<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------------------
FORM 10-Q
(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, 1998
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Commission File Number 1-12282
CORRPRO COMPANIES, INC.
(Exact name of registrant as specified in its charter)
OHIO 34-1422570
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1090 ENTERPRISE DRIVE, MEDINA, OHIO 44256
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (330) 723-5082
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
----- -----
As of August 10, 1998, 7,878,933 Common Shares, without par value, were
outstanding.
1
<PAGE> 2
CORRPRO COMPANIES, INC.
-----------------------
INDEX
-----
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I. FINANCIAL INFORMATION
- ------------------------------
ITEM 1. Financial Statements
Consolidated Balance Sheets 3
Consolidated Statements of Income 4
Consolidated Statements of Cash Flows 5
Consolidated Statements of Shareholders' Equity 6
Notes to the Consolidated Financial Statements 7-10
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11-14
PART II. OTHER INFORMATION
- ---------------------------
ITEM 2. Changes in Securities and Use of Proceeds 15
ITEM 6. Exhibits and Reports on Form 8-K 15
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
- ------------------------------
ITEM 1. FINANCIAL STATEMENTS
- -----------------------------
CORRPRO COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
June 30, March 31,
1998 1998
------------ -------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 4,228 $ 8,687
Accounts receivable, net 43,146 38,733
Inventories 25,217 24,458
Costs and estimated earnings in excess of billings
on uncompleted contracts 3,799 2,879
Prepaid expenses and other 4,308 4,436
Net assets held for sale 10,286 10,662
---------- ----------
Total current assets 90,984 89,855
---------- ----------
Property and Equipment, net 12,652 12,510
Other Assets:
Goodwill 27,651 27,315
Patents and other intangibles 1,475 1,757
Other 5,918 4,838
---------- ----------
Total other assets 35,044 33,910
---------- ----------
$ 138,680 $ 136,275
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term borrowings and current portion of long-term debt $ 630 $ 683
Accounts payable 15,001 17,319
Accrued liabilities and other 9,447 10,113
---------- ----------
Total current liabilities 25,078 28,115
---------- ----------
Long-Term Debt, net of current portion 22,604 17,695
Senior Notes 30,000 30,000
Deferred Income Taxes 2,045 2,035
Commitments and Contingencies -- --
Minority Interest 459 469
Shareholders Equity:
Serial preferred shares -- --
Common shares 2,246 2,245
Additional paid-in capital 50,730 50,708
Accumulated earnings 10,578 8,664
---------- ----------
63,554 61,617
Accumulated other comprehensive income (775) 482
Common shares in treasury, at cost (4,285) (4,138)
---------- ----------
Total shareholders equity 58,494 57,961
---------- ----------
$ 138,680 $ 136,275
========== ==========
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an integral part
of these balance sheets.
3
<PAGE> 4
CORRPRO COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
For the Three Months Ended
June 30
-----------------------
1998 1997
---------- -----------
<S> <C> <C>
Revenues:
Engineering & construction services $ 24,825 $ 19,425
Product sales 19,903 16,125
---------- ----------
44,728 35,550
Cost of sales:
Engineering & construction services 15,948 13,122
Product sales 15,059 11,837
---------- ----------
31,007 24,959
---------- ----------
Gross profit 13,721 10,591
Selling, general & administrative expenses 9,653 7,691
---------- ----------
Operating income 4,068 2,900
Interest expense 880 362
---------- ----------
Income before income taxes 3,188 2,538
Provision for income taxes 1,274 1,015
---------- ----------
Net income $ 1,914 $ 1,523
========== ==========
Earnings per share -
Basic $ 0.24 $ 0.18
Diluted $ 0.23 $ 0.18
Weighted average shares -
Basic 7,942 8,247
Diluted 8,369 8,450
</TABLE>
The accompanying notes to Consolidated Financial Statements are an integral
part of these statements.
