<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
Commission file number 1-6627
<TABLE>
<CAPTION>
MICHAEL BAKER CORPORATION
--------------------------
(Exact name of registrant as specified in its charter)
<S> <C>
PENNSYLVANIA 25-0927646
------------ ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Airport Office Park, Building 3, 420 Rouser Road, Coraopolis, PA 15108
- ---------------------------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
(412) 269-6300
---------------
(Registrant's telephone number,
including area code)
</TABLE>
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
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
As of June 30, 1995:
--------------------
<S> <C>
Common Stock 7,004,612 shares
Series B Common Stock 1,358,940 shares
</TABLE>
<PAGE>
PART I
FORM 10-Q
PAGE 1
MICHAEL BAKER CORPORATION
PART I. FINANCIAL INFORMATION
The condensed consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although the Company believes that
the disclosures are adequate to make the information presented not
misleading. The statements reflect all adjustments which are, in the opinion
of management, necessary for a fair presentation of the results for the
periods presented. These condensed consolidated financial statements should
be read in conjunction with the consolidated financial statements and the
notes thereto, included in the Company's latest annual report and Form 10-K.
<PAGE>
PART I
FORM 10-Q
PAGE 2
<TABLE>
MICHAEL BAKER CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
==============================================================================
<CAPTION>
For the three months ended
-------------------------------
June 30, 1995 June 30, 1994
- ------------------------------------------------------------------------------
(In thousands, except per share amounts)
<S> <C> <C>
Total contract revenues $88,946 $109,995
Cost of work performed 78,158 99,196
- ------------------------------------------------------------------------------
Gross profit 10,788 10,799
General and administrative expenses 8,864 10,002
- ------------------------------------------------------------------------------
Income from operations 1,924 797
Other income/(expense):
Interest expense (134) (173)
Interest income 21 9
Other, net 41 (28)
- ------------------------------------------------------------------------------
Income before income taxes 1,852 605
Provision for income taxes 937 283
- ------------------------------------------------------------------------------
Net income $915 $322
==============================================================================
Net income per share $0.11 $0.04
==============================================================================
<FN>
The accompanying notes are an integral part of this financial statement.
</TABLE>
<PAGE>
PART I
FORM 10-Q
PAGE 3
<TABLE>
MICHAEL BAKER CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
==============================================================================
<CAPTION>
For the six months ended
--------------------------------
June 30, 1995 June 30, 1994
- ------------------------------------------------------------------------------
(In thousands, except per share amounts)
<S> <C> <C>
Total contract revenues $175,490 $203,878
Cost of work performed 154,722 182,946
- ------------------------------------------------------------------------------
Gross profit 20,768 20,932
General and administrative expenses 17,975 20,487
- ------------------------------------------------------------------------------
Income from operations 2,793 445
Other income/(expense):
Interest expense (258) (270)
Interest income 48 15
Other, net 99 (38)
- ------------------------------------------------------------------------------
Income before income taxes 2,682 152
Provision for income taxes 1,336 71
- ------------------------------------------------------------------------------
Net income $1,346 $81
==============================================================================
Net income per share $0.16 $0.01
==============================================================================
<FN>
The accompanying notes are an integral part of this financial statement.
</TABLE>
<PAGE>
PART I
FORM 10-Q
PAGE 4
<TABLE>
MICHAEL BAKER CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
==============================================================================
ASSETS June 30, 1995 Dec. 31, 1994
- ------------------------------------------------------------------------------
(In thousands)
<S> <C> <C>
Current Assets
Cash and cash equivalents $1,326 $3,605
Receivables
Trade 50,911 53,498
Retentions under contracts 11,662 16,120
Cost of contracts in progress, plus estimated
earnings recorded, less billings thereon 22,842 24,246
Prepaid expenses and other 10,803 10,670
- ------------------------------------------------------------------------------
Total current assets 97,544 108,139
- ------------------------------------------------------------------------------
Property, Plant and Equipment,
at cost
Land 693 693
Buildings and improvements 5,930 5,790
Equipment 29,057 27,619
- ------------------------------------------------------------------------------
35,680 34,102
Less - Accumulated depreciation 20,983 19,132
- ------------------------------------------------------------------------------
Total property, plant and equipment, net 14,697 14,970
- ------------------------------------------------------------------------------
Other Assets
Goodwill, net of accumulated amortization of
$1,504,000 and $1,359,000 at June 30, 1995
and December 31, 1994, respectively 4,812 4,958
Other intangible assets, net of accumulated
amortization of $3,373,000 and $3,100,000 at
June 30, 1995 and Dec. 31, 1994, respectively 2,740 3,013
Other assets 4,080 3,714
- ------------------------------------------------------------------------------
Total other assets 11,632 11,685
- ------------------------------------------------------------------------------
Total assets $123,873 $134,794
==============================================================================
<FN>
The accompanying notes are an integral part of this financial statement.
