SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 1995
or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
for the transition period from ________ to ________
Commission file number 0-3062
GUY F. ATKINSON COMPANY OF CALIFORNIA
(Exact name of registrant as specified in its charter)
STATE OF DELAWARE
(State or other jurisdiction of 94-1649018
incorporation or organization) (IRS Employer Identification No.)
1001 Bayhill Drive, San Bruno, California 94066
(Address of principal executive offices) (zip code)
Registrants' telephone number, including area code - (415) 876-1000
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
Common stock as of May 11, 1995
Issued and outstanding - 8,917,224 shares
GUY F. ATKINSON COMPANY OF CALIFORNIA
AND SUBSIDIARY COMPANIES
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets March 31, December 31,
(thousands of dollars) 1995 1994
(unaudited)
ASSETS
Current Assets:
Cash and short-term investments $ 72,288 $ 78,441
Accounts receivable 44,239 33,150
Costs and estimated earnings in excess
of billings 5,615 4,338
Inventories and unamortized costs on
contracts in progress 24,021 20,062
Investments in joint ventures 36,659 40,503
Deferred income taxes 12 23
Other current assets 3,015 3,163
Total current assets 185,849 179,680
Property, plant and equipment, at cost 49,778 51,896
Less accumulated depreciation 32,668 34,345
17,110 17,551
Deferred income taxes 89 88
Other assets 2,526 2,395
$ 205,574 $199,714
LIABILITIES
Current Liabilities:
Notes payable, including current
portion of long-term obligations $ 633 $ 662
Accounts payable 54,934 43,998
Billings in excess of costs and
estimated earnings 33,437 16,920
Accrued expenses 22,899 24,240
Accrued federal & foreign income taxes 5,396 6,953
Due to joint ventures 289 103
Total current liabilities 117,588 92,876
Long-term obligations, less current portion 2,087 2,199
Postretirement benefit obligations and
postretirement health care obligations 7,651 7,651
Total liabilities 127,326 102,726
STOCKHOLDERS' EQUITY
Capital stock 1,894 1,894
Paid-in capital 12,754 13,185
Accumulated translation adjustment (5,168) (5,249)
Unearned compensation (305) (736)
Retained earnings 69,073 87,894
78,248 96,988
$ 205,574 $199,714
See accompanying notes
GUY F. ATKINSON COMPANY OF CALIFORNIA
AND SUBSIDIARY COMPANIES
Consolidated Statements of Operations (unaudited)
(thousands of dollars except Quarter Ended
per share amounts) March 31, 1995 and 1994
1995 1994
Revenue $ 89,738 $127,171
Cost of revenue 82,800 121,322
Gross margin 6,938 5,849
General and administrative expense 8,805 8,509
(Loss) from operations (1,867) (2,660)
Other income (expense), net:
Interest expense (201) (867)
Miscellaneous, net 1,130 941
Total other income (expense), net 929 74
(Loss) from continuing operations before
taxes and the cumulative effect of changes
in accounting (938) (2,586)
Provision (benefit) for income taxes (based on
estimated annual effective tax rates) 49 (457)
(Loss) from continuing operations before
the cumulative effect of changes in accounting (987) (2,129)
Discontinued operations, net of income taxes - 1,371
(Loss) before the cumulative effect of changes
in accounting (987) (758)
Cumulative effect of changes in accounting:
Postemployment benefit costs - (739)
Net (loss) $ (987) $ (1,497)
See accompanying notes
GUY F. ATKINSON COMPANY OF CALIFORNIA
AND SUBSIDIARY COMPANIES
Consolidated Statements of Operations (unaudited), continued
(thousands of dollars except Quarter Ended
per share amounts) March 31, 1995 and 1994
1995 1994
(Loss) per share of common stock from continuing
operations before the cumulative effect of
changes in accounting $ (0.11) $ (0.24)
Income per share of common stock from
discontinued operations - 0.15
(Loss) per share of common stock before
