Form 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 				 (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1995 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 or15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____to____ Commission file number 0-6079 AMELCO CORPORATION (Exact name of registrant as specified in its charter) California 99-0068616 (State or other jurisdiction of (I.R.S. Employer 	incorporation or organization) Identification No.) 19208 South Vermont Avenue Gardena, California 90248 (Address of principal executive offices) (Zip Code)									 (310) 327-3070 ---------------------------- (Registrant's telephone number, including area code) Not Applicable (Former name, former address and former fiscal year, if changed since last report) 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 ____ 			 Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Outstanding at Class of Common Stock June 30, 1995 Stated Value $2.50 per share 1,443,542 	 				 	 AMELCO CORPORATION AND SUBSIDIARIES INDEX PAGE NO. PART I. FINANCIAL INFORMATION Consolidated Balance Sheets- June 30, 1995 and September 30, 1994 3 Consolidated Statements of Earnings - Nine months ended June 30, 1995 and 1994 4 	 Consolidated Statements of Earnings - Three months ended June 30, 1995 and 1994 5 		 Consolidated Statements of Cash Flow- Nine months ended June 30, 1995 and 1994 6 Notes to Consolidated Financial Statements 7 Management's Discussion and Analysis of Financial Condition and Results of Operations 8 	 PART II. 	 Other Information 10 Signature Page 10 Amelco Corporation and Subsidiaries Consolidated Balance Sheets 		 (Unaudited) June 30, September 30, 1995 1994 -------------- ------------- Assets Cash (note 4) $ 3,831,000 2,690,000 Receivables, net (note 2) 25,728,000 25,596,000 Inventories 170,000 126,000 Investment in and advances to joint ventures 65,000 1,120,000 Costs and recognized profits in excess of billings on uncompleted contracts 7,351,000 5,571,000 Deferred tax assets 260,000 168,000 Prepaid expenses and other 349,000 170,000 -------------- ------------- Total Current Assets 37,754,000 35,441,000 Note receivable from Halau Corporation, noncurrent 3,315,000 3,338,000 Other noncurrent notes receivable 69,000 110,000 Property, plant and equipment, net 1,773,000 1,797,000 Other assets 134,000 103,000 ------------- ------------- Total Assets $ 43,045,000 40,789,000 ============= ============= Liabilities and Stockholders' Equity Short term borrowings $ 1,250,000 -0- Short term notes payable 48,000 -0- Current portion of long term debt 47,000 45,000 Accounts payable 14,495,000 14,924,000 Accrued expenses 2,620,000 2,744,000 Federal and state income taxes 28,000 191,000 Billings in excess of costs and recognized profits on uncompleted contracts 7,660,000 6,413,000 Other current liabilities 431,000 573,000 -------------- ------------- Total Current Liabilities 26,579,000 24,890,000 Long term debt, excluding current portion 1,875,000 1,911,000 Deferred federal and state income taxes 25,000 61,000 Minority interest in subsidiary 13,000 31,000 Stockholders' equity: Common stock, stated value $2.50 per share, authorized 3,000,000 shares,issued 2,214,008 5,535,000 5,535,000 Additional paid-in capita l7,427,000 7,427,000 Retained earnings 4,602,000 3,945,000 -------------- -------------- 17,564,000 16,907,000 Less treasury shares (3,011,000) (3,011,000) -------------- -------------- Total stockholders' equity 14,553,000 13,896,000 -------------- -------------- Total Liabilities and Stockholders' Equity $43,045,000 40,789,000 ============== ============== Amelco Corporation and Subsidiaries Consolidated Statements of Earnings Nine Months Ended June 30, 1995 and 1994 (Unaudited) 1995 1994 ------------- ------------- Revenues $ 94,025,000 78,015,000 Costs and operating expenses 86,564,000 71,088,000 ------------- ------------- Gross profit 7,461,000 6,927,000 General and administrative expenses 6,081,000 5,790,000 ------------- ------------- Operating income 1,380,000 1,137,000 Other income (expense): Interest expense (239,000) (232,000) Other, net 209,000 188,000 ------------- ------------- Total other income (expense) (30,000) (44,000) ------------- ------------- Earnings before income taxes 1,350,000 1,093,000 Income tax expense 559,000 444,000 Minority interest in earnings (loss) of subsidiary (10,000) 33,000 ------------- ------------- Net earnings $801,000 616,000 Earnings per share: Net earnings per common share $ 0.55 $ 0.43 ============= ============= Weighted average number of common shares outstanding during the period 1,444,000 1,444,000 ============= ============= Amelco Corporation and Subsidiaries Consolidated Statements of Earnings Three Months Ended June 30, 1995 and 1994 (Unaudited) 1995 1994 ------------- ------------- Revenues $ 31,669,000 