4
<PAGE> 5
CORRPRO COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
Three Months Ended
June 30
-------------------------
1998 1997
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,914 $ 1,523
Adjustments to reconcile net income to net cash
used for continuing operations:
Depreciation and amortization 1,032 755
Deferred income taxes 13 1,146
Gain on sale of fixed assets 7 173
Minority interest (3) (17)
Changes in assets and liabilities:
Accounts receivable (4,814) (713)
Inventories (992) (3,037)
Contracts in progress, net (851) (1,029)
Prepaid expenses and other 92 (1,447)
Accounts payable and accrued expenses (3,189) 234
Other assets (1,862) (603)
---------- ----------
Total adjustments (10,567) (4,538)
---------- ----------
Net cash used for continuing operations (8,653) (3,015)
Net cash provided by discontinued operations 376 1,227
---------- ----------
Net cash used for operating activities (8,277) (1,788)
---------- ----------
Cash flows from investing activities:
Additions to property and equipment (861) (616)
Disposal of property and equipment 62 122
Acquisitions, net of cash acquired (273) --
---------- ----------
Net cash used for investing activities (1,072) (494)
---------- ----------
Cash flows from financing activities:
Proceeds from long-term debt 5,050 2,552
Repayment of long-term debt (93) (232)
Repayment of short-term borrowings, net (103) (232)
Net proceeds from issuance of Common Shares 15 --
---------- ----------
Net cash provided by financing activities 4,869 2,088
---------- ----------
Effect of changes in foreign currency exchange rates 21 553
Net increase (decrease) in cash (4,459) 359
Cash and cash equivalents at beginning of period 8,687 3,233
---------- ----------
Cash and cash equivalents at end of period $ 4,228 $ 3,592
========== ==========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period
for:
Income taxes $ 711 $ 762
Interest $ 460 $ 493
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.
5
<PAGE> 6
CORRPRO COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Accumulated
Common Other Common
Serial Shares Additional Compre- Shares
Preferred ($0.26 Paid-In- Accumulated hensive in
Shares Stated Value) Capital Earnings Income Treasury* Total
------ ------------- ------- -------- ------ --------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
March 31, 1998 $ -- $ 2,245 $ 50,708 $ 8,664 $ 482 $ (4,138) $ 57,961
Net income -- -- -- 1,914 -- -- 1,914
Exercise of 3 stock
options -- 1 22 -- -- -- 23
Repurchase of 22
shares of common
stock -- -- -- -- -- (272) (272)
Issuance of 10 shares -- -- -- -- -- 125 125
Cumulative translation
adjustment -- -- -- -- (1,257) -- (1,257)
---------- ---------- ---------- ---------- ---------- ---------- ----------
June 30, 1998 $ -- $ 2,246 $ 50,730 $ 10,578 $ (775) $ (4,285) $ 58,494
========== ========== ========== ========== ========== ========== ==========
</TABLE>
* Shares held in treasury totaled 473 at March 31, 1998 and 485 at June 30,
1998.
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
6
<PAGE> 7
CORRPRO COMPANIES, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
NOTE 1 - INTERIM FINANCIAL STATEMENTS
The accompanying interim consolidated financial statements include the
accounts of Corrpro Companies, Inc. and subsidiaries (the "Company"). All
significant intercompany accounts and transactions have been eliminated in
consolidation. Certain fiscal 1998 amounts have been reclassified to conform
with the fiscal 1999 presentation.
The information furnished in the accompanying interim consolidated
financial statements has not been audited by independent accountants; however,
in the opinion of management, the interim consolidated financial statements
include all adjustments, consisting only of normal and recurring adjustments,
necessary for a fair presentation of the consolidated financial position,
results of operations and cash flows for the interim periods presented. The
results of operations for the three months ended June 30, 1998 are not
necessarily indicative of the results that may be expected for the fiscal year
ending March 31, 1999 or any other period. The interim consolidated financial
statements should be read in conjunction with the Company's Annual Report on
Form 10-K for the fiscal year ended March 31, 1998.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
NOTE 2 - ACQUISITIONS
Effective July 1, 1997, the Company acquired all the outstanding shares
of capital stock of Cathodic Protection Services Company ("CPS"). The purchase
price was $15,023 in cash which included the repayment in full of certain
indebtedness and management fees owed by CPS to its senior lenders and its
former stockholders as well as certain costs directly related to the
acquisition.
