UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
/ X / QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
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SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
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SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number: 2-88526
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PETROLEUM HEAT AND POWER CO., INC.
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(Exact name of registrant as specified in its charter)
Minnesota 06-1183025
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2187 Atlantic Street, Stamford, Connecticut 06902
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(Address of principal executive office) (Zip Code)
(203) 325-5400
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(Registrant's telephone number, including area code)
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(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 Sections 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) had been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
As of June 30, 1995 there were 22,855,097 shares of the Registrant's Class A
Common Stock, 15,053 shares of the Registrant's Class B Common Stock and
2,597,519 shares of the Registrant's Class C Common Stock outstanding.
This Report contains a total of 15 pages.
-2-
Petroleum Heat and Power Co., Inc. and Subsidiaries
Index to Form 10-Q
Page
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Part 1 Financial Information:
Item 1 - Financial Statements
Condensed Consolidated Balance Sheets
June 30, 1995 and December 31, 1994 3
Consolidated Statements of Operations for the
Second Quarters Ended
June 30, 1995 and June 30, 1994
and the Six Months Ended
June 30, 1995 and June 30, 1994 4
Consolidated Statements of Cash Flows for the
Six Months Ended
June 30, 1995 and June 30, 1994 5 - 6
Notes to Condensed Consolidated Financial
Statements 7
Item 2 - Management's Discussion and Analysis of
Financial Conditions and Results of Operations 8 - 13
Part 2 Other Information:
Item 6 - Exhibits and Reports on Form 8-K 14
Signature 15
-3-
PETROLEUM HEAT AND POWER CO., INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
(In thousands) June 30, December 31,
Assets 1995 1994
----- ------------
Current Assets:
Cash $ 45,152 $ 15,474
Accounts receivable (net of allowance of
$2,767 and $1,769) 60,603 87,246
Inventories 18,907 21,746
Prepaid expenses 7,481 7,382
Notes receivable and other current assets 2,510 1,279
--------- ---------
Total current assets 134,653 133,127
--------- ---------
Property, plant and equipment - net 127,882 127,174
--------- ---------
Intangible assets (net of accumulated amortization
of $256,839 and $243,115)
Customer lists 99,714 102,636
Deferred charges and pension costs 37,244 32,692
--------- ---------
136,958 135,328
--------- ---------
Other assets 2,068 1,545
--------- ---------
$ 401,561 $ 397,174
========= =========
Liabilities and Stockholders' Equity (Deficiency)
Current liabilities:
Current debt $ 2,598 $ 5,617
Current maturities of cumulative redeemable
preferred stock 4,167 4,167
Accounts payable 7,789 19,786
Customer credit balances 19,574 26,903
Unearned service contract revenue 12,826 14,334
Accrued expenses and other liabilities 32,354 33,975
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Total current liabilities 79,308 104,782
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Supplemental benefits and other liabilities 2,122 2,961
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Pension plan obligation 9,016 9,029
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Notes payable and other long-term debt 33,630 99,681
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Senior notes payable 35,200 42,632
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Subordinated notes payable 285,200 167,632
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Star Gas preferred stock -- 19,966
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Cumulative redeemable exchangeable preferred stock 16,667 16,667
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Stockholders' equity (deficiency):
Common stock - par value $.10 per share 2,547 2,412
Additional paid-in capital 77,520 72,296
Deficit (131,718) (132,953)
Minimum pension liability adjustment (6,651) (6,651)
--------- ---------
(58,302) (64,896)
Note receivable from stockholder (1,280) (1,280)
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Total stockholders' equity (deficiency) (59,582) (66,176)
--------- ---------
$ 401,561 $ 397,174
========= =========
See accompanying notes to consolidated financial statements.
