-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HAylPRhDidc0iflI00bPR0eLE+XTCwqSyn2c3JZ5Z/V87cwdoPQaSTrooobRFiUG HnKm5FU9+g21kUEj1ecwmg== 0001011438-03-000058.txt : 20030214 0001011438-03-000058.hdr.sgml : 20030214 20030214173215 ACCESSION NUMBER: 0001011438-03-000058 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030213 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030214 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KEITH COMPANIES INC CENTRAL INDEX KEY: 0001080922 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ENGINEERING SERVICES [8711] IRS NUMBER: 330203193 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-26561 FILM NUMBER: 03568455 BUSINESS ADDRESS: STREET 1: 19 TECHNOLOGY DRIVE CITY: IRVINE STATE: CA ZIP: 92618 BUSINESS PHONE: 949-923-6000 MAIL ADDRESS: STREET 1: 19 TECHNOLOGY DRIVE CITY: IRVINE STATE: CA ZIP: 92618 8-K 1 form_8-k.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------ Form 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): February 13, 2003 THE KEITH COMPANIES, INC. (Exact Name of Registrant as Specified in Charter) California 000-26561 33-0203193 (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 19 Technology Drive Irvine, California 92618 (Address of Principal Executive Offices) (949) 923-6000 (Registrant's Telephone Number) Item 5. OTHER EVENTS. Reference is made to the press release issued on February 13, 2003, which is incorporated herein by this reference. A copy of the press release is attached to this Form 8-K as Exhibit 99.1. Item 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements. None. (b) Pro Forma Financial Information. None. (c) Exhibits. Exhibit 99.1 Press Release dated February 13, 2003. 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 hereunto duly authorized. February 14, 2003 THE KEITH COMPANIES, INC. By: /S/ GARY C. CAMPANARO -------------------------------------- Gary C. Campanaro Chief Financial Officer and Secretary EXHIBIT INDEX EXHIBIT 99.1 Press release announcing 2002 year end results dated February 13, 2003. EX-99 3 exhibit_99-1.txt EXHIBIT 99.1 THE KEITH COMPANIES | TKC NEWS RELEASE FOR FEBRUARY 13 , 2003 AT 7:30 AM ET - ------------------------------------------------- Contact information: The Keith Companies, Inc. FRB | Weber Shandwick 19 Technology Drive Tricia Ross Irvine, CA. 92618 Investor Relations (949) 923-6001 (310) 407-6540 (949) 923-6026 Fax www.keithco.com Contact: Aram Keith, CEO & Chairman of the Board THE KEITH COMPANIES REPORTS RECORD RESULTS FOR YEAR ENDED 2002 o 37% increase in net revenue for the year ended December 31, 2002 o 33% increase in net income for the year ended December 31, 2002 IRVINE, CA (February 13, 2003) ... The Keith Companies, Inc. (Nasdaq: TKCI), an engineering and consulting services firm, today announced financial results for the fourth quarter and year ended December 31, 2002 which included record net revenue for the year driven by acquisitions along with internal growth of 3.3%, from continuing operations. Net revenue and net income for the twelve months ended December 31, 2002 increased 37 percent to $91.6 million and 33 percent to $7.8 million, respectively, which resulted in diluted earnings per share of $0.99 (based upon 7.9 million diluted weighted average shares outstanding). This compares to net revenue during 2001 of $66.8 million with net income of $5.8 million and diluted earnings per share of $0.82 (based upon 7.1 million diluted weighted average shares outstanding). Net revenue for the fourth quarter of 2002 increased 31 percent to $22.3 million with net income up 42 percent to $1.7 million, and diluted earnings per share of $0.22. This compares to net revenue for the fourth quarter of 2001 of $17.1 million with net income of $1.2 million, and diluted earnings per share of $0.16. Net cash provided from operating activities for the year ended December 31, 2002 increased 29% to $10.1 million, compared to $7.8 million during 2001. "Despite various challenging economic conditions, our fourth quarter results capped a strong year for the Company," said Aram Keith, Chairman and CEO of The Keith Companies, Inc. "The diversity of our engineering services and the fact that we serve markets with different economic cycles resulted in overall stable growth for the year. We continue to see strength in the residential real estate and public works industries of our business, and maintain profitability in the energy/industrial industry where demand has slowed. Importantly, we continue to efficiently utilize our workforce and keep a watchful eye on overhead helping the Company to maintain one of the highest operating margins in our sector." NET REVENUE CONTRIBUTIONS FROM ACQUISITIONS Acquired companies (ALNM Group, Inc., acquired March 2002 and Universal Energy, Inc., acquired November 2001) contributed approximately $4.1 million in net revenue for the three months ended December 31, 2002 compared to the corresponding prior year period. For the year ended December 31, 2002, acquired companies contributed approximately $22.5 million in net revenue compared to the year ended December 31, 2001. This $22.5 million includes one month of net revenue contributed by Hook & Associates Engineering ("Hook") (acquired January 2001), nine months of net revenue contributed by Pacific Engineering Corporation (acquired September 2001), ten months of net revenue contributed by ALNM Group, Inc., and eleven months of net revenue contributed by Universal Energy, Inc. STRONG FINANCIAL POSITION The Company's December 31, 2002 balance sheet