27,699,000 Costs and operating expenses 29,238,000 25,377,000 ------------- ------------- Gross profit 2,431,000 2,322,000 General and administrative expenses 2,011,000 1,889,000 ------------- ------------- Operating income 420,000 433,000 Other income (expense): Interest expense (73,000) (92,000) Other, net 72,000 68,000 ------------- ------------- Total other income (expense) (1,000) (24,000) Earnings before income taxes 419,000 409,000 Income tax expense 168,000 165,000 Minority interest in earnings (loss) of subsidiary -0- 13,000 ------------- ------------- Net earnings $251,000 231,000 Earnings per share: Net earnings per common share $ 0.17 $ 0.16 ============= ============ Weighted average number of common shares outstanding during the period 1,444,000 1,444,000 ============= ============ Amelco Corporation and Subsidiaries Consolidated Statements of Cash Flows Nine Months Ended June 30, 1995 and 1994 (Unaudited) 1995 1994 ------------- ------------ Cash flows from operating activities: Net earnings $ 801,000 616,000 Adjustments to reconcile income to net cash provided (used) by operating activities: Depreciation and amortization 300,000 293,000 Gain on sale of assets (4,000) (1,000) (Increase) decrease in assets and increase (decrease) in liabilities: Accounts receivable (132,000) (5,009,000) Investment in joint venture 1,055,000 (465,000) Inventories (44,000) 39,000 Costs and recognized profits in excess of billings on uncompleted contracts (1,780,000) (2,691,000) Prepaid expenses (179,000) 94,000 Other assets (31,000) (19,000) Accounts payable and accrued expenses (553,000) 194,000 Billings in excess of costs and recognized profits on uncompleted contracts 1,247,000 3,725,000 Income taxes payable (291,000) (182,000) Other liabilities (142,000) 22,000 ------------- ----------- Total adjustments (554,000) (4,000,000) ------------- ----------- Net cash (used) by operating activities $247,000 (3,384,000) ------------- ----------- Cash flows from investing activities: Decrease(increase) in note receivable 64,000 54,000 Increase (decrease) in minority interest (18,000) 33,000 Proceeds from sale of assets 6,000 3,000 Capital expenditures (278,000) (237,000) ------------- ----------- Net cash (used) by investing activities $(226,000) (147,000) ------------- ----------- Cash flows from financing activities: Borrowings under revolving line of credit, net 1,250,000 2,600,000 Repayments of long term debt (34,000) (152,000) Borrowings under short term note payable 540,000 291,000 Repayments of short term note payable (492,000) (264,000) Dividends paid (144,000) (217,000) ------------- ----------- Net cash provided by financing activities $1,120,000 2,258,000 ------------- ----------- Net increase (decrease) in cash and cash equivalents 1,141,000 (1,273,000) Cash and cash equivalents at beginning of year 2,690,000 3,406,000 ------------- ----------- Cash and cash equivalents at end of year $3,831,000 2,133,000 ============= =========== Amelco Corporation and Subsidiaries Notes to Consolidated Financial Statements 1. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments, consisting of normal recurring adjustments necessary to present fairly the Company's financial position as of June 30, 1995 and September 30, 1994, the results of its operations for the nine months ended June 30, 1995 and 1994 and the three months ended June 30, 1995 and 1994 and changes in cash flow for the nine months ended June 30, 1995 and 1994. These condensed financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's annual report on Form 10-K for the year ended September 30, 1994. 2. Retentions: Contract retentions which are collectible upon the owner's approval of contract performance on construction contracts are included under receivables and amount to $6,170,000 and $5,507,000 at June 30, 1995 and September 30, 1994, respectively. 										 3. Backlog: The backlog of uncompleted contracting work was approximately $92,884,000 on contracts in force as of June 30, 1995, compared with $110,519,000 as of June 30, 1994, inclusive of the Company's proportionate share of contract backlog from joint ventures amounting to $40,000 at June 30, 1995 and $6,022,000 at June 30, 1994. 4. Cash: Cash balances at June 30, 1995 include approximately $1,231,000 in restricted time deposits maintained in lieu of retention which will be released upon completion of the related construction projects. Interest income on these deposits are credited to the Company. 5. Dividends: A $.10 per share dividend was paid on February 15, 1995 to stockholders of record as of February 6, 1995. The dividend amounted to $144,000. 				 