-4-
Petroleum Heat and Power Co., Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data) Three Months Six Months
Ended June 30, Ended June 30,
---------------------- -------------------------
1995 1994 1995 1994
---------- ---------- ---------- ----------
Net sales $ 87,639 $ 69,267 $ 341,376 $ 336,060
Cost of sales 61,242 51,651 208,574 214,913
---------- ---------- ---------- ----------
Gross profit 26,397 17,616 132,802 121,147
---------- ---------- ---------- ----------
Selling, general and administrative expenses 30,072 21,712 62,077 46,638
Direct delivery expense 6,492 5,094 20,171 19,809
Amortization of customer lists 5,244 4,809 10,696 9,685
Depreciation and amortization of plant and
equipment
2,919 1,403 5,722 2,768
Amortization of deferred charges 1,551 1,557 3,028 3,053
Provision for supplemental benefits 336 69 671 140
---------- ---------- ---------- ----------
Operating income (loss) (20,217) (17,028) 30,437 39,054
Other income (expense):
Interest expense (10,356) (5,864) (20,116) (11,864)
Interest income 884 623 1,406 938
Other (135) 52 723 72
---------- ---------- ---------- ----------
Income (loss) before income taxes, equity
interest and
extraordinary item (29,824) (22,217) 12,450 28,200
Income taxes (benefit) (25) (51) 375 550
---------- ---------- ---------- ----------
Income (loss) before equity interest and
extraordinary item
(29,799) (22,166) 12,075 27,650
Equity in earnings (losses) of Star Gas
Corporation
-- (1,595) -- 668
---------- ---------- ---------- ----------
Income (loss) before extraordinary item (29,799) (23,761) 12,075 28,318
Extraordinary item - loss on early
extinguishment of debt
(1,436) -- (1,436) (654)
---------- ---------- ---------- ----------
Net income (loss) $ (31,235) $ (23,761) $ 10,639 $ 27,664
========== ========== ========== ==========
Net income (loss) applicable to common stock $ (31,235) $ (23,761) $ 8,869 $ 25,865
Income (loss) before extraordinary item per
common share
Class A Common Stock $ (1.17) $ (1.11) $ .41 $ 1.22
Class B Common Stock -- .41 -- .82
Class C Common Stock (1.17) (1.11) .41 1.22
Extraordinary loss per common share
Class A Common Stock $ ( .06) -- $ (.06) $ (.03)
Class B Common Stock -- -- -- --
Class C Common Stock (.06) -- (.06) (.03)
Net income (loss) per common share
Class A Common Stock $ (1.23) $ (1.11) $ .35 $ 1.19
Class B Common Stock -- .41 -- .82
Class C Common Stock (1.23) (1.11) .35 1.19
Cash dividends declared per common stock
Class A Common Stock $ .15 $ .14 $ .30 $ .28
Class B Common Stock -- .41 -- .82
Class C Common Stock .15 .14 .30 .28
Weighted average number of common stock
outstanding
Class A Common Stock 22,855 18,993 22,556 18,993
Class B Common Stock 15 217 16 217
Class C Common Stock 2,598 2,545 2,598 2,545
See accompanying notes to condensed consolidated financial statements.
-5-
Petroleum Heat and Power Co., Inc.
and Subsidiaries
Consolidated Statement of Cash Flows
(Unaudited)
(In thousands)
Six Months Ended
June 30
1995 1994
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Cash flows from operating activities:
Net income $ 10,639 $ 27,664
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization of customer lists 10,696 9,685
Equity in earnings of Star Gas Corporation -- (668)
Depreciation and amortization of plant and
equipment
5,722 2,768
Amortization of deferred charges 3,028 3,053
Provision for losses on accounts receivable 738 976
Provision for supplemental benefits 671 140
Loss on early extinguishment of debt 1,436 654
Gain on sale of business (788) --
Other 52 (85)
Decrease in accounts receivable 25,905 17,696
Decrease in inventory 2,839 2,129
Decrease (increase)in prepaid expenses, notes
receivable and other current assets (1,330) 414
Decrease (increase) in other assets (523) 20
Decrease in accounts payable (11,997) (10,816)
Decrease in customer credit balances (7,329) (12,982)
Decrease in unearned service contract revenue (1,508) (1,062)
Increase (decrease) in accrued expenses (2,150) 1,340
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Net cash provided by operating
activities
36,101 40,926
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Cash flows from (used for) investing activities:
Acquisitions (12,893) (16,676)
Capital expenditures (4,960) (1,319)
Proceeds from sale of business 1,477 --
Proceeds from sales of fixed assets 298 197
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Net cash used for investing activities (16,078) (17,798)
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-6-
Petroleum Heat and Power Co., Inc.