remains strong with cash and securities of $23.5 million, a current ratio of 3.75:1, a debt to equity ratio of 0.001:1 and shareholders' equity of $63.6 million or $8.47 per share outstanding. DISCONTINUED OPERATIONS The Company made a decision to close three of its divisions during 2002. Two of these divisions relate to the Company's Hook acquisition and were located in Colorado and Wyoming. The third closure related to the Company's internally created Communication division which was located in California. The closures were primarily due to lower than expected operating results and continuing difficult market conditions. In accordance with Generally Accepted Accounting Principles ("GAAP"), the Company has changed the presentation of its "Consolidated Statements of Income" to reflect the results of operations for these discontinued divisions for all periods presented. FINANCIAL GUIDANCE In adherence to the U.S. Securities and Exchange Commission's (SEC) Regulation Fair Disclosure, The Keith Companies provides the following guidance for all investors and encourages all current and potential investors to review the Disclosure Regarding Forward-Looking Statements in this press release as well as all financial documents filed with the SEC. All guidance amounts are before special items and exclude the impact of any potential future acquisitions. The Company reaffirms its financial guidance for 2003. For 2003, the Company estimates net revenue to range from $95.5 million to $103.0 million. During 2002, the Company's financial results were positively impacted by a $498,000 (net of income taxes) purchase price adjustment related to its acquisitions. Excluding this amount from 2002, diluted earnings per share from continuing operations would have been $1.01. The Company forecasts diluted earnings per share for 2003 to be flat to an eleven percent increase over the adjusted $1.01 diluted earnings per share from continuing operations for 2002, which results in a range for 2003 of $1.02 to $1.12 ($0.24 to $0.27 for the first quarter; $0.25 to $0.28 for the second quarter; $0.28 to $0.30 for the third quarter; and $0.25 to $0.27 for the fourth quarter) based upon an estimated 8.1 million weighted average number of diluted shares outstanding. The forecasted diluted earnings per share for 2003 of $1.02 to $1.12 represents between a five percent decline to a five percent increase over 2002 GAAP diluted earnings per share from continuing operations. "Given the current trends in our markets, we believe that 2003 should be another year of profitable growth for the Company," said Keith. "The demand for housing throughout the Southwest continues to outpace the supply. Based on the projects planned by our residential real estate clients, we expect to see additional growth in this area. We are also seeing steady work flow in our public works industry. Despite the continued negative news about public agency budgets, we feel fortunate that we have mostly small to medium sized public works contracts spread across a multitude of agencies and agency types (local, state, special district, etc.), many of which get their finances through end-user fees or pre-funded project budgets. This fact, I believe, makes us less susceptible to any particular budget problems. Finally, we will continue to internally build our presence in the energy/industrial market, which should present good long-term opportunities given the need to replace or refurbish many of the power plants within our geographic reach and the continued need for corporations to enhance efficiency and the quality of their products through automation and design." CONFERENCE CALL TO BE BROADCAST LIVE OVER THE INTERNET The Company will be hosting an earnings conference call, which will be broadcast live over the Internet at 8:30 a.m. Pacific Time on February 13, 2003 and can be accessed by all interested parties at http://www.viavid.com. To listen to the live call, please go to the Web site at least fifteen minutes prior to the start of the call to register, download, and install any necessary audio software. For those unable to participate during the live broadcast, a replay will be available shortly after the call for approximately seven days. ABOUT THE KEITH COMPANIES The Keith Companies, Inc. is a fully integrated, multi-disciplined engineering and consulting services company, with offices located throughout the Western and Midwestern United States. The Keith Companies' professionals provide a wide spectrum of skilled resources including land planning, engineering, surveying, mapping, environmental studies, and water and cultural resources that are needed to effectively plan, engineer, and design state-of-the-art private and public facilities. Additionally, the Company provides mechanical, electrical, chemical, power/energy engineering, and other industrial engineering services to design and improve the efficiency and reliability of automated and manufacturing processes, production lines, and fire protection systems. The Keith Companies benefits from a diverse public and private client base varying from residential and commercial real estate projects to institutional, manufacturing, and processing facilities. For more information visit the Company's website at www.keithco.com. Certain statements in this news release may include forward-looking statements that express our expectation, prediction, belief, or projection. These statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, and achievement of The Keith Companies to be materially and