CPS provides materials and services for the evaluation, design,
installation and maintenance of cathodic protection systems.
The acquisition of CPS has been accounted for using the purchase method
of accounting. Accordingly, the purchase price has been allocated to the net
assets acquired based upon their fair market values at the date of acquisition.
The excess of the purchase price over the fair value of net assets acquired
totaled $7,600 and is being amortized over 40 years on a straight-line basis.
7
<PAGE> 8
The results of CPS have been included in the Company's results since
the effective date of the acquisition. Pro forma results of operations have not
been presented as the effect of the acquisition on the Company's financial
statements were not material.
NOTE 3 - INVENTORY
<TABLE>
<CAPTION>
June 30, March 31,
1998 1998
---- ----
<S> <C> <C>
Inventories consist of the following:
Component parts and raw materials $ 10,165 $ 10,007
Work in process 1,927 1,908
Finished goods 13,125 12,543
---------- ----------
$ 25,217 $ 24,458
========== ==========
</TABLE>
NOTE 4 - PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
June 30, March 31,
1998 1998
---- ----
<S> <C> <C>
Property, plant and equipment consists of the following:
Land $ 565 $ 547
Buildings and improvements 4,373 4,545
Equipment, furniture and fixtures 16,513 15,696
---------- ----------
21,451 20,788
Less: Accumulated depreciation (8,799) (8,278)
---------- ----------
$ 12,652 $ 12,510
========== ==========
</TABLE>
NOTE 5 - EARNINGS PER SHARE
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per
Share." The Statement replaced the presentation of primary earnings per share
(EPS) with the presentation of basic EPS, and replaced fully diluted EPS with
diluted EPS. As required, the Company adopted SFAS 128 for the quarter ending
December 31, 1997. Fiscal 1998 results have been restated to conform with SFAS
128.
Basic EPS is computed by dividing net income for the period by the
weighted average number of shares of common shares outstanding for the period
which were, 7,942 and 8,247, for the three months ending June 30, 1998 and 1997,
respectively. Diluted EPS for the period has been determined by dividing net
income by the weighted average number of shares of common shares and potential
common shares outstanding for the period which were, 8,369 and 8,450, for the
three months ending June 30, 1998 and 1997, respectively. Stock options are the
only potential common shares and are considered in the Company's diluted EPS
calculation. Potential common shares are computed using the treasury stock
method.
8
<PAGE> 9
Weighted average shares reflects the five-for-four stock split that was
effected June 19, 1998. See Note 7.
NOTE 6 - STOCK PLANS
The Company granted options to purchase 88 Common Shares at exercise
prices ranging from $11.85 to $12.80 per share under the 1997 Long-Term
Incentive Plan of Corrpro Companies, Inc. (the "1997 Option Plan") during the
three months ended June 30, 1998. Also during such period, there were 3 options
exercised at exercise prices ranging from $1.86 to $6.49 per share.
On April 30, 1998, the Company adopted, subject to shareholder
approval, an amendment to the 1997 Option Plan increasing the number of shares
available for issuance by 300. Shareholder approval for such amendment was
obtained on July 22, 1998.
NOTE 7 - SHAREHOLDERS' EQUITY
On April 30, 1998, the Company's Board of Directors approved, subject
to shareholder approval, an amendment to the Company's Articles of Incorporation
to increase from 12,000 to 40,000 the maximum number of Common Shares that the
Company is authorized to issue. Shareholder approval for such amendment was
obtained on July 22, 1998.
On May 19, 1998, the Company announced that its Board of Directors
approved a five-for-four stock split of the Company's common shares. The stock
split was effected as a stock dividend payable on June 19, 1998 to shareholders
of record as of June 5, 1998. The stock split increased outstanding shares by
approximately 1.6 million to approximately 7.9 million. All share amounts
contained in the consolidated statements and notes thereto have been adjusted to
reflect the stock split.