and Subsidiaries
Consolidated Statement of Cash Flows
(Continued)
(In thousands)
Six Months Ended
June 30,
---------
1995 1994
---- ----
Cash flows from (used for) financing activities:
Net proceeds from issuance of common stock $ 18,516 --
Net proceeds from issuance of subordinated notes 120,350 71,087
Repayment of notes payable (80,270) (50,655)
Credit facility borrowings -- 21,000
Credit facility repayments (5,100) (49,000)
Repurchase of common stock (13,689) --
Release of cash collateral account -- 20,000
Redemption of preferred stock (19,966) --
Restricted cash held as collateral for payment
of a long-term note payable
-- (1,663)
Cash dividends paid (9,071) (7,912)
Other (1,115) (1,475)
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Net cash from financing activities 9,655 1,382
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Net increase in cash 29,678 24,510
Cash at beginning of year 15,474 4,614
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Cash at end of period $ 45,152 $ 29,124
========= =========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 14,601 $ 10,130
Income taxes 219 163
Non-cash investing activity:
Acquisitions -- (1,630)
Non-cash financing activity:
Issuance of note payable -- 1,630
See accompanying notes to condensed consolidated financial statements.
-7-
Petroleum Heat and Power Co., Inc.
and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. Basis of Presentation
---------------------
The financial information included herein is unaudited; however,
such information reflects all adjustments (consisting solely of
normal recurring adjustments) which are, in the opinion of
management, necessary for the fair statement of results for the
interim periods.
Certain reclassifications were made to the quarter ended June 30,
1995 to conform to the June 30, 1995 six month presentation.
The results of operations for the six months ended June 30, 1995
are not necessarily indicative of the results to be expected for
the full year.
2. Per Share Data
--------------
Net income (loss) per common shares are computed utilizing the
three class method based upon the weighted average number of shares
of Class A Common Stock, Class B Common Stock and Class C Common
Stock outstanding after adjusting net income for preferred
dividends declared aggregating $1,770,000 and $1,799,000 for the
six months ended June 30, 1995 and 1994 respectively. Fully diluted
net income (loss) per common shares are not presented because the
effect is not material.
3. Acquisitions/Sale
-----------------
During the six month period ending June 30, 1995, the Company
acquired the customer lists and equipment of two unaffiliated fuel
oil dealers. The aggregate consideration for these acquisitions,
accounted for by the purchase method, was approximately $ 12.9
million. Sales and net income of the acquired companies are
included in the consolidated statement of income from the
respective dates of acquisition.
The Company sold its New Hampshire operations in March 1995 to an
unaffiliated fuel oil dealer. The Company received proceeds of
approximately $1.5 million and realized a gain on this transaction
of approximately $0.8 million.
Had these acquisitions and disposal occurred at the beginning of
the period, the pro forma unaudited results of operations for the
six months ended June 30, 1995 would have been as follows:
(In thousands, Except Per Share)
-------------------------------
Net Sales $346,855
Net Income 10,403
Net Income Per Common Share:
Class A Common Stock $ .34
Class B Common Stock --
Class C Common Stock $ .34
-8-
Petroleum Heat and Power Co., Inc. and Subsidiaries
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS
AND RESULTS OF OPERATIONS
-------------------------
Six Months Ended June 30, 1995
Compared to Six Months Ended June 30, 1994
------------------------------------------
Net sales increased 1.6% to $341.4 million for the first six months of 1995 from
$336.1 million for the comparable period in 1994. While the December 1994
acquisition of Star Gas Corporation ("Star Gas"), the country's tenth largest
retail propane distributor generated an additional $51.4 million of sales in the
first half of 1995, this was offset by a decline of $46.1 million in home
heating oil sales attributable to the first quarter of 1995 when temperatures
were 17.7% warmer than the comparable 1994 period.
Home heating oil and propane volume declined only 1.0% during the first half of
1995 compared to the first six months of 1994, despite the extremely warm first
quarter, as the gallonage resulting from the acquisition of Star Gas in December
1994, nine heating oil acquisitions completed in 1994 and two in 1995, offset
the effect of the abnormal weather. Total retail heating oil and propane volume
declined only 2.8 million gallons to 290.3 million gallons, as the 42.1 million
gallons realized from Star Gas was offset by the weather related 45.0 million
gallon decline in the home heating oil division. The decrease in home heating
oil volume was due not only to the direct impact of the warmer winter weather,
but also to lower consumption rates associated with the warmer temperatures,
account attrition and more efficient delivery scheduling begun in the second
quarter of 1994 causing certain deliveries historically made in this period to
be delayed until the more delivery efficient fall and winter periods.
