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 July 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 1-7567
------
URS CORPORATION
---------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 94-1381538
----------------------------- -------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
100 California Street, Suite 500
San Francisco, California 94111-4529
--------------------------------- ----------
(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
--- ---
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 September 1, 1995
---------------------------- --------------------------------
Common stock, $.01 par value 7,142,331
1
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 are based upon the weighted average number of common
shares outstanding during the period plus shares issuable under
warrants and stock options that have a dilutive affect.
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 three and nine month periods ended July 31, 1995 are not
necessarily indicative of the operating results for the full
year.
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheets
July 31, 1995 and October 31, 1994 . . . 2
Consolidated Statements of Operations
Three months and nine months ended
July 31, 1995 and 1994 . . . . . . . . 3
Consolidated Statements of Cash Flows
Nine months ended July 31, 1995 and 1994 4
Item 2. Management's Discussion and Analysis of
Financial Condition and
Results of Operations . . . . . . . . 5
PART II. OTHER INFORMATION:
Item 6. Exhibits and Reports on Form 8-K . . . 7
2
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
------- --------------------
URS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
-------------------------------------
July 31, October 31,
ASSETS 1995 1994
(unaudited)
Current assets:
Cash $ 6,447 $ 9,457
Accounts receivable, less allowance for
doubtful accounts of $539 and $495 34,533 30,132
Costs and accrued earnings in excess of
billings on contracts in process, less
allowances for losses of $868 and $646 12,083 13,747
Prepaid expenses and other 2,034 929
------- ------
Total current assets 55,097 54,265
Property and equipment at cost, net 5,859 5,469
Goodwill, net 7,928 4,787
Other assets 743 693
------- ------
$69,627 $65,214
======= ======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 6,384 $ 9,440
Accrued salaries and wages 7,200 5,700
Accrued expenses 7,667 5,451
------- ------
Total current liabilities 21,251 20,591
Long-term debt, including related parties 9,828 9,270
Deferred compensation and other 1,148 1,380
------- ------
Total liabilities 32,227 31,241
------- ------
Shareholders' equity:
Common shares, par value $.01; authorized
20,000 shares; issued 7,106 and 7,019
shares 78 71
Treasury Stock (276) (59)
Additional paid-in capital 31,796 30,261
Retained earnings since February 21, 1990,
date of quasi-reorganization 5,802 3,700
Total shareholders' equity 37,400 33,973
------ ------
$69,627 $65,214
====== ======
3
URS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
-------------------------------------
Three months ended Nine Months Ended
July 31, July 31,
------------------ -----------------
1995 1994 1995 1994
---- ---- ---- ----
(unaudited) (unaudited)
Revenues $44,456 $41,333 $129,573 $118,606
------ ------ ------- -------
Expenses:
Direct operating 26,404 25,455 77,956 73,034
Indirect, general and
administrative 15,992 14,428 46,576 41,587
Interest expense, net 374 335 1,044 993
------ ------ ------ -------
42,770 40,218 125,576 115,614
Income before taxes 1,686 1,115 3,997 2,992
Income tax expense 350 130 810 340
------ ------ ------- -------
Net income $ 1,336 $ 985 $ 3,187 $ 2,652
====== ====== ======= =======
Primary and fully diluted
income per share $ .18 $ .14 $ .44 $ .37
====== ====== ======= =======
4
URS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Nine Months Ended
July 31,
-----------------
1995 1994
---- ----
(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $3,187 $2,652
----- -----
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Depreciation and amortization 2,142 1,771
Changes in current assets and liabilities:
Increase in accounts receivable
and costs and accrued earnings in excess
of billings on contracts in process (1,661) (2,802)
Increase in prepaid expenses (1,067) (126)
Increase (decrease) in accounts payable, accrued
salaries and wages and accrued expenses (858) 1,246
Decrease in deferred income taxes (123) -
Other, net (201) 45
------ ------
Total adjustments (1,768) 134
------ ------
Net cash provided by operating activities 1,419 2,786
------ ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Payment for business acquisition (3,596) -
Capital expenditures (1,068) (1,105)
Other 43 -
----- -----
Net cash used by investing activities (4,621) (1,105)
----- -----
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase of common shares (217) -
Proceeds from sale of common shares 99 75
Proceeds from exercise of stock options 310 -
Other - 1,003
----- -----
Net cash provided by financing activities 192 1,078
----- -----
Net increase (decrease) in cash (3,010) 2,759
Cash at beginning of period 9,457 6,628
----- -----
Cash at end of period $6,447 $9,387
===== =====
Supplemental information:
Interest paid $1,065 $1,035
Taxes paid 939 249
----- -----
$2,004 $1,284
===== =====
5
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) -
----- -----
Liabilities assumed $1,356 $ -
===== =====
6
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
---------------------
Third quarter ended July 31, 1995 vs. July 31, 1994
---------------------------------------------------
The Company's revenues were $44,456,000 for the third
quarter ended July 31, 1995, an increase of $3,123,000, or 8% over the
amount reported for the same period last year. The growth in revenues
is generally attributable to an increase in demand for the Company's
services, on both infrastructure and environmental projects. The
revenues generated from the Company's three largest environmental
contracts (Navy CLEAN, EPA ARCS 9 & 10 and EPA ARCS 6, 7 & 8) were
$8,554,000 for the quarter ended July 31, 1995, compared to
$10,262,000 for the same period last year.