</TABLE>
<PAGE>
PART I
FORM 10-Q
PAGE 5
<TABLE>
MICHAEL BAKER CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
==============================================================================
LIABILITIES AND SHAREHOLDERS' INVESTMENT June 30, 1995 Dec. 31, 1994
- -------------------------------------------------------------------------------
(In thousands)
<S> <C> <C>
Current Liabilities
Current portion of long-term debt $12 $2,539
Accounts payable 31,160 42,876
Accrued employee compensation 6,458 4,224
Accrued insurance 7,464 8,167
Other accrued expenses 20,559 19,304
Excess of billings on contracts in progress
over cost and est. earnings recorded thereon 9,942 8,638
- ------------------------------------------------------------------------------
Total current liabilities 75,595 85,748
- ------------------------------------------------------------------------------
Other Liabilities
Long-term debt 1,846 3,960
Other 355 355
- ------------------------------------------------------------------------------
Total liabilities 77,796 90,063
- ------------------------------------------------------------------------------
Shareholders' Investment
Common Stock, par value $1, authorized 44,000,000
shares, issued 7,004,612 and 7,001,435 shares at
June 30, 1995 and Dec. 31, 1994, respectively 7,005 7,002
Series B Common Stock, par value $1, authorized
6,000,000 shares, issued 1,358,940 and 1,362,117
shares at June 30, 1995 and December 31, 1994, 1,359 1,362
Paid-in surplus 36,534 36,534
Retained earnings/(accumulated deficit) 1,179 (167)
- ------------------------------------------------------------------------------
Total shareholders' investment 46,077 44,731
- ------------------------------------------------------------------------------
Total liabilities and shareholders' investment $123,873 $134,794
=============================================================================
<FN>
The accompanying notes are an integral part of this financial statement.
</TABLE>
<PAGE>
PART I
FORM 10-Q
PAGE 6
<TABLE>
MICHAEL BAKER CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
==============================================================================
For the six months ended
-----------------------------
June 30, 1995 June 30, 1994
- ------------------------------------------------------------------------------
(In thousands)
<S> <C> <C>
Cash Flows from Operating Activities
Net income $1,346 $81
Adjustments to reconcile net income to net cash
provided by/(used in) operating activities:
Depreciation and amortization 2,585 2,740
Deferred income taxes (314) (1,555)
Changes in assets and liabilities:
Decrease in receivables, contracts in progress and
advance billings 9,754 465
Decrease in accounts payable and accd expenses (10,603) (5,922)
Increase in other net assets (79) (726)
- ------------------------------------------------------------------------------
Total adjustments 1,343 (4,998)
- ------------------------------------------------------------------------------
Net cash prov. by/(used in) operating activities 2,689 (4,917)
- ------------------------------------------------------------------------------
Cash Flows from Investing Activities
Additions to property, plant and equipment (2,000) (3,807)
- ------------------------------------------------------------------------------
Net cash used in investing activities (2,000) (3,807)
- ------------------------------------------------------------------------------
Cash Flows from Financing Activities
(Repay of)/proceeds from revolving credit loans (1,553) 7,124
Repayments of long-term debt (1,415) (512)
- ------------------------------------------------------------------------------
Net cash (used in)/prov by financing activities (2,968) 6,612
- ------------------------------------------------------------------------------
Net decrease in cash and cash equivalents (2,279) (2,112)
Cash and cash equivalents at beginning of year 3,605 5,103
- ------------------------------------------------------------------------------
Cash and cash equivalents at end of period $1,326 $2,991
==============================================================================
Supplemental Disclosure of Cash Flow Data
Interest paid $419 $292
Income taxes paid $313 $662
==============================================================================
<FN>
The accompanying notes are an integral part of this financial statement.