Gross profit grew 9.6%, to $132.8 million, despite the volume decline due to
$27.7 million of additional gross profit provided by Star Gas and improved home
heating oil gross profit margins. Home heating oil gross profits declined to a
lesser extent than volume due to a 1.2(cent) per gallon increase in home heating
oil gross profit margins and of greater significance, a $2.5 million reduction
in the net cost of providing heating equipment repair and maintenance service.
Despite the effect of normal inflation on service costs, the Company was able to
reduce these expenses in response to the weather related lower volume.
Direct delivery expense increased $0.4 million to $20.2 million for the six
months ended June 30, 1995, as $3.5 million of expenses associated with the Star
Gas volume were partially offset by a 16.0% savings in the heating oil division.
The improved heating oil division delivery performance is attributable to the
operating expense control program, which began in the summer of 1994, and which
has not only improved delivery efficiencies generally but also enabled the
Company to respond to the weather related unexpected reduction in volume.
-9-
Selling, general, and administrative expenses increased $15.4 million to $62.1
million for the first half of 1995 due solely to the additional expenses
associated with Star Gas. There was virtually no increase in these expenses at
the Company's home heating oil division as additional costs associated with the
Company's expansion into three new markets since the first half of 1994 and
larger account base was offset by a $5.0 million reduction in marketing and
other branch expenses.
Depreciation expense increased $3.0 million to $5.7 million for the six months
ended June 30, 1995. This increase was due to $2.6 million of depreciation
associated with Star Gas and a $0.4 million increase in the heating oil
division associated with the Company's increased size and asset base.
Amortization of customer lists, deferred charges and other non-cash expenses
increased $1.5 million to $14.4 million for the first half of 1995. These
non-cash expenses increased primarily due to $1.4 million of intangible asset
amortization associated with Star Gas.
Operating income declined $8.6 million to $30.4 million for the first half of
1995 due to a $4.1 million EBITDA* decline and an increase of $4.5 million in
non-cash expenses. While Star Gas contributed an additional $4.8 million of
operating income, this was offset by a $13.4 million decline at the heating oil
division, as improvements in gross profit margins and reduced operating expenses
could not offset the impact of the warm winter weather on volume.
Net interest expense increased by $7.8 million to $18.7 million for the first
half of 1995 due to an increase in average debt outstanding of approximately
$138.8 million. The funds from these increased borrowings were used to finance a
portion of the 1994 and 1995 acquisitions, including Star Gas, and will be used
to fund the Company's on-going acquisition program. These borrowings, combined
with other sources of cash flow, resulted in an increase in the Company's cash
balance to $45.2 million at June 30, 1995.
Other income of $0.7 million for the first half of 1995 primarily represents the
gain associated with the sale of certain customer lists and other assets of a
non-strategic home heating oil business located in New Hampshire.
Income taxes were $0.4 million for the first half of 1995 compared to $0.6
million for the six months ended June 30, 1994 and represent certain state
taxes. The Company has not provided for any Federal income taxes for the first
half of 1995 due to the availability of Federal income tax net operating loss
carryforwards which as of June 30, 1995 amount to $55.3 million.
----------------------------
*EBITDA is defined as operating income before depreciation, amortization,
non-cash charges relating to the grant of stock options to executives of the
Company, non-cash charges associated with deferred compensation plans, and other
non-cash charges of a similar nature, if any.
-10-
In April 1995, the Company recorded an extraordinary charge of $1.4 million
associated with the refinancing of $12.8 million of debt maturing in March 2000.
In the comparable period in 1994, the Company also recorded an extraordinary
charge of $0.7 million when $50.0 million in long-term notes that were scheduled
to mature in June 1994 were refinanced.
Net income declined from $27.7 million for the first half of 1994 to $10.6
million for the first half of 1995. This decline was due primarily to the
weather related decline in EBITDA, increased non-cash expenses and higher
interest expense associated with the Company's larger size.
Despite the effects of the abnormally warmer temperatures experienced in the
first quarter of 1995, EBITDA declined only $4.1 million to $50.6 million for
the six months ended June 30, 1995. While Star Gas contributed an additional
$8.7 million of EBITDA in the first half of 1995 compared to 1994 and the home
heating oil division gross profit margin increased and operating expenses
declined by 4.7%, the Company experienced a EBITDA decline due to the abnormally
warm weather experienced in the first quarter of the year which resulted in a
$12.9 million decrease in the home heating oil division's EBITDA.
