SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED JUNE 30, 1997 COMMISSION FILE NO. 0-3415
STV GROUP, INCORPORATED
(Exact name of registrant as specified in its charter)
Pennsylvania 23-1698231
(State or other jurisdiction of (I.R.S. Employer Identification)
incorporation or organization)
205 West Welsh Drive, Douglassville, Pennsylvania 19518
(Address of principal executive offices) (Zip Code)
(610) 385-8200
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(g) of the Act:
Common Stock $1.00 par value
(Title of class)
As of June 30, 1997, there were 1,821,246 shares of common stock of the
registrant outstanding.
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 twelve 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
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
STV GROUP, INC., AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
UNAUDITED
<TABLE>
<CAPTION>
June 30, 1997 September 30, 1996
<S> <C> <C>
ASSETS
Current Assets
Cash $360,000 $28,000
Accounts Receivable 19,588,000 20,504,000
Costs and Estimated Profits of Uncompleted
Contracts in Excess of Related Billings 15,322,000 14,290,000
Deferred tax benefit 180,000 180,000
Other Current Assets 2,537,000 1,577,000
--------- ---------
Total Current Assets 37,987,000 36,579,000
Property and Equipment 11,755,000 12,301,000
Less Accumulated Depreciation 10,304,000 10,987,000
---------- ----------
Net Property and Equipment 1,451,000 1,314,000
Deferred Tax Benefit 1,369,000 1,369,000
Other Assets 635,000 733,000
------- -------
TOTAL $41,442,000 $39,995,000
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes and Accounts Payable $16,013,000 $16,051,000
Accrued Wages and Expenses 7,948,000 7,489,000
Billings on Uncompleted Contracts in Excess of
Related Costs 4,753,000 4,318,000
--------- ---------
Total Current Liabilities 28,714,000 27,858,000
Long-Term Debt 1,818,000 1,795,000
Stockholders' Equity
Preferred Stock 0 0
Common Stock 1,921,000 1,921,000
Capital Surplus 3,003,000 3,003,000
Retained Earnings 6,382,000 5,814,000
--------- ---------
Total 11,306,000 10,738,000
Less: Treasury Stock 271,000 271,000
Loans Receivable from Officers 125,000 125,000
------- -------
Total Stockholders' Equity 10,910,000 10,342,000
TOTAL $41,442,000 $39,995,000
=========== ===========
</TABLE>
<PAGE>
STV GROUP, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
<TABLE>
<CAPTION>
NINE MONTHS ENDED
June 30
1997 1996
<S> <C> <C>
Operating Activities
Net Income $569,000 $333,000
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation and Amortization 609,000 794,000
Other 0 (163,000)
Changes in Operating assets and liabilities
Accounts Receivable 916,000 (1,576,000)
Costs of uncompleted contracts in
excess of billings and prepaid expenses (1,991,000) 902,000
Accounts Payable and accrued expenses 269,000 1,597,000
Billing in excess of related costs 435,000 889,000
Current Income Taxes (87,000) 499,000
------- -------
Net Cash provided by operating activities $720,000 $3,275,000
Investing Activities
Purchase of Property and Equipment (680,000) (199,000)
Purchase of Software (91,000) (12,000)
Decrease (Increase) in other assets 121,000 (11,000)
------- -------
Net Cash provided (used) by investing activities ($650,000) ($222,000)
Financing Activities
Proceeds from line of credit and long term
borrowings 69,210,000 62,250,000
Principal payments on line of credit and long
term borrowings (68,948,000) (65,933,000)
----------- -----------
Net Cash (used) provided by financing
activities $262,000 ($3,683,000)
Increase (decrease) in cash and equivalents 332,000 (630,000)
Cash and equivalents at beginning of year 28,000 668,000
------ -------
Cash and equivalents at end of period $360,000 $38,000
======== =======
</TABLE>
<PAGE>
STV GROUP, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
UNAUDITED
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
June 30 June 30
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Revenue
Total Revenue $24,637,000 $24,949,000 $69,684,000 $71,434,000
Less Subcontract and Procurement Costs 6,524,000 6,967,000 15,267,000 17,660,000
--------- --------- ---------- ----------
Operating Revenue $18,113,000 $17,982,000 $54,417,000 $53,774,000
Costs and Expenses
Costs of Services and Sales 15,975,000 16,003,000 48,269,000 48,131,000
General and Administrative 1,324,000 1,272,000 3,923,000 3,702,000
Interest in Joint Venture 0 (12,000) 0 (38,000)
Interest 350,000 350,000 1,035,000 1,161,000
------- ------- --------- ---------
Total Costs and Expenses 17,649,000 17,613,000 53,227,000 52,956,000
Income Before Income Taxes 464,000 369,000 1,190,000 818,000
Income Taxes 236,000 210,000 621,000 485,000
------- ------- ------- -------
Net Income $228,000 $159,000 $569,000 $333,000
======== ======== ======== ========
Earnings per share: $0.12 $0.08 $0.30 $0.18
Weighted Average Common Shares and
Equivalents 1,902,851 1,877,512 1,901,469 1,865,777
</TABLE>
<PAGE>
Notes to Consolidated Condensed Financial Statement
June 30, 1997
1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated condensed financial statements have been
prepared in accordance with the instruction to Form 10-Q and therefore do not
include all information and footnotes necessary for a fair presentation of
financial position, results of operations, and cash flows in conformity with
generally accepted accounting principles.