</TABLE> <PAGE>
PART I
FORM 10-Q
PAGE 7
MICHAEL BAKER CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND THE PERIODS ENDED JUNE 30, 1995
(Unaudited)
NOTE 1 - LONG-TERM DEBT AND BORROWING ARRANGEMENTS
In April 1995, the Company entered into an amended secured credit agreement
(the "Agreement") with Mellon Bank, N.A. Under its terms, the Agreement
provides for a decreasing commitment amount through May 31, 1996. The
initial commitment of $17,500,000 was reduced to $16,500,000 as of June 30,
1995, and will be further reduced by $1,000,000 at the end of each calendar
quarter, such that the ultimate commitment that will be in effect for the
period March 31, 1996 through May 31, 1996 shall be $13,500,000. Under the
Agreement, the commitment includes the sum of the principal amount of
revolving credit loans outstanding and the aggregate face value of certain
outstanding letters of credit. The Company believes that the commitment
available will be adequate to meet its borrowing and letter of credit
requirements for the term of the Agreement. The Company also intends to
renew the Agreement at its conclusion and believes that it will have the
ability to do so.
As of June 30, 1995, borrowings of $482,000 were outstanding under the
Agreement (and included in the long-term debt in the accompanying Condensed
Consolidated Balance Sheet) along with outstanding letters of credit totaling
$6,915,000. An additional letter of credit totaling $2,800,000 was
outstanding at June 30, 1995, but was not covered by the Agreement.
NOTE 2 - EARNINGS PER SHARE
Per share computations are based upon a weighted average of 8,363,552 shares
for each of the three-month and six-month periods ended June 30, 1995 and
1994. The Company's 1995 Stock Incentive Plan, which was approved at the
annual meeting of shareholders on May 24, 1995, had no dilutive effect on
earnings per share for either of the three or six-month periods ended
June 30, 1995. Under the 1995 Stock Incentive Plan, total options of 156,944
were granted on January 1, 1995 at an exercise price of $5.00 per share.
NOTE 3 - LITIGATION
The Company has been named as a defendant or co-defendant in legal
proceedings wherein substantial damages are claimed. Such proceedings are
not uncommon to the Company's business. After consultations with counsel,
management believes that the Company has recognized adequate provisions for
these proceedings and their ultimate resolutions will not have a material
adverse effect on the consolidated financial position or annual results of
operations of the Company. The most significant of these proceedings are
discussed below.<PAGE>
PART I
FORM 10-Q
PAGE 8
MICHAEL BAKER CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND THE PERIODS ENDED JUNE 30, 1995
(Unaudited)
NOTE 3 - LITIGATION (Cont.)
In 1987, a lawsuit was brought in the Supreme Court of the State of New York,
Bronx County, by the Dormitory Authority of the State of New York against a
number of parties, including the Company and one of its wholly owned
subsidiaries, that asserts breach of contract and alleges damages of $13
million. The Company, which was not a party to the contract underlying the
lawsuit, contends that there is no jurisdiction with respect to the Company
and that it cannot be held liable for any conduct of the subsidiary. Both
the Company and the subsidiary are contesting liability issues and have filed
cross-claims and third-party claims against other entities involved in the
project.
In September 1991, the Company, through a newly formed subsidiary, Baker
Mellon Stuart Construction, Inc. ("BMSCI"), acquired certain assets and
contracts from Federal Street Construction Co., Inc. ("FSC"), which
thereafter continued to perform services under various contracts that were
not acquired by BMSCI. On May 11, 1992, a public body that had contracted
with FSC in 1989 to construct a $38 million project filed a lawsuit in state
court in Illinois against FSC and its surety alleging various claims in
connection with the contract. This contract was not acquired by BMSCI, but
the plaintiff also named the Company, BMSCI and another subsidiary as
defendants based upon a legal theory of successor liability by virtue of the
sale of certain assets and contracts to BMSCI by FSC. Based upon facts known
to management at this time and consultations with defense counsel, in manage-
ment's opinion, the Company has valid defenses.<PAGE>
PART I
FORM 10-Q
PAGE 9
REVIEW BY INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP, the Company's independent accountants, has performed
a limited review of the financial information for the three-month and
six-month periods ended June 30, 1995, contained in this report. As a result
of such review, no material adjustments or additional disclosures with respect
to such financial information were recommended by Price Waterhouse LLP.