-11-
Three Months Ended June 30, 1995
Compared to Three Months Ended June 30, 1994
--------------------------------------------
Net sales increased $18.4 million or 26.5% from $69.3 million in the second
quarter of 1994 to $87.6 million for the second quarter of 1995. This increase
was primarily due to the additional $15.5 million of sales generated at Star Gas
and an increase in sales in the heating oil division of $2.9 million
attributable mainly to the Company's on-going acquisition program.
Retail volume of home heating oil and propane increased 12.6 million gallons or
24.3% to 64.7 million gallons during the second quarter of 1995 due to the 11.2
million gallons sold by Star Gas and an increase in home heating oil volume of
1.4 million gallons. The growth in volume experienced in the heating oil
division was primarily attributable to the nine acquisitions made in 1994 and
the two in 1995 which was partially offset by account attrition and the impact
of an operating expense control program which shifted certain home heating oil
deliveries to the more efficient fall and winter periods.
Gross profit increased 50.0%, or $8.8 million, to $26.4 million for the second
quarter of 1995. Gross profits grew more significantly than volume due to the
impact of Star Gas, which has higher gross profit margins than the heating oil
division. Home heating oil gross profit growth of approximately 2.3% was
attributable to the increased volume and most importantly, a reduction in the
cost of providing heating equipment repair and maintenance service associated
with the Company's cost control program. As expected, home heating oil margins
declined from the levels achieved in the second quarter of 1994 by 0.9 cents per
gallon due to the impact of operations in three new marketing areas whose
comparatively lower per gallon gross profit margins had the effect of decreasing
the overall heating oil division's gross profit margin. However, for those
markets in which the heating oil division operated during both periods, the 1995
margins were approximately equal to the unusually high levels achieved during
the second quarter of 1994. The 1995 margins were representative of normal
increases when compared to historic levels.
Direct delivery expense increased $1.4 million to $6.5 million for the second
quarter of 1995. This increase was due to $1.5 million of Star Gas related
delivery expenses offset by a reduction of $0.1 million in the heating oil
division. Despite an increase in home heating oil volume, delivery expenses
declined 2.4% in absolute terms and 5.0% per gallon due to the Company's
operating expense control program that commenced in the third quarter of 1994.
Selling, general and administrative expenses increased $8.4 million to $30.1
million. This increase is due to an additional $7.5 million of expenses
associated with servicing the Star Gas customer base and an increase in the
heating oil division of $0.9 million due primarily to the additional costs
associated with the operations in three new marketing areas. Offsetting the
increase in these expenses related to the Company's larger customer base serving
three new geographic markets was a $2.3 million quarterly reduction in the
heating oil division's branch and
-12-
marketing expenses resulting from the effective implementation of the operating
expense control program.
Depreciation expense increased from $1.4 million in the second quarter of 1994
to $2.9 million in the second quarter of 1995. This increase was primarily due
to $1.3 million of depreciation relating to Star Gas as well as a $0.2 million
increase in the heating oil division associated with the Company's acquisition
program.
Amortization of customer lists, deferred charges and other non-cash charges
increased $0.7 million to $7.1 million for the second quarter of 1995. These
non-cash expenses increased due to approximately $0.7 million of amortization
associated with the Star Gas acquisition.
The operating loss for the second quarter of 1995 was $3.2 million greater than
the comparable period of 1994. This increase was primarily due to an increase of
$2.2 million in non-cash expenses and a $1.0 million decline in EBITDA. EBITDA
declined during this non heating season, as the home heating oil costs
associated with servicing a larger home heating oil customer base and operating
in three new markets, as well as the off season EBITDA loss at Star Gas, offset
increased gross profits and improved service, delivery and marketing expenses.
Net interest expense increased by $4.2 million to $9.5 million due to increased
borrowings associated with the Company's 1994 and first half of 1995
acquisitions, primarily Star Gas, and to provide funding for the Company's
on-going acquisition program. Average debt outstanding increased approximately
$146.5 million as a result of the Star acquisition and from debt incurred to
provide a portion of the funds to finance the nine 1994 heating oil
acquisitions, the two 1995 acquisitions, with the remainder contributing to the
$11.6 million increase in average cash balances during the quarter.