NOTE 8 - REPORTING COMPREHENSIVE INCOME
In June 1997, the Financial Accounting Standards Board issued SFAS No.
130, "Reporting Comprehensive Income". The Company was required to adopt SFAS
130 for the quarter ending June 30, 1998. All periods presented have been
restated to conform with SFAS 130.
Comprehensive income includes net income and other revenues, expenses,
gains, and losses that are excluded from net income but included as a component
of total shareholders' equity. Comprehensive income for the quarters ended June
30, 1998 and June 30, 1997 was ($1,257) and $296, respectively, which is
comprised of the effect of foreign currency translation adjustments in
accordance with SFAS No. 52, "Foreign Currency Translation". The accumulated
balance of foreign currency translation adjustments, excluded from net income,
is presented in the Consolidated Balance Sheet and Statement of Shareholders'
Equity as "Accumulated other comprehensive income".
9
<PAGE> 10
NOTE 9 - NET ASSETS HELD FOR SALE
During March 1997, the Company adopted a formal plan to put its
Corrtherm operation for sale. Corrtherm is reported as a discontinued operation
and its net assets and results of operations are reported separately in the
consolidated financial statements.
Net assets held for sale relating to Corrtherm at June 30, 1998, before
adjustment for the estimated loss on disposal, consisted of working capital of
$4,057, net property and equipment of $6,455 and other assets of $2,897. These
amounts are offset by a reserve for the estimated loss on disposal and
provisions for other estimated costs to be incurred in connection with the
disposal. The amounts the Company will ultimately receive could differ from the
estimates.
The Company allocated interest of $0.2 million for both the three
months ended June 30, 1998 and 1997 to Corrtherm based on the estimated proceeds
to be realized from the divestiture. Revenues from Corrtherm, which are excluded
from consolidated revenues, totaled $1.6 million for the three months ended June
30, 1998 and $3.2 million for the three months ended June 30, 1997. The revenues
included intercompany sales of $0.9 million and $0.7 million for the three
months ended June 30, 1998 and 1997, respectively.
NOTE 10 - SUBSEQUENT EVENTS
Acquisition of Wilson Walton Australia
- --------------------------------------
On July 9, 1998, the Company acquired certain assets and assumed
certain liabilities of the group of companies referred to as Wilson Walton
Australia ("WWA"). The purchase price was $3.7 million in an all cash
transaction. The purchase agreement provides for a post-closing purchase price
adjustment. The WWA acquisition will be accounted for as a purchase effective
July 1, 1998.
WWA provides products and services for the evaluation, design,
installation and maintenance of corrosion protection systems in Australia, New
Zealand and Papua New Guinea.
Acquisition of BASCO
- --------------------
On August 12, 1998, the Company acquired all the outstanding shares of
capital stock of the BASCO group of companies ("BASCO"). The purchase price was
$3.3 million in an all cash transaction. The purchase agreement provides for
post-closing purchase price adjustments. The BASCO acquisition will be accounted
for as a purchase effective August 1, 1998.
BASCO, which is based in the United Kingdom outside London, is a
provider of corrosion protection engineering services, materials and equipment
primarily in Europe.
10
<PAGE> 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
A. RESULTS OF OPERATIONS - THREE MONTHS ENDED JUNE 30, 1998 COMPARED TO THREE
MONTHS ENDED JUNE 30, 1997
Revenues
- --------
Revenues for the fiscal 1999 first quarter totaled $44.7 million, an
increase of $9.2 million or 25.8% over the fiscal 1998 first quarter. The
current year revenues include the results of Cathodic Protection Services (CPS),
which was acquired effective July 1, 1997. The results of CPS are no longer
separable due to the integration of CPS's operations. Excluding the effect of
the CPS acquisition, management estimates that revenues increased approximately
7%.
During the fiscal 1999 first quarter, approximately 56% of the
Company's revenues related to services and 44% related to product sales. During
the fiscal 1998 first quarter, approximately 55% of the Company's revenues
related to services and 45% related to product sales.
Service revenues for the first quarter of fiscal 1999 increased 27.8%
as a result of the CPS acquisition as well as growth at the Company's domestic
core businesses and its Middle East and European operations.