Direct operating expenses for the quarter ended July 31,
1995, which consist of direct labor and other direct expenses
including subcontractor costs, increased $949,000, or 4% over the
amount reported for the same period last year. Indirect, general and
administrative expenses were $15,992,000 for the third quarter ended
July 31, 1995, an increase of $1,564,000, or 11% above the amount
reported for the same period last year. Expenses increased in general
due to higher levels of revenues.
The Company earned $1,686,000 before income taxes for the
third quarter ended July 31, 1995, compared to $1,115,000 for the same
period last year. For Federal income tax purposes, the Company has
available net operating loss carryforwards which partially off-set
otherwise taxable income. For state income tax purposes, net
operating loss carryforwards are not necessarily available to off-set
income subject to tax. Accordingly, the Company's effective income
tax rate for the quarter ended July 31, 1995 was approximately 20%.
The Company reported net income of $1,336,000 or $.18 per
share, for the third quarter ended July 31, 1995, compared with
$985,000, or $.14 per share for the same period last year.
7
Nine months ended July 31, 1995 vs. July 31, 1994
-------------------------------------------------
The Company's revenues were $129,573,000 for the nine months
ended July 31, 1995, an increase of $10,967,000, or 9% over the amount
reported for the same period last year. The growth in revenues is
attributable to all areas of the Company's business including
infrastructure projects involving transportation systems,
institutional and commercial facilities and environmental projects.
The revenues generated from the Company's three largest environmental
contracts (Navy CLEAN, EPA ARCS 9 & 10 and EPA ARCS 6, 7 & 8) were
$28,847,000 for the nine months ended July 31, 1995, compared to
$28,192,000 for the same period last year.
Direct operating expenses for the nine months ended July 31,
1995, which consist of direct labor and other direct expenses
including subcontractor costs, increased $4,922,000, or 7% over the
amount reported in the same period last year. The increase in direct
operating expenses is attributable to the overall increase in the
Company's business. Indirect, general and administrative expenses
were $46,576,000 for the nine months ended July 31, 1995, an increase
of $4,989,000, or 12% over the amount reported for the same period
last year. The increase in indirect, general and administrative
expenses is primarily due to an increase in business activity.
The Company earned $3,997,000 before income taxes for the
nine months ended July 31, 1995 compared to $2,992,000 for the same
period last year. For Federal income tax purposes, the Company has
available net operating loss carryforwards to partially off-set
otherwise taxable income. For state income tax purposes, such amounts
are not necessarily available to off-set income subject to tax.
Accordingly, the Company's effective income tax rate for the nine
months ended July 31, 1995 is approximately 20%.
The Company reported net income of $3,187,000, or $.44 per
share, for the nine months ended July 31, 1995, compared with
$2,652,000, or $.37 per share for the same period last year.
The Company's backlog at July 31, 1995 was $184,130,000, as
compared to $159,100,000 at October 31, 1994.
Liquidity and Capital Resources
-------------------------------
At July 31, 1995, the Company had working capital of
$33,846,000, an increase of $172,000 from October 31, 1994. The
Company also has $14,800,000 in available borrowing capacity under its
bank line of credit. It did not borrow on this line in the nine
months ended July 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.
8
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 July 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 September 14, 1995
URS CORPORATION
/s/ Kent P. Ainsworth
----------------------------------
Kent P. Ainsworth
Vice President and
Chief Financial Officer
(Principal Accounting Officer)
9
EXHIBIT INDEX
-------------
Exhibit Page
No. Description No.
---------------------------------------------------------------------
27 Financial Data Schedule 11
10