interest expense (157) (201)
Miscellaneous 622 84
- ----------------------------------------------------------------------------
Total other income (expense) 1,319 929
- ----------------------------------------------------------------------------
Income (loss) before income taxes 66 (938)
Provision for income taxes 549 49
- ----------------------------------------------------------------------------
Net (loss) ($483) ($987)
============================================================================
Net (loss) per share of common stock ($0.05) ($0.11)
============================================================================
Average number of shares of common stock and common
stock equivalents utilized in net (loss) per
share calculation 8,958,000 8,917,000
============================================================================
See accompanying notes
Page 3
<PAGE>
Guy F. Atkinson Company of California
Consolidated Statement of Cash Flows
(in thousands of dollars except share and per share amounts)
Quarters ended March 31, 1996 1995
(unaudited)
Operating activities
Net (loss) ($483) ($987)
Adjustments to reconcile net (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization 2,461 491
Deferred income taxes - 11
(Gain) on dispositions of property, plant and
equipment (1,850) (765)
Changes in operating assets and liabilities:
Accounts receivable (25,782) (11,092)
Inventories and unamortized costs on contracts (443) (3,962)
Investments in joint ventures (383) 4,029
Other current assets (602) 147
Accounts payable and accrued expenses (23,436) 9,605
Accrued income taxes (887) (1,552)
Billings in excess of costs and estimated
earnings, net 13,446 15,240
Other, net 206 6
- ----------------------------------------------------------------------------
Net cash provided by (used in) operating activities (37,753) 11,171
- ----------------------------------------------------------------------------
Cash flows from investing activities:
Property, plant and equipment expenditures (2,687) (767)
Proceeds from dispositions of property, plant
and equipment 2,909 725
Increase (decrease) in other assets, net (24) 634
- ----------------------------------------------------------------------------
Net cash provided by investing activities 198 592
- ----------------------------------------------------------------------------
Cash flows from financing activities:
Short-term borrowings 5,000 -
Long-term debt repayments (127) (141)
Common stock issuance related to stock option
awards 374 -
Cash dividends paid - (17,835)
- ----------------------------------------------------------------------------
Net cash provided by (used in) financing activities 5,247 (17,976)
- ----------------------------------------------------------------------------
Effect of exchange rate changes on cash (114) 60
- ----------------------------------------------------------------------------
Net (decrease) in cash and short-term investments ($32,422) ($6,153)
============================================================================
Supplementary information:
Cash paid during the year for:
Interest $160 $273
Federal, foreign and state income taxes 168 2,547
============================================================================
See accompanying notes
Page 4
<PAGE>
Guy F. Atkinson Company of California
Notes to Consolidated Financial Statements
(in thousands of dollars except share and per share amounts)
Financial Statement Content
The information contained herein reflects all adjustments which are, in the
opinion of management, necessary for a fair presentation of results for the
interim periods.
Inventories and Unamortized Costs on Contracts
March 31, December 31,
The major classifications of inventory are as 1996 1995
follows: (unaudited)
Construction materials, parts and supplies $2,605 $2,812
Unamortized costs on contracts 18,830 18,175
- ----------------------------------------------------------------------------
$21,435 $20,987
============================================================================
Stock Options and Warrants
At March 31, 1996, the company had options outstanding with respect to
947,358 shares of common stock at exercise prices ranging from $6.55 to
$11.95 per share. The right to exercise these options vests progressively
over a four year period commencing with the date of issue and expiring ten
years from the date of issue. In addition, there were stock warrants
outstanding for 387,500 shares of common stock with an exercise price of
$7.00 expiring in 1998.
Earnings Per Share
Net primary earnings per share of common and common stock equivalents are
calculated using the weighted average number of common shares outstanding,
plus the net additional number of shares which would be issuable upon the
execise of stock options and warrants, assuming that the company used the
proceeds received to repurchase outstanding shares at market prices.
Litigation and Contingencies
On March 7, 1995, a complaint asserting breach of contract and other
wrongdoing in connection with the company's sale of its manufacturing
subsidiary, Lake Center Industries, Inc., was filed against the company
and its financial advisor by an unsuccessful bidder for Lake Center. The
plantiffs allege they have suffered actual damages of $290 in connection
with preparing their bid and also seek to recover $7,000 on a theory of
unjust enrichment, together with an additional $10,000 in punitive damages.
The company will vigorously defend this suit, which it believes to be without
merit and further believes that the outcome will not have a material adverse
effect on its financial condition.
Page 5
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations (all dollar amounts are in thousands unless otherwise
stated)
Revenue: The company's revenue of $99,185 increased by 11% in the
first quarter of 1996 compared with $89,738 in the first quarter of 1995. The
increase in revenue was attributable to the substantial volume of new contract
awards in 1995 that is now starting to make a significant contribution to
revenue. The backlog of uncompleted contracts amounted to $615,293 at March
31, 1996, representing an increase of 45% over the March 31, 1995 backlog of
$424,883.