Product revenues for the quarter increased $3.8 million or 23.4%. The
increase is largely the result of the CPS acquisition.
Gross Profit
- ------------
The Company's gross profit for the fiscal 1999 first quarter totaled
$13.7 million (or 30.7% of revenues) compared to $10.6 million (or 29.8% of
revenues) for the fiscal 1998 first quarter. This represents an increase in
gross profit dollars of 29.6%.
Gross margins on service revenues for the fiscal 1999 first quarter
grew to 35.8% of revenues compared to 32.4% of revenues in the fiscal 1998 first
quarter. The improvement in service margins was the result of a more profitable
business mix in the current-year period. In addition, service margins benefited
from higher margins at the Company's European operations.
Gross margins on product revenues for the fiscal 1999 first quarter
were 24.3% of revenues versus 26.6% of revenues in the fiscal 1998 first
quarter. The lower product margins relate primarily to the Company's European
operations.
Selling, General and Administrative Expense
- -------------------------------------------
Selling, general and administrative ("SG&A") expense for the fiscal
1999 first quarter totaled $9.7 million (or 21.6% of revenues) compared to $7.7
million (or 21.6% of revenues) for the fiscal 1998 first quarter, an increase of
25.5%. The increase related to the acquisition of CPS
11
<PAGE> 12
as well as higher levels of business activity at the Company's domestic core
businesses.
Operating Income
- ----------------
Operating income for the fiscal 1999 first quarter totaled $4.1 million
compared to $2.9 million for the fiscal 1998 first quarter, an increase of
40.3%.
Interest Expense
- ----------------
Interest expense totaled $0.9 million for the fiscal 1999 first quarter
compared to $0.4 million for the fiscal 1998 first quarter, an increase of $0.5
million or 143.1%. The increase is due primarily to the acquisition of CPS.
Income Tax Provision
- --------------------
The Company recorded a provision for income taxes of $1.3 million for
the fiscal 1999 first quarter compared to a provision of $1.0 million for the
fiscal 1998 first quarter. The effective tax rate was 40.0% for both the fiscal
1999 and fiscal 1998 first quarters.
Net Income
- ----------
The Company generated net income of $1.9 million for the fiscal 1999
first quarter compared to net income of $1.5 million for the fiscal 1998 first
quarter, an increase of 25.7%.
B. LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1998, the Company had working capital (excluding net assets
held for sale) of $55.6 million compared to $51.1 million at March 31, 1998, an
increase of $4.5 million or 8.9%. The increase is primarily the result of
seasonally higher levels of business activity during the first quarter as
compared to the prior fiscal year fourth quarter offset by a $4.5 million
decrease in cash. Based on its historical seasonality trends, the Company
expects working capital levels to continue to increase during the fiscal 1999
second quarter.
During the three months ended June 30, 1998, cash used for operating
activities totaled $8.3 million. This is primarily the result of the increase in
working capital discussed above. Cash used for investing activities during the
three months ended June 30, 1998 totaled $1.1 million and primarily represented
net capital expenditures. Cash provided by financing activities during the three
months ended June 30, 1998 totaled $4.9 million.
The Company has domestic bank credit facility consisting of a $40
million revolver that expires in 2002. In addition, the Company has various
smaller lines of credit with foreign banks which totaled approximately $4.5
million. Total availability under the domestic and foreign credit facilities at
June 30, 1998 was approximately $22 million. The Company was in compliance with
all of its debt covenants at June 30, 1998.
12
<PAGE> 13
The Company used proceeds from its domestic and foreign credit
facilities along with cash on hand to fund the WWA and BASCO acquisitions that
were completed subsequent to June 30, 1998.
The Company believes that cash generated by operations and amounts
available under its domestic bank credit facility and foreign lines of credit
will be sufficient to satisfy the Company's liquidity requirements through at
least fiscal 1999.
C. EFFECT OF INFLATION AND FOREIGN CURRENCY TRANSLATION
The Company does not believe that inflation has had a significant
effect on the Company's results of operations for the periods presented.
