FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 1995
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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 1-7567
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URS CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 94-1381538
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(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
100 California Street, Suite 500
San Francisco, California 94111-4529
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 415-774-2700
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
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Indicate the number of shares outstanding of each of
the issuer's classes of common stock, as of the latest
practicable date.
Class Outstanding at February 15, 1995
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Common stock, $.01 par value 7,025,886
URS CORPORATION AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION:
In the opinion of management, the information furnished reflects
all adjustments, consisting only of normal recurring adjustments, which are
necessary for a fair statement of the interim financial information. Net
earnings per share computations have been calculated employing a
methodology consistent with that disclosed in the Company's Annual Report
on Form 10-K for the fiscal year ended October 31, 1994.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been omitted. 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
fiscal year ended October 31, 1994. The results of operations for the
quarterly period ended January 31, 1995 are not necessarily indicative of
the operating results for the full year.
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheets
January 31, 1995 and October 31, 1994 . . . . . . . . 3
Consolidated Statements of Operations
Three months and ended January 31, 1995 and 1994 . . . 4
Consolidated Statements of Cash Flows
Three months ended January 31, 1995 and 1994 . . . . . 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . 6
PART II. OTHER INFORMATION:
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . 8
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PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
URS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
January 31, October 31,
1995 1994
ASSETS ---- ----
(unaudited)
Current assets:
Cash $ 4,262 $ 9,457
Accounts receivable, less allowance for
doubtful accounts of $625 and $495 29,327 30,132
Costs and accrued earnings in excess of
billings on contracts in process, less
allowances for losses of $714 and $646 16,616 13,747
Prepaid expenses and other 1,798 929
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Total current assets 52,003 54,265
Property and equipment at cost, net 5,625 5,469
Goodwill, net 8,254 4,787
Other assets 878 693
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$66,760 $65,214
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 7,966 $ 9,440
Accrued salaries and wages 5,220 5,700
Accrued expenses 7,867 5,451
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Total current liabilities 21,053 20,591
Long-term debt, including related parties 9,404 9,270
Deferred compensation and other 1,517 1,380
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Total liabilities 31,974 31,241
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Shareholders' equity:
Common shares, par value $.01; authorized
20,000 shares; issued 7,029 and 6,989 shares 77 71
Treasury stock (177) (59)
Additional paid-in capital 30,449 30,261
Retained earnings since February 21, 1990,
date of quasi-reorganization 4,437 3,700
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Total shareholders' equity 34,786 33,973
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$66,760 $65,214
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URS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three months ended
January 31,
1995 1994
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(unaudited)
Revenues $40,307 $36,756
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Expenses:
Direct operating 24,429 22,828
Indirect, general and
administrative 14,522 12,878
Interest expense, net 323 329
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39,274 36,035
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Income before taxes 1,033 721
Income tax expense 233 70
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Net income $ 800 $ 651
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Net income per share:
Primary $ .11 $ .10
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Fully diluted $ .11 $ .09
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URS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Three Months Ended
January 31,
1995 1994
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(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 800 $ 651
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Adjustments to reconcile net income to net
cash (used) by operating activities:
Depreciation and amortization 661 547
Changes in current assets and liabilities net of
effects from business acquisition
Increase in accounts receivable and costs
and accrued earnings in excess of billings
on contracts in process (988) (2,226)
(Increase) decrease in prepaid expenses (830) 38
Decrease in accounts payable, accrued
salaries and wages and accrued expenses (842) (2,418)
Other, net (34) (44)
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Total adjustments (2,033) (4,103)
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Net cash (used) by operating activities (1,233) (3,452)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Payment for business acquisition (3,596) -
Capital expenditures (340) (261)
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Net cash (used) by investing activities (3,936) (261)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase of common shares (118) -
Proceeds from exercise of stock options 92 -
Other - 1,000
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Net cash provided (used) by financing activities (26) 1,000
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Net decrease in cash (5,195) (2,713)
Cash at beginning of period 9,457 6,628
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Cash at end of period $ 4,262 $ 3,915
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Supplemental cash flow information:
Interest paid $ 347 $ 404
Taxes paid 72 19
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$ 419 $ 423
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Supplemental schedule of noncash investing and
financing activities:
The Company purchased all of the capital stock
of a complementary business for $3,596,000.
In conjunction with the acquisition, liabilities
were assumed as follows:
Fair value of assets acquired $ 4,952 $ -
Cash paid for the capital stock (3,596) -
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Liabilities assumed $ 1,356 $ -
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URS CORPORATION AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Company reports the results of its operations on a fiscal
year which ends on October 31. This Management Discussion and Analysis
(MD&A) should be read in conjunction with the MD&A and the footnotes to the
Consolidated Financial Statements included in the Annual Report on
Form 10-K for the fiscal year ended October 31, 1994 which was previously
filed with the Securities and Exchange Commission.
Results of Operations
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The Company's revenues were $40,307,000 for the first quarter
ended January 31, 1995, an increase of $3,551,000 or 10% over the amount
reported for the same period last year. The growth in revenue is generally
attributable to an increase in demand for the Company's services. Also,
revenues generated from the Company's three largest indefinite delivery
contracts, the Navy CLEAN, EPA ARCS 9 & 10, and EPA ARCS 6, 7 & 8
contracts, increased in the first quarter of 1995 to $10,790,397 from
$8,055,000 in the first quarter of 1994. The increase in revenues from
these contracts is due to a rise in the level of work assignments currently
being executed.
Direct operating expenses for the quarter ended January 31, 1995,
which consist of direct labor and other direct expenses, including
subcontractor costs, increased $1,601,000, a 7% increase over the amount
reported for the same period last year. This increase is due to increases
in business volume and in subcontractor and direct labor costs.
Indirect general and administrative expenses for the quarter
ended January 31, 1995 increased $1,644,000, or 13% over the amount
reported for the same period last year as a result of an increase in
business volume.
The Company earned $1,033,000 before income taxes for the first
quarter ended January 31, 1995 compared to $721,000 for the same period
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last year. For Federal income tax purposes, the Company has available net
operating loss ("NOL") carryforwards which off-set otherwise taxable
income. For state income tax purposes, net operating loss carryforwards
are not necessarily available to offset income subject to tax. Accord-
ingly, the Company's effective income tax rate for the quarter ended
January 31, 1995 was approximately 23%. This effective income tax rate is
based on the Company's estimate that it is going to use a significant
portion of the unlimited NOL available to it in fiscal year 1995.
The Company reported net income of $800,000, or $.11 per share
for the first quarter ended January 31, 1995, compared with $651,000, or
$.09 per share for the same period last year.
The Company's backlog at January 31, 1995 was $165,663,00, as compared
to $159,100,000 at October 31, 1994.
Liquidity and Capital Resources
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At January 31, 1995, the Company had working capital of
$30,950,000, a decrease of $2,724,000 from October 31, 1994. On January 4,
1995, the Company acquired E.C. Driver and Associates in Florida for a cash
price of $3,596,000. The Company also had $9,800,000 in available
borrowing capacity under its bank line of credit. It did not borrow on
this line during the first quarter ended January 31, 1995.
The Company believes that its existing financial resources,
together with its planned cash flow from operations and its unused bank
line of credit, will provide sufficient capital to fund its operations and
its capital needs for fiscal 1995.
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PART II
OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit 27, Financial Data Schedule.
(b) No reports on Form 8-K were filed during the
quarter ended January 31, 1995.
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.
Dated March 17, 1995
URS CORPORATION
/s/ Kent P. Ainsworth
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Kent P. Ainsworth
Vice President and
Chief Financial Officer
(Principal Accounting Officer)
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