With respect to the Michael Baker Corporation and subsidiaries condensed
consolidated financial information as of and for the three-month and
six-month periods ended June 30, 1995, Price Waterhouse LLP reported that they
have applied limited procedures in accordance with professional standards for
a review of such information. However, their separate report dated August 8,
1995, appearing herein, states that they did not audit and they do not express
an opinion on the condensed consolidated financial information. Price
Waterhouse LLP has not carried out any significant or additional tests beyond
those which would have been necessary if their report had not been included.
Accordingly, the degree of reliance on their report on such information should
be restricted in light of the limited nature of the review procedures applied.
Price Waterhouse LLP is not subject to the liability provisions of Section 11
of the Securities Act of 1933 for their report on the unaudited consolidated
financial information because that report is not a "report" or a "part" of the
registration statement prepared or certified by Price Waterhouse LLP within
the meaning of Sections 7 and 11 of the Act.
<PAGE>
PART I
FORM 10-Q
PAGE 10
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Total Contract Revenues
Total contract revenues were $88,946,000 for the second quarter of fiscal
1995, compared to $109,995,000 for the same period in fiscal 1994, a decrease
of $21,049,000. The most significant portion of this decrease was generated
by the General Buildings business unit which experienced a reduction of
$15,847,000. This reduction resulted from lower volumes in its construction
division as well as from the substantial completion of Baker Support Services'
military housing renovation business, which was discontinued in 1993. Of the
remaining overall decrease, the Transportation business unit experienced an
overall decrease of $2,907,000 due to lower volumes in its heavy and highway
construction division for the quarter, despite a revenue increase from its
engineering division.
Total contract revenues were $175,490,000 for the first six months of fiscal
1995 compared to $203,878,000 for the same period in fiscal 1994, a decrease
of $28,388,000.
Gross Profit
The Company's gross profit of $10,788,000 for the second quarter of 1995
approximates its gross profit of $10,799,000 from its year ago second
quarter; however, as a percentage of total contract revenues, gross profit
improved to 12.1% in the second quarter of 1995, compared to 9.8% in the
prior year second quarter. With the exception of the Transportation business
unit, each of the Company's business units reported second quarter
improvements in its gross profit as a percentage of total contract revenues.
Most notable among the improvements were the General Buildings and Energy
business units. Favorably affecting the General Buildings unit's second
quarter 1995 results was the reversal of reserves totaling $525,000 that were
established in 1993 to provide for estimated losses on the completion of
certain Baker Support Services military housing renovation contracts. The
amount of reserves reversed was determined by management to be excess based on
the risk remaining on the final three military housing contracts that were not
yet completed at June 30, 1995. The Energy unit improved its second quarter
profitability percentage through a combination of lower total contract
revenues and increased contract profitability. The Transportation unit's
decrease is attributable to its construction division, which experienced a
reduction due to a contract litigation settlement.
Gross profit for the first six months of 1995 was $20,768,000 versus
$20,932,000 for the first six months of 1994.
<PAGE>
PART I
FORM 10-Q
PAGE 11
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General and Administrative Expenses
General and administrative ("G&A") expenses decreased by $1,138,000 to
$8,864,000 for the second quarter of 1995 from $10,002,000 in the second
quarter of 1994. This reduction is primarily attributable to the previously-
announced cost reduction programs at Baker/MO and in the construction
divisions of the Company's General Buildings and Transportation business
units. These cost reductions were effected during 1994 and early 1995 to
better align each of the divisions with its expected revenues, and are
expected to result in an annual reduction in G&A expenses of approximately
$5 million.
G&A expenses decreased by $2,512,000 to $17,975,000 for the first six months
of 1995 versus $20,487,000 for the same period in fiscal 1994.
Income Taxes
The Company had a provision for income taxes of 49.8% for the first six
months of 1995 compared to 46.7% for the first six months of 1994. The
difference between these percentages and the 34% statutory tax rate is
primarily attributable to state income taxes and the nondeductibility of
certain normal business expenses. The 1995 provision rate increased due to
a reduction of foreign tax benefits. Another difference in the rates relates
to certain states having established limitations on the amount of net
operating losses that may be carried forward to benefit future years.
Furthermore, certain states do not allow taxable losses generated by
subsidiaries to be offset by taxable income generated by other subsidiaries
within the Company's consolidated group.