The Company has not been significantly affected by currency
fluctuations or foreign exchange restrictions. Management believes that these
risks resulting from the Company's increased foreign sales are manageable.
D. YEAR 2000
The Company has developed plans to address possible exposures related
to the Year 2000 issue. The Company is considering the effect of Year 2000
issues on the services and products the Company provides, the processing
capabilities of the Company's computers and other internal information systems,
non-informational systems which effect the Company's operational capabilities,
and the key sources of supply of products and services to the Company. In
addition, the Company is addressing the status of its significant customers'
Year 2000 compliance.
The Company has identified on a preliminary basis those products and
services which could experience Year 2000 issues and expects to complete its
internal review of its services and products by the fourth quarter of fiscal
1999.
The Company is currently upgrading the software utilized by the
majority of its U.S. operations. The upgrade is being implemented for business
reasons in addition to resolving certain Year 2000 issues. Maintenance and
modification costs including costs attributable to the Year 2000 issue will be
expensed as incurred, while the costs of new information technology will be
capitalized and amortized in accordance with Company policy and generally
accepted accounting principles. The total cost of upgrading the software,
including the cost of Year 2000 compliance which is not separately
determinable, is expected to range from $500,000 to $700,000. Project
completion is planned for the fourth quarter of fiscal 1999.
The Company is in the process of assessing its non-informational
systems for Year 2000 compliance and expects to complete such assessement by
the fourth quarter of fiscal 1999. In addition, the Company is in the process
of communicating with its key suppliers, vendors and significant customers and
requesting information regarding the status of their own Year 2000 compliance.
The target date for this review of external suppliers, vendors and customers is
December 31, 1998. While the Company expects success in this cooperative
effort, such success depends on the actions of such third parties.
This information contains certain statements regarding the Year 2000
that constitute forward looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. The Company expects that it will be
able to modify or replace the various systems effected by the Year 2000 issue
in time to avoid any material disruption to its operations; however, unforseen
developments or delays could cause this expectation to change. Also, in the
event that any of the Company's significant suppliers or customers do not
successfully achieve timely Year 2000 compliance, the Company's operations
could be adversely affected. Management is keeping the Board of Directors
informed as to the status of the Company's Year 2000 related activities.
13
<PAGE> 14
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
On April 20, 1998 and June 8, 1998, the Company, in exempt
transactions under Regulation D of the Securities Act, issued 7 and 3 of its
Common Shares, respectively, in connection with an immaterial acquisition and
under an incentive compensation plan.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibit 27.1 Financial Data Schedule.
B. There were no reports on Form 8-K filed during the quarter.
14
<PAGE> 15
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.
CORRPRO COMPANIES, INC.
(Registrant)
Date: August 14, 1998 /s/ Joseph W. Rog
------------------- -----------------------------
Joseph W. Rog
Chairman of the Board, President
and Chief Executive Officer
/s/ Neal R. Restivo
------------------------------
Neal R. Restivo
Executive Vice President and
Chief Financial Officer
(principal financial and
accounting officer)
15
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000907072
<NAME> CORRPRO COMPANIES, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-START> APR-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 4,228
<SECURITIES> 0
<RECEIVABLES> 45,639
<ALLOWANCES> (2,493)
<INVENTORY> 25,217
<CURRENT-ASSETS> 90,984
<PP&E> 21,451
<DEPRECIATION> (8,799)
<TOTAL-ASSETS> 138,680
<CURRENT-LIABILITIES> 25,078
<BONDS> 52,604
0
0
<COMMON> 2,246
<OTHER-SE> 56,248
<TOTAL-LIABILITY-AND-EQUITY> 138,680
<SALES> 44,728
<TOTAL-REVENUES> 44,728
<CGS> 31,007
<TOTAL-COSTS> 9,653
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 880
<INCOME-PRETAX> 3,188
<INCOME-TAX> 1,274
<INCOME-CONTINUING> 1,914
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,914
<EPS-PRIMARY> 0.24
<EPS-DILUTED> 0.23
</TABLE>
