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U.S. Securities & Exchange Commission
Washington, D.C. 20549
Form 10-QSB/A - Amendment No. 1
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
for the transition period.....................to....................
Commission file number.................000-24470
NESCO, Inc.
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(Exact name of small business issuer as specified in its charter)
Oklahoma 73-1296420
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
12331 East 60th Street, Tulsa, Oklahoma 74l46
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(Address of principal executive offices)
(918)-250-2227
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(Issuer's telephone number)
Check whether the issuer (1) filed all reports to be filed by Section 13 or
15(d) of the Exchange Act during the past 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________.
State the number of shares outstanding of each of the issuer's classes of common
equity, as of July 31, 2000:
Number of shares
Title of Class Outstanding
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Common Stock, $.01 Par Value 9,225,855
Transitional Small Business Issuer Format (Check one): Yes____No__X__
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NESCO, INC.
TABLE OF CONTENTS
Page
Part I - Financial Information
Financial Information:
Item 1. Financial Statements
Consolidated Balance Sheet
June 30, 2000 3
Consolidated Statements of Income
Three Months Ended June 30, 2000 and 1999 4
Consolidated Statements of Income
Six Months Ended June 30, 2000 and 1999 5
Consolidated Statements of Cash Flows
Six Months Ended June 30, 2000 and 1999 6
Notes to Consolidated Financial Statements 7
Item 2.
Management's Discussion and Analysis of the
Financial Condition and Results of Operation 9
Part II
Other Information:
Item 2. Changes in Securities and Use of Proceeds 13
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
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NESCO, INC.
CONSOLIDATED BALANCE SHEET
June 30, 2000
(In Thousands)
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
<S> <C>
Current assets:
Cash $ 377
Accounts Receivable 13,644
Cost in excess of billings and estimated earnings on
uncompleted contracts 3,386
Materials and Supplies 2,362
Prepaid Expenses 174
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Total current assets 19,943
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Property and equipment, at cost 8,887
Less accumulated depreciation (2,998)
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Property and equipment, net 5,889
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Other assets 80
-------
Lease contract agreements 3,207
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Intangible cost 6,019
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Total assets $35,138
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long term obligations
and revolving line of credit $ 1,681
Accounts payable 2,411
Accrued income taxes and liabilities 2,703
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Total current liabilities 6,795
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Long-term obligations 18,678
Deferred income taxes 417
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Total Liabilities 25,890
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Shareholders' equity:
Preferred stock: 1,000,000 shares authorized;
none issued
Common stock, par value $.01; authorized 20,000,000 shares;
issued 9,388,643 shares, including treasury
shares 94
Additional paid-in capital 4,139
Retained Earnings 5,341
Common stock in Treasury, at cost, 162,788 shares (326)
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Total shareholders' equity 9,248
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Total liabilities and shareholders' equity $35,138
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The accompanying notes are an integral part of the financial statements.
</TABLE>
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NESCO, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED JUNE 30, 2000 AND 1999
(In thousands except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
------ ------
<S> <C> <C>
Revenues $9,441 $6,364
Costs and Expenses 5,694 4,091
Selling, general and administrative expenses 1,907 1,610
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Income from operations 1,840 663
Other income 46 87
Interest expense 386 136
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Income before provision for income taxes 1,500 614
Provision for income taxes 589 237
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Net Income $ 911 $ 377
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Basic Net Income per share $ 0.10 $ 0.04
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Diluted Net Income per share $ 0.10 $ 0.04
====== ======
</TABLE>
The accompanying notes are an integral part of the financial statements.
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NESCO, INC.
CONSOLIDATED STATEMENT OF INCOME
FOR SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(In thousands except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
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<S> <C> <C>
Revenues $18,972 $13,896
Cost and expenses 11,254 8,472
Selling, general and administrative expenses 3,658 3,197
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Income from operations 4,060 2,227
Other Income 85 144
Interest Expense 705 240
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Income before provision for income taxes 3,440 2,131
Provision for taxes on income 1,322 814
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Net Income $ 2,118 $ 1,317
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Basic Net Income per share $ 0.23 $ 0.14
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Diluted Net Income per share $ 0.22 $ 0.14
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</TABLE>
The accompanying notes are an integral part of the financial statements.