CONTRACT BACKLOG
The funded backlog of work to be performed was $290.2 million as of June 30,
1995, compared to funded backlog of $306.4 million at March 31, 1995 and
$283.3 million at December 31, 1994. "Funded" backlog represents that
portion of work supported by signed contracts and for which the procuring
agency has appropriated and allocated the funds to pay for the work.
Total backlog, which includes that portion of contract value for which
options are still to be exercised (such additive amount defined as "unfunded"
backlog), was $522.4 million as of June 30, 1995, $501.6 million at March
31, 1995 and $468.3 million at December 31, 1994. Among the more significant
new work added during the second quarter of 1995 were a five-year, $50
million Civil contract extension to continue providing engineering services
for the Federal Emergency Management Agency (FEMA) and a $10 million contract
modification to a busway design contract in the Transportation unit.<PAGE>
PART I
FORM 10-Q
PAGE 12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $2,689,000 for the first six
months of 1995, compared to net cash used in operating activities of
$4,917,000 for the same period in 1994. The most significant source of cash
from operating activities during 1995 was a reduction of $9,754,000 in
accounts receivable and other contract-related assets. This reduction
reflects a cash flow improvement from the first six months of 1994 by
$9,289,000, due to the combination of lower 1995 business volumes and
significant cash collections related to claims resolutions on certain
construction contracts. The most significant use of cash from operating
activities was a decrease in accounts payable and other accrued expenses by
$10,603,000. This decrease adversely affected cash flow relative to the
comparable 1994 period by $4,681,000, and is primarily attributable to the
lower volume of business in 1995 relative to the fourth quarter of 1994 and
the payment of certain accounts payable that were held just prior to year end.
Net cash used in investing activities was $2,000,000 for the first six months
of 1995, compared to $3,807,000 for the first six months of 1994. This
amount solely comprises capital expenditures for both periods. During the
first six months of 1994, non-recurring capital expenditures totaling
$974,000 related to the completion of renovations to the Company's office
building in Beaver, Pennsylvania, were incurred. The remainder of the
current year reduction reflects management's concerted effort to more closely
monitor capital expenditures in 1995.
Net cash used in financing activities was $2,968,000 for the first six months
of 1995 compared to net cash provided by financing activities of $6,612,000
in 1994. The 1995 decrease resulted from lower borrowings on the Company's
revolving credit facility due to the improvement in cash provided by
operating activities for the first six months of 1995.
The Company's working capital decreased slightly during the first six months
of 1995 to $21,949,000 at June 30, 1995, from $22,391,000 at December 31,
1994. The current ratio increased to 1.29:1 at June 30, 1995, compared to
1.26:1 at December 31, 1994. These changes resulted primarily from the
aforementioned decreases in accounts receivable and other contract-related
assets as well as accounts payable and other accrued expenses.
In April 1995, the Company entered into an amended secured credit agreement
with Mellon Bank, N.A. This agreement provides for a decreasing commitment
amount, which covers loans and letters of credit, through May 31, 1996. The
initial commitment of $17,500,000 was reduced to $16,500,000 as of June 30,
1995, and will be further reduced by $1,000,000 at the end of each calendar
quarter. As of June 30, 1995, borrowings of $482,000 and letters of credit
totaling $6,915,000 were outstanding under the credit agreement. Management
believes that the credit agreement will be adequate to meet its borrowing and
letter of credit requirements through May 31, 1996.<PAGE>
PART I
FORM 10-Q
PAGE 13
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES (Cont.)
The Company is required to provide bid and performance bonding on certain
construction contracts, and has a $350 million bonding line available through
Aetna Casualty and Surety Company. Management believes that its bonding line
will be sufficient to meet its bid and performance needs for the foreseeable
future.
A significant portion of the Company's cash flow is dependent upon
appropriations of public funds and the timing of payments under long-term
contracts. The Company's short and long-term liquidity will be affected by the
narrow margins on construction work in backlog, and its ability to sustain
profitable operations and to control costs during periods of lower volumes.
Management has already significantly reduced overhead and will reduce it
further if business conditions require such actions. Additional external
factors such as price fluctuations in the energy industry and the effects of
interest rates on private construction projects could affect the Company.