the cumulative effect of changes in accounting $ (0.11) $ (.09)
Cumulative effect of changes in accounting
per share - (.08)
Net (loss) per share $ (0.11) $ (.17)
Average number of shares and common stock
equivalents utilized in net income per
share calculations 8,917 8,780
See accompanying notes
GUY F. ATKINSON COMPANY OF CALIFORNIA
AND SUBSIDIARY COMPANIES
Consolidated Statements of Cash Flows (unaudited) Quarter Ended
(thousands of dollars) March 31, 1995 and 1994
1995 1994
Operating activities:
Net income $ (987) $ (1,497)
Adjustments to reconcile net income to
net cash provided by (used for) operating
activities:
Income from discontinued operations - (1,371)
Depreciation, depletion and amortization 491 543
Deferred income taxes 11 13
Net (gain) on dispositions of property,
plant and equipment (765) (505)
Cumulative effect of changes in accounting - 739
Changes in operating assets and liabilities:
Accounts receivable (11,092) 12,082
Inventories and unamortized costs (3,962) 1,034
Investments in joint ventures 4,029 (1,226)
Other current assets 147 (1,610)
Accounts payable and accrued expenses 9,605 5,294
Accrued income taxes (1,552) 485
Billings in excess of costs and estimated
earnings, net 15,240 (5,962)
Other, net 6 (297)
Net cash provided by operating activities
from continuing operations 11,171 7,722
Net cash (used in) operating activities
from discontinued operations - (9,076)
Net cash provided by (used in) operating
activities 11,171 (1,354)
Investing activities:
Property, plant and equipment expenditures (767) (273)
Proceeds from dispositions of property,
plant and equipment 725 369
Decrease (increase) in other assets, net 634 (547)
Net investing activities of discontinued
operations - (795)
Net cash provided by (used in) investing
activities 592 (1,246)
Financing activities:
Cash dividends paid (17,835) -
Short-term borrowing repayments, net - 3,193
Long-term debt repayments (141) (155)
Net cash provided by (used in) financing
activities (17,976) 3,038
Effect of exchange rate changes on cash 60 (778)
Net (decrease) in cash and short-term
investments $ (6,153) $ (340)
Supplementary information:
Cash paid during the period for:
Interest $ 273 $ 1,244
Federal, foreign and state income taxes 2,547 970
GUY F. ATKINSON COMPANY OF CALIFORNIA
AND CONSOLIDATED SUBSIDIARIES
Notes to Condensed Financial Statements
(all dollar amounts are in thousands)
1. The information furnished reflects all adjustments which
are, in the opinion of management, necessary to a fair
statement of results for the interim periods.
2. During 1994, the company sold its principal manufacturing
subsidiary, Lake Center Industries, Inc., its pipe
distribution business, Comco Pipe & Supply Company, and its
oil and gas investments. The results of operations of these
divested businesses are shown separately in the income
statement for 1994 as "Discontinued operations, net of
income taxes".
The summarized results of discontinued operations were as
follows:
Quarter Ended
March 31, 1995 and 1994
1995 1994
Revenue $ - $ 42,707
Income from discontinued
operations before taxes - 2,154
Provision for income taxes - 783
Income from discontinued
operations $ - $ 1,371
Income per share of common stock
from discontinued operations $ - $ 0.15
GUY F. ATKINSON COMPANY OF CALIFORNIA
AND CONSOLIDATED SUBSIDIARIES
Notes to Condensed Financial Statements
(all dollar amounts are in thousands)
3. The major classifications of inventory are as follows:
March 31, December 31,
1995 1994
Construction materials, parts
and supplies $ 3,109 $ 3,724
Unamortized costs on contracts
in progress 20,912 16,338
$ 24,021 $20,062
4. In 1994, the company recorded an accounting charge of $739
for postemployment benefits upon the adoption of Statement
of Financial Accounting Standards No. 112.