Amelco Corporation and Subsidiaries Management's Discussion and Analysis of Financial Condition and Results of Operations Capital Resources and Liquidity Cash balances increased from $2,690,000 at September 30, 1994 to $3,831,000 at June 30, 1995. This increase in cash of $1,141,000 consisted of approximately $247,000 provided from operating activities and $1,120,000 provided by financing activities, which was partially offset by $226,000 used by investing activities. Cash provided by operating activities included net earnings from operations of $801,000, a decrease in investment in joint ventures of $1,055,000 and an increase in billings in excess of costs and recognized profits of $1,247,000. These increases of cash were largely offset by an increase in costs and recognized profits in excess of billings on uncompleted contracts of $1,780,000 and a decrease in accounts payable and accrued expenses of $553,000. Net cash provided by financing activities included $1,250,000 in borrowings under the Company's lines of credit and $540,000 under a short term note to finance insurance premiums. These changes were offset by repayments of long term debt and short term notes aggregating $526,000 and payment of a $144,000 cash dividend to stockholders on February 15, 1995. Net cash used by investing activities of $226,000 consisted primarily of capital expenditures of $278,000. The Company's construction backlog amounted to approximately $92,884,000 at June 30, 1995, of which approximately $71.9 million was in California, $10.9 million was in Hawaii and the Pacific Basin, and $10.1 million in other western continental U. S. states. The Company's revolving lines of credit aggregating $6,000,000 were renewed in March 1995. At June 30, 1995, there was $1,250,000 borrowed under these lines of credit. Management believes that the present liquidity of the Company together with the availability of the aforementioned lines of credit are adequate to provide the necessary working capital to fund the Company's operations in the near term future. Consolidated working capital amounted to $11,175,000 at June 30, 1995 as compared to $10,551,000 at September 30, 1994. The working capital ratio at September 30, 1994 and June 30, 1995 was unchanged at 1.42. Amelco Corporation and Subsidiaries Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Results of Operations Consolidated revenues increased by 14.3% and 20.5% in the three and nine month periods ended June 30, 1995 as compared to the same periods in the prior year. The change in the nine month period results primarily from a revenue increase of approximately $19.9 million from the California operations. This increase was partially offset by revenue decreases of $2.8 million from the Hawaii operations and $1.1 million from other western continental U. S. states. The change in California revenues is largely a result of the increased construction backlog obtained in the second half of fiscal 1994. Changes in revenue volume reflect primarily the degree of success in bidding on new work as well as the scheduling requirements of the customer, and are not necessarily indicative of revenue volume or profitability in future periods. Gross profits increased by $109,000 in the three months period ended June 30, 1995 and by $534,000 in the nine month period ended June 30, 1995. Gross profits as a percentage of revenue were 7.7% and 7.9% in the three and nine month periods ended June 30, 1995 as compared to 8.4% and 8.9% in the three and nine month periods ended June 30,1994. The decrease results from a combination of the continued highly competitive conditions in the construction market and the Company's focus on procurement of larger projects as a prime contractor. Management's ability to enhance profit margins in its business is largely limited to its ability to identify profitable bidding opportunities, estimate accurately during the bidding stage and upon award, to effectively manage jobsite performance. General and administrative expenses for the nine month period increased from $5,790,000 in 1994 to $6,081,000 in 1995. The increase of $291,000 results largely from increased management, estimating and administrative staffing costs and is related to the increase in revenue volume since the prior period. Interest expense decreased by $19,000 and increased by $7,000 in the three and nine months periods ended June 30, 1995. The increase in the nine month period results from higher short term interest rates in 1995 as compared to the previous period. The decrease in the three month period reflects a decrease in average short term borrowings as compared to the previous period. Part II Other Information 			 No events occurred during the three (3) month period ended June 30, 1995 which are reportable under this part. 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. 	 Amelco Corporation ------------------------ Date: August 14, 1995 By /s/ Patrick T. Miike Patrick T. Miike Chief Financial Officer, Vice President-Finance and Treasurer