At this time, management believes that funds generated from operations
and existing short-term and potential long-term borrowing capabilities will
be sufficient to meet its operating requirements for the next year.<PAGE>
PART I
FORM 10-Q
PAGE 14
Independent Accountant's Review Report
August 8, 1995
To the Shareholders and Board of Directors of
Michael Baker Corporation
We have reviewed the accompanying condensed consolidated balance sheet of
Michael Baker Corporation (a Pennsylvania Corporation) and subsidiaries (the
Company) as of June 30, 1995, and the related condensed consolidated
statements of income and of cash flows for the 3-month and 6-month periods
then ended. This financial information is the responsibility of the
Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying interim financial information as of June
30, 1995, and for the 3-month and 6-month periods then ended, for it to be
in conformity with generally accepted accounting principles.
The comparative interim financial information for the 3-month and 6-month
periods ended June 30, 1994, was reviewed by other independent accountants
whose report dated July 19, 1994, stated that they were not aware of any
material modifications that should be made to such interim financial
information for it to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of December 31, 1994, and the
related consolidated statements of income, of changes in shareholders'
investment and of cash flows for the year then ended (not presented herein),
and in our report dated February 17, 1995, except as to Note 6, which is as
of April 13, 1995, we expressed an unqualified opinion on those consolidated
financial statements. In our opinion, the information set forth in the
accompanying condensed consolidated balance sheet as of December 31, 1994,
is fairly stated in all material respects in relation to the consolidated
balance sheet from which it has been derived.
PRICE WATERHOUSE LLP
Pittsburgh, Pennsylvania<PAGE>
PART II
FORM 10-Q
PAGE 15
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
(a)The Company's annual meeting of shareholders was held on
May 24, 1995.
(b)Each of management's nominees to the board of directors, as
listed in the Company's proxy statement, was elected. There was
no solicitation in opposition to management's nominees.
(c)The first matter voted upon at the meeting was the election of
the Company's directors to one-year terms or until their
respective successors have been elected. The votes cast by
holders of the Company's Common Stock and Series B Common Stock in
approving the following directors were:
<TABLE>
<CAPTION>
Name of Director Votes for Votes withheld
----------------- --------- --------------
<S> <C> <C>
Charles I. Homan 18,516,724 842,986
Thomas D. Larson 18,715,287 644,423
Richard L. Shaw 18,342,410 1,017,300
Konrad M. Weis 18,393,946 965,764
J. Robert White 18,259,188 1,100,522
William A. Wulf 18,613,680 746,030
</TABLE>
The votes cast by holders of the Company's Common Stock in
approving the following directors were:
<TABLE>
<CAPTION>
Name of Director Votes for Votes withheld
---------------- --------- --------------
<S> <C> <C>
William J. Copeland 6,296,117 220,043
Roy V. Gavert, Jr. 6,323,503 192,657
Jack B. Hoey 6,327,175 188,985
</TABLE>
<PAGE>
PART II
FORM 10-Q
PAGE 16
PART II. OTHER INFORMATION (Cont.)
The second and final matter voted upon at the meeting was the adoption
of the 1995 Stock Incentive Plan, which will provide long-term
incentive compensation to eligible employees. The votes cast by
holders of the Company's Common Stock and Series B Common Stock in
approving such plan were 13,774,567 votes in favor, 4,752,208 votes
against, and 832,935 abstentions.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) The following exhibits are included herewith as a part of this
Report:
<TABLE>
<S> <C>
Exhibit No. Description
------------ -------------
15 Letter regarding unaudited interim financial
information
</TABLE>
(b) Reports on Form 8-K
During the second quarter ended June 30, 1995, the Company filed
no reports on Form 8-K.
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.
<TABLE>
<S> <C>
MICHAEL BAKER CORPORATION
Dated: August 11, 1995 By: /s/ J. Robert White
-----------------------
J. Robert White
Executive Vice President,
Chief Financial Officer and
Treasurer
</TABLE>
<PAGE>
Exhibit No. 15
August 11, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Ladies and Gentlemen:
We are aware the Michael Baker Corporation (the Company) has included our
report dated August 8, 1995 (issued pursuant to the provisions of Statement on
Auditing Standards No. 71), in the Company's Form 10-Q to be filed on or about
August 11, 1995. We are also aware of our responsibilities under the
Securities Act of 1933.
Yours very truly,
PRICE WATERHOUSE LLP
Pittsburgh, Pennsylvania