5. On March 31, 1995, the company paid a special cash dividend
of $2.00 per share to shareholders of record on March 15,
1995.
6. The company has 40,000 shares of restricted stock
outstanding pursuant to the provisions of the Guy F.
Atkinson Company of California Executive Stock Plan.
Restrictions on the shares are progressively removed based
on achievement of earnings per share performance goals.
GUY F. ATKINSON COMPANY OF CALIFORNIA
AND CONSOLIDATED SUBSIDIARIES
Notes to Condensed Financial Statements
(all dollar amounts are in thousands)
6. (continued)
In the event that performance goals are not achieved, the
restricted shares are progressively subject to forfeiture.
The market value of the outstanding restricted shares has
been recorded as unearned stock grant compensation, a
separate component of stockholders' equity. The unearned
compensation will be charged to general and administrative
expense as the performance goals are met. At March 31, 1995
no such amounts have been charged.
The company has options outstanding with respect to 741,604
shares of common stock at exercise prices ranging from $6.55
to $11.95 per share. The right to exercise these options
vests progressively over a four year period commencing with
the date of issue and expiring ten years from the date of
issue. In addition, there are stock warrants outstanding
for 387,500 shares of common stock with an exercise price of
$7.00 expiring in 1998.
GUY F. ATKINSON COMPANY OF CALIFORNIA
AND CONSOLIDATED SUBSIDIARIES
Notes to Condensed Financial Statements
(all dollar amounts are in thousands)
7. Net primary earnings per share of common and common stock
equivalents are calculated using the weighted average number
of common shares outstanding, excluding restricted shares
for which performance goals have not been met, plus the net
additional number of shares which would be issuable upon the
exercise of stock options and warrants, assuming that the
company used the proceeds received to repurchase outstanding
shares at market prices.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations (all dollar amounts are in thousands
unless otherwise stated)
Revenue: The company's revenue of $90 million decreased by
30% in the first quarter of 1995 compared with $127 million in
the first quarter of 1994. The reduction in revenue was
attributable to the completion of certain industrial construction
projects in 1994, while new contract awards in the fourth quarter
of 1994 and first quarter of 1995 (which together amount to $270
million), are not yet making a significant contribution to
revenue. The backlog of uncompleted contracts amounted to
$424,883 at March 31, 1995, compared to $656,827 at March 31,
1994. March 31, 1994 backlog included $293,000 relating to an
awarded but long-delayed industrial construction contract which
was subsequently removed from backlog at December 31, 1994.
Excluding the aforementioned contract, backlog at March 31, 1995
was 17% higher than in the comparable period of 1994.
Gross margin: The company's gross margin of $6,938
increased by 19% in the first quarter of 1995 over 1994's $5,849.
The percentage of gross margin to revenue in all of the company's
business units improved to a consolidated 7.7% versus 4.4% for
1994, which more than compensated for the reduced level of
revenue compared with the comparable period in 1994.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations, continued
General and administrative expense: General and
administrative expense of $8,805 increased by 3% in 1995 compared
to $8,509 in 1994. Reductions in corporate overhead expense
implemented in the fourth quarter of 1994 were offset by
increased marketing efforts for Asia and the Middle East as well
as the ongoing costs of implementation of the company's new
accounting and information system.
Other income (expense): Interest expense decreased to $201
in the first quarter of 1995, from $867 in the first quarter of
1994 primarily due to the company retiring all of its short-term
debt in the fourth quarter of 1994. Miscellaneous income
amounted to $1,130 in the first quarter of 1995, compared with
$941 in the corresponding 1994 period. Miscellaneous income was
principally from interest on short-term investments in 1995, and
in 1994 from foreign exchange gains and gains from asset
dispositions.
Income taxes and net income: The loss from continuing
operations before taxes and the cumulative effect of changes in
accounting was reduced to $938 in 1995, from $2,586 in 1994.