In the second quarter of 1995, the Company recorded an extraordinary loss of
$1.4 million representing the prepayment premium associated with the refinancing
of $12.8 million of floating rate debt due 2000 (15.4% annual rate at time of
repayment), with a portion of the proceeds from the $125.0 million 12.25%
Subordinated Notes sold in February 1995.
The net loss for the second quarter of 1995 increased $7.5 million from the
prior year's comparable period due to the cost of operating a larger business in
this non-heating season period, increases in acquisition related non-cash
expenses, the extraordinary loss associated with the debt refinancing and higher
interest expense.
The seasonally related EBITDA loss increased only $1.0 million to $10.2 million
for the second quarter of 1995 versus the comparable period of 1994 as the
increase in heating oil and propane gross profit and improvements in heating oil
service, delivery and marketing expenses were offset by the additional costs
associated with servicing a larger customer base.
-13-
Liquidity and Financial Condition
----------------------------------
In February 1995, the Company completed public offerings of $125.0 million of
its 12 1/4% Subordinated Debentures due February 1, 2005 and approximately 2.9
million shares of Class A Common Stock. The net proceeds of the two
offeringswere approximately $138.9 million. In February 1995, $98.9 million of
the proceeds were used to purchase $85.4 million of long term debt and preferred
stock of Star Gas Corporation and to retire approximately 1.5 million shares of
Class A Common Stock issued as part of the Star Gas acquisition in December
1994. The Company applied $14.2 million of the proceeds in April 1995, to repay
approximately $12.8 million of long-term debt due in March 2000. The balance of
the net proceeds, approximately $25.8 million, will finance the Company's
on-going acquisition program.
Net Cash provided by operating activities of $36.1 million, along with $25.8
million of unapplied net proceeds from the above mentioned public offerings
amounted to $61.9 million for the six months ended June 30, 1995. These funds
were utilized in investing activities for acquisitions and the purchase of fixed
assets ($17.6 million) and in financing activities to pay dividends of $9.1
million, to repay working capital borrowings of $5.1 million, to make principal
payments on other long-term obligations of $0.8 million and for other long-term
financing requirements of $1.1 million. In addition, the sale of the Company's
New Hampshire operations generated $1.5 million of proceeds. As a result of the
above activity, the Company's cash balance increased by $29.7 million to $45.2
million at June 30, 1995.
The Company currently has available a $140 million credit facility consisting of
a $75 million working capital commitment, a $50 million acquisition facility and
a $15 million letter of credit commitment to secure certain insurance
requirements. At June 30, 1995 there were no outstanding working capital
borrowings, $16.3 million remained available under the acquisition facility and
the Company had $55.3 million of working capital.
For the remainder of 1995, the Company anticipates paying dividends on its
Common Stock of approximately $7.6 million, redeeming $4.2 million of Redeemable
Preferred Stock and paying $1.5 million in preferred dividends. Based on the
Company's current cash position, bank credit availability, expected net cash
provided by operating activities and the $25.8 million of available proceeds
from the February 1995 public offerings, the Company expects to be able to meet
all of the above mentioned obligations in 1995, as well as meet all of its other
current obligations as they become due.
Supplemental Financial Information
During the first half of 1995, the Company generated $29.0 million in NIDA*
compared to $40.9 million for the first half of 1994. This $11.9 million
decrease was primarily due to the weather related decline in EBITDA, the
extraordinary loss associated with prepaying certain debt, and increased
interest expense associated with increased borrowings used to finance a portion
of the Company's recent acquisitions as well as to provide funds for the
Company's on-going acquisition program.
-------------------------------
* NIDA is defined as net income (loss), plus depreciation, amortization,
non-cash charges relating to the grant of stock options to executives of the
Company, non-cash charges associated with deferred compensation plans and other
non-cash charges of a similar nature, if any, less dividends accrued on
preferred stock, excluding net income (loss) derived from investments accounted
for by the equity method, except to the extent of any cash dividends received by
the Company.
-14-
PART II OTHER INFORMATION
-------------------------
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits Included Within:
------------------------
(27) Financial Data Schedule
(b) Reports on Form 8-K
--------------------
No reports on Form 8-K have been filed during the quarter for which
this report is filed.
-15-
SIGNATURE
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized:
Signature Title Date
--------- ----- ----
Irik P. Sevin President, Chairman of the August 10, 1995
----------------
Irik P. Sevin Board, Chief Executive Officer,
and Chief Financial and
Accounting Officer and Director