Gross margin: The company's gross margin of $8,625 increased by 24% in
the first quarter of 1996 over the corresponding $6,938 in 1995. The
percentage of gross margin to revenue increased to 8.7% in 1996 from 7.7% in
1995, reflecting a more profitable mix of construction contracts in 1996, as
the company continues to focus on higher margin construction opportunities.
General and administrative expense: General and administrative
expenses of $9,878 in 1996 were 12% higher than the corresponding figure of
$8,805 in 1995 due to ongoing business development activities in both the
construction and water and wastewater treatment businesses, combined with
increased international market development.
Page 6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations, continued
Interest income: Interest income in the first quarter of 1996 declined
to $854 from $1,046 in the corresponding period of 1995 due to reduced cash
and short-term investment balances in 1996.
Interest expense: Interest expense of $157 in the first quarter of
1996, was essentially unchanged from the $201 in the first quarter of 1995.
Miscellaneous: Miscellaneous income of $622 in 1996 was primarily
attributable to gains on property dispositions.
Income taxes and net income: The company recorded income before taxes
of $66 in 1996, compared with a loss of $938 in 1995. Income taxes gave rise
to an expense of $549 in 1996 compared with $49 in 1995. In each year, income
tax expense was attributable to state and foreign income taxes, with higher
foreign taxes accounting for the increase in 1996 over 1995.
The net loss for the first quarter of 1996 amounted to $483, compared
with a net loss of $987 in 1995.
Page 7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations, continued
Liquidity and Capital Resources
The company's operating activities utilized cash of $37,753 in the first
quarter of 1996, compared with $11,171 of cash generated in the first quarter
of 1995. The negative operating cash flow in 1996 is due to the start-up cash
requirements of new construction projects commencing in the first quarter of
1996, as well as the ongoing cash requirements of existing construction
projects which are expected to return cash to the company in the latter part
of 1996.
The company has a two-year $40 million syndicated line of credit which
expires on June 30, 1997. The availability of this line of credit is reduced
by any letters of credit which may be outstanding under the lines. At March
31, 1996, the company had $5,000 in outstanding borrowings and $6,548 in
outstanding letters of credit.
The company believes that its cash and short-term investments, together
with lines of credit and funds generated from operations and other sources
will be adequate to cover foreseeable future requirements.
Page 8
<PAGE>
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Shareholders of the company (the "Annual Meeting")
was held on April 18, 1996. The only matter submitted to the shareholders was
the election of directors. The table below sets forth the total number of
votes for and withheld as to each of the eight candidates for director, all of
whom were elected at the Annual Meeting.
Broker
Nominee For Withheld Against Abstain Non-Votes
Jack J. Agresti 6,462,721 72,194 N/A N/A N/A
Duane E. Atkinson 6,523,944 10,971 N/A N/A N/A
Ray N. Atkinson 6,516,472 18,443 N/A N/A N/A
William E. Burch 6,516,875 18 040 N/A N/A N/A
J. Phillip Frazier 6,516,875 18,040 N/A N/A N/A
Donald R. Kayser 6,516,875 18,040 N/A N/A N/A
Ross J. Turner 6,516,875 18,040 N/A N/A N/A
John F. Whitsett 6,516,875 18,040 N/A N/A N/A
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit No. Description
27.1 Financial Data Schedule
(b) No reports on Form 8-K were filed during the period.
Page 9
<PAGE>
GUY F. ATKINSON COMPANY OF CALIFORNIA
AND CONSOLIDATED SUBSIDIARIES
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant had duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
GUY F. ATKINSON COMPANY
OF CALIFORNIA
s/ Herbert D. Montgomery
Senior Vice President,
Chief Financial Officer
and Treasurer
May 14, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 5,459
<SECURITIES> 1,923
<RECEIVABLES> 102,033
<ALLOWANCES> 0
<INVENTORY> 21,435
<CURRENT-ASSETS> 178,107
<PP&E> 54,728
<DEPRECIATION> 26,311
<TOTAL-ASSETS> 208,901
<CURRENT-LIABILITIES> 116,083
<BONDS> 1,841
0
0
<COMMON> 1,895
<OTHER-SE> 81,571
<TOTAL-LIABILITY-AND-EQUITY> 208,901
<SALES> 0
<TOTAL-REVENUES> 99,185
<CGS> 0
<TOTAL-COSTS> 90,560
<OTHER-EXPENSES> 9,878
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 157
<INCOME-PRETAX> 66
<INCOME-TAX> 549
<INCOME-CONTINUING> (483)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (483)
<EPS-PRIMARY> (0.05)
<EPS-DILUTED> 0
</TABLE>