Income taxes gave rise to an expense of $49 in 1995 compared to a
benefit of $457 in 1994. The 1995 income tax expense was
attributable to state and foreign income taxes and U.S. tax
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations, continued
losses for which no net tax benefit was available. The 1994
income tax benefit was attributable to the allocation of taxes to
discontinued operations.
In 1994 discontinued operations, net of income taxes,
provided income of $1,371, and the company's adoption of
Statement of Financial Accounting Standards No. 112 resulted in
an accounting charge of $739.
Net loss for the first quarter of 1995 was reduced to $987
from $1,497 in the corresponding period of 1994.
Liquidity and Capital Resources
The company generated cash from operating activities in the
first quarter of 1995 totalling $11,171, versus $7,722 from
continuing operating activities in the comparable period in 1994.
In 1994, $9,076 of cash was used to fund the operating activities
of discontinued operations, while in 1995, there was a special
dividend payment to common stockholders of $2.00 per share,
amounting to $17,835. Including the effect of the dividend
payment, net cash flow was a negative $6,153 in 1995 compared
with a negative $340 in 1994.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations, continued
As of March 31, 1995, the company's short-term lines of
credit amounted to approximately $33,574. The availability of
these lines of credit is reduced by any letters of credit
outstanding under the lines. At March 31, 1995, the company had
no outstanding borrowings and $8,753 in outstanding letters of
credit.
The company believes that its cash and short-term
investments, together with lines of credit and funds generated
from operations will be adequate to cover foreseeable future
requirements.
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Shareholders of the company (the
"Annual Meeting") was held on April 19, 1995. In addition to the
election of directors, shareholders were asked to vote on a
proposal to approve the Amendment and Restatement of the 1990
Executive Stock Plan.
The first table below sets forth the total number of votes
for and withheld as to each of the eight candidates for director,
all of whom were elected at the Annual Meeting.
The second table below sets forth the total number of votes
for and against and the abstentions and broker non-votes as to
the approval of the Amendment and Restatement of the 1990
Executive Stock Plan. An affirmative vote of a majority of the
shares represented and entitled to vote was required for passage.
Abstentions, or shares represented by proxies marked "abstain,"
had the same effect as a vote against the proposal. The failure
of a broker or other nominee to vote shares for a beneficial
owner had no effect on the proposal. The proposal received an
affirmative vote of approximately 52% of the shares represented
and entitled to vote.
Item 4. Submission of Matters to a Vote of Security Holders,
continued
Table 1
Broker
Nominee For Withheld Against Abstain Non-Votes
Jack J. Agresti 7,652,757 554,865 N/A N/A N/A
Duane E. Atkinson 7,858,460 349,162 N/A N/A N/A
Ray N. Atkinson 7,873,538 334,084 N/A N/A N/A
William E. Burch 7,783,585 424,037 N/A N/A N/A
J. Phillip Frazier 7,879,199 328,423 N/A N/A N/A
Donald R. Kayser 7,774,069 433,553 N/A N/A N/A
Ross J. Turner 7,782,317 425,305 N/A N/A N/A
John F. Whitsett 7,936,036 271,586 N/A N/A N/A
Table 2
Broker
For Against Abstain Non-Votes
Approval of Amendment
and Restatement of the
1990 Executive Stock
Plan 3,925,423 2,410,530 1,193,316 876,353
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit No. Description
10.1 1990 Executive Stock Plan as Amended and
Restated
27.1 Financial Data Schedule
(b) No reports on Form 8-K were filed during the period.
GUY F. ATKINSON COMPANY OF CALIFORNIA
AND CONSOLIDATED SUBSIDIARIES
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant had duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
GUY F. ATKINSON COMPANY
OF CALIFORNIA
s/ Herbert D. Montgomery
Senior Vice President,
Chief Financial Officer
and Treasurer
May 11, 1995