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NESCO, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(In thousands)
(Unaudited)
<TABLE>
2000 1999
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<S> <C> <C>
Operating activities
Net Income $ 2,118 $ 1,317
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 379 297
Change in:
Accounts receivable (7,241) (542)
Cost and estimated earnings in excess of
billings on uncompleted contracts (996) -
Materials and supplies (100) (317)
Prepaid expenses (15) (64)
Accounts payable (7) 799
Accrued income taxes and liabilities 1,903 (591)
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Net cash provided by (used in) operating activities (3,959) 899
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Investing activities
Business Acquisitions (3,178) (3,114)
Purchases of property, plant and equipment (1,070) (856)
Other (275) (152)
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Net cash provided by (used in) investing activities (4,523) (4,122)
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Financing activities:
Proceeds from notes payable and long-term obligations 12,156 7,032
Principal payments on notes and long term obligations (3,926) (3,065)
Proceeds from sale (purchase) of treasury stock - (406)
Summit owners distributions net of tax - (430)
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Net cash provided by financing activities 8,230 3,130
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Decrease in cash (252) (92)
Cash, beginning of period 629 331
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Cash, end of period $ 377 $ 239
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</TABLE>
The accompanying notes are an integral part of the financial statements.
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NESCO, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. GENERAL
In the opinion of management, the accompanying condensed financial
statements contain all adjustments of a normal recurring nature necessary to
present fairly the financial position of the Company as of June 30, 2000 and
the results of operations and cash flows for the six month periods ended June
30, 2000 and 1999. Results of operations and cash flows are not necessarily
indicative of the results which will be achieved for the full year.
2. EARNINGS PER SHARE
Basic and diluted EPS for the six months ended June 30, 2000 and 1999, were
computed as follows:
<TABLE>
<CAPTION>
Six Months Ended June 30
------------------------
<S> <C> <C>
2000 1999
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Basic EPS Computation:
Net income $ 2,118 $ 1,317
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Weighted average shares outstanding 9,225,855 9,327,296
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Basic EPS $ .23 $ .14
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Diluted EPS Computation:
Net income $ 2,118 $ 1,317
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Weighted average shares outstanding 9,225,855 9,327,296
Incremental shares for assumed exercise
of securities:
Warrants 164,780 6,584
Options 92,341 3,761
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9,482,956 9,337,641
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Diluted EPS $ .22 $ .14
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</TABLE>
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3. SEGMENT INFORMATION
The Company's business segments have been grouped as follows:
<TABLE>
<CAPTION>
Thousands of Dollars
----------------------------------------
Inter-
Segment Pre-tax
Segment Sales Sales Income Assets
------- ----------------------------------------
<S> <C> <C> <C> <C>
2000
Fueling Installations $10,571 $2,146 $18,431
Environmental 7,353 2,708 11,356
Miscellaneous 1,048 160 168 3,094
Corporate Overhead (1,582) 2,254
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$ 18,972 $ 160 $ 3,440 $35,138
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1999
Fueling Installations $ 9,495 $ $1,682 $ 9,868
Environmental 3,899 1,247 6,366
Miscellaneous 502 694 238 1,404
Corporate Overhead (1,036) 2,244
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$ 13,896 $ 694 $2,131 $19,882
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</TABLE>
4. ACQUISITIONS IN 2000
On June 12, 2000, the Company acquired all of the issued and outstanding
shares of Hopkins Appraisal Services, Inc. for $3,000,000 cash. Hopkins
Appraisal Services, located in Independence, Missouri, is a provider of service
station and convenience store appraisals and feasibility studies to major oil
companies, major banks, and other smaller lenders and fueling facility owners.
On June 12, 2000, the Company entered into an agreement with David E. Hopkins
and Marie L. Hopkins to acquire the office building occupied by Hopkins
Appraisal Services, Inc. for 100,000 shares of NESCO common stock. The
acquisition was accounted for as a purchase.
The following information presents certain income statement data of the
separate companies for the periods preceding the acquisition:
<TABLE>
<CAPTION>
6 months ended
----------------
<S> <C> <C>
2000 1999
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Net Sales
NESCO $18,549 $13,896
Hopkins 1,723 1,750
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Total $20,272 $15,646
Net Income
NESCO $ 1,829 $ 1,317
Hopkins 259 110
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Total $ 2,088 $ 1,427
</TABLE>
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Until the merger, Hopkins was operated as a limited liability company which
is taxed as a partnership. Accordingly, Hopkins incurred no income taxes until
the merger. For purposes of presenting the combined operation of the Company
and Hopkins on a retroactive basis, Hopkin's income has been adjusted by $97,000
in 2000 and $67,000 in 1999 representing a provision for income taxes at an
effective 38% combined federal and state tax rate.
There were no material transactions between NESCO and Hopkins prior to the
merger. The effects of conforming Summit's accounting policies to those of
NESCO were not material.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
NESCO, Inc.
/s/ LARRY G. JOHNSON
Date: October 16, 2000 BY:____________________________________________________
LARRY G. JOHNSON, Vice President &
Secretary-Treasurer & Chief Financial Officer
(Authorized Officer and Principal Financial Officer)
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