It should be understood that the foregoing interim results are not necessarily
indicative of the results of operations for the full fiscal year ending
September 30, 1997 due in part to increased reliance on estimates at interim
dates.
<PAGE>
Item 2. Management Discussion and Analysis of the Results of Operation
Total revenues for the quarter ended June 30, 1997 (third quarter fiscal 1997)
decreased 1.3% as compared to the third quarter of fiscal 1996 and increased
10.4% as compared to the previous quarter. Operating revenues (total revenues
excluding pass-through costs) increased .7% as compared to the third quarter of
fiscal 1996 and decreased .4% as compared to the previous quarter.
Pass-through costs, expressed as a percentage of total revenues, decreased to
26.5% as compared to 27.9% in the third quarter of fiscal 1996 and increased
from 18.5% in the previous quarter. Pass-through costs will vary depending on
the need for specialty subconsultants and governmental subcontract requirements.
Cost of services, expressed as a percentage of operating revenues, decreased to
88.3% for the third quarter of fiscal 1997 from 89.0% in the third quarter of
fiscal 1996 and decreased from 88.6% in the previous quarter. The decrease in
the percentage from the third quarter of fiscal 1996 was due mainly to the
increase in revenue. The costs of services remained comparable to the previous
quarter..
General and administrative expense, expressed as a percentage of operating
revenue, is 7.3% in the third quarter of fiscal 1997 and is comparable to 7.1%
recorded in the third quarter of fiscal 1996 and 7.4% in the previous quarter.
Interest, expressed as a percentage of operating revenues, remained constant at
1.9% for the third quarter of fiscal 1997 as compared to the third quarter of
fiscal 1996 and decreased slightly from 2.0% in the previous quarter.
Income tax expense for the third quarter of fiscal 1997 was 50.9% of pre-tax
income compared to 56.9% in the third quarter of fiscal 1996. The decrease is
due to level non-deductible expenses being lower as a percentage of a higher
third quarter pre-tax income.
Earnings per common share, calculated using the Treasury Stock Method, for the
third quarter of fiscal 1997 were 12 cents based on 1,902,851 shares outstanding
versus 8 cents for the third quarter of fiscal 1996 based on 1,877,512 shares
outstanding.
<PAGE>
Financial Condition
Working capital increased to $9,273,000 from $8,797,000 in the previous quarter.
Capital resources available to the Company included an existing line of credit
for working capital. The current limit is a maximum of $16.5 million based on
accounts receivable and work-in-progress of which approximately $5.2 million is
currently available. The Company is in discussions with its lender which may
reduce its line of credit. The Company believes that it and the lender will
maintain a line of credit adequate to meet the current and future financial
needs of the Company. The Company is planning to continue its program of
purchasing computer-assisted design and drafting equipment and has purchased a
new project management and accounting system.
The Company's backlog is approximately $131 million.
<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.
STV GROUP, INCORPORATED
(Registrant)
August 12, 1997 By: /s/ Michael Haratunian
- ------------------ --------------------------------
Date Michael Haratunian
Chairman, Chief Executive Officer
August 12, 1997 By: /s/ Peter W. Knipe
- ------------------ --------------------------------
Date Peter W. Knipe
Secretary/Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
TRANSMITTING STV GROUP'S THIRD QUARTER 10Q. PERIOD ENDING 06/30/97.
</LEGEND>
<CIK> 0000095045
<NAME> STV GROUP, INC
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> JUN-30-1997
<CASH> 360,000
<SECURITIES> 889,000
<RECEIVABLES> 19,878,000
<ALLOWANCES> 290,000
<INVENTORY> 15,322,000
<CURRENT-ASSETS> 37,987,000
<PP&E> 11,755,000
<DEPRECIATION> 10,304,000
<TOTAL-ASSETS> 41,442,000
<CURRENT-LIABILITIES> 28,714,000
<BONDS> 0
0
0
<COMMON> 1,921,000
<OTHER-SE> 8,989,000
<TOTAL-LIABILITY-AND-EQUITY> 41,442,000
<SALES> 69,684,000
<TOTAL-REVENUES> 69,684,000
<CGS> 48,269,000
<TOTAL-COSTS> 52,192,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,035,000
<INCOME-PRETAX> 1,190,000
<INCOME-TAX> 621,000
<INCOME-CONTINUING> 569,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 569,000
<EPS-PRIMARY> .30
<EPS-DILUTED> 0
</TABLE>