adversely different from any future results, performance, or achievement expressed or implied by these forward-looking statements. Factors that may cause actual results to differ from the forward-looking statements contained in this release and that may affect the Company's prospects in general include, but are not limited to: changes in the economic growth in the United States (especially in California) and other major international economies (especially Brazil), our ability to sustain our growth and profitability, our ability to implement our acquisition strategy and to successfully close and integrate acquired companies on a timely and cost-effective basis, changes in the carrying value of our goodwill and other long-term assets, our failure to accurately estimate costs on fixed-price contracts or contracts with not-to-exceed provisions, the uncertain timing of awards and contracts, the ability to maintain acquired companies' profit margins and/or client base, outcomes of pending and future litigation, the ongoing financing of public works and infrastructure enhancements and refurbishment, our ability to attract and retain employees, the demand for electricity and the impact on power providers' plans for expanding generation facilities, increasing competition by foreign and domestic companies, a downturn in the real estate market, risks inherent in doing business outside the United States, including the difficulty of enforcing contracts, political instability and foreign currency fluctuations and potential exchange restrictions, the short- and long-term impact of terrorist activities and resulting political and military policies, and other factors as are described in the Company's filings with the Securities and Exchange Commission. The forward-looking information set forth in this press release is as of the date indicated above and we undertake no duty to update this information. TABLES FOLLOW
The Keith Companies, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF INCOME THREE MONTHS ENDED YEARS ENDED DECEMBER 31, DECEMBER 31, ------------------------------- ------------------------------- 2002 2001 2002 2001 -------------- ------------- -------------- ------------- (UNAUDITED) Gross revenue $ 24,657,000 $ 19,778,000 $ 106,487,000 $ 74,314,000 Subcontractor costs 2,323,000 2,727,000 14,889,000 7,470,000 -------------- ------------- -------------- ------------- Net revenue 22,334,000 17,051,000 91,598,000 66,844,000 Costs of revenue 14,597,000 11,347,000 59,716,000 42,970,000 -------------- ------------- -------------- ------------- Gross profit 7,737,000 5,704,000 31,882,000 23,874,000 Selling, general and administrative expenses 4,859,000 3,850,000 19,105,000 14,015,000 -------------- ------------- -------------- ------------- Income from operations 2,878,000 1,854,000 12,777,000 9,859,000 Interest income 80,000 174,000 384,000 552,000 Interest expense (income), net 1,000 31,000 (47,000) 263,000 Other (income) expenses, net 11,000 8,000 (625,000) 54,000 -------------- ------------- -------------- ------------- Income before provision for income taxes and discontinued operations 2,946,000 1,989,000 13,833,000 10,094,000 Provision for income taxes 1,149,000 678,000 5,397,000 3,916,000 -------------- ------------- -------------- ------------- Income from continuing operations 1,797,000 1,311,000 8,436,000 6,178,000 Loss from discontinued operations, net of income taxes 97,000 111,000 628,000 329,000 -------------- ------------- -------------- ------------- Net income $ 1,700,000 $ 1,200,000 $ 7,808,000 $ 5,849,000 ============== ============= ============== ============= Earnings per share from continuing operations: Basic $ 0.24 $ 0.18 $ 1.15 $ 0.94 ============== ============= ============== ============= Diluted $ 0.23 $ 0.17 $ 1.07 $ 0.87 ============== ============= ============== ============= Earnings (loss) per share from discontinued operations, net of income taxes: Basic $ (0.01) $ (0.02) $ (0.09) $ (0.05) ============== ============= ============== ============= Diluted $ (0.01) $ (0.01) $ (0.08) $ (0.05) ============== ============= ============== ============= Earnings per share: Basic $ 0.23 $ 0.16 $ 1.06 $ 0.89 ============== ============= ============== ============= Diluted $ 0.22 $ 0.16 $ 0.99 $ 0.82 ============== ============= ============== ============= Weighted average number of shares outstanding: Basic 7,470,448 7,303,836 7,363,073 6,604,367 ============== ============= ============== ============= Diluted 7,858,738 7,683,367 7,868,877 7,092,505 ============== ============= ============== =============
THE KEITH COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, DECEMBER 31, 2002 2001 ------------- ------------- ASSETS Current assets: Cash and cash equivalents $ 20,333,000 $ 12,212,000 Securities held-to-maturity 3,164,000 11,521,000 Contracts and trade receivables, net 18,771,000 18,618,000 Costs and estimated earnings in excess of billings 10,392,000 8,270,000 Prepaid expenses and other current assets 1,367,000 1,458,000 -------------- -------------- Total current assets 54,027,000 52,079,000 Equipment and leasehold improvements, net 4,831,000 4,921,000 Goodwill, net 23,056,000 14,252,000 Other assets 312,000 240,000 -------------- -------------- Total assets $ 82,226,000 $ 71,492,000 ============== ============== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt and capital lease obligations $ 52,000 $ 459,000 Trade accounts payable 1,818,000 2,376,000 Accrued employee compensation 3,722,000 3,091,000 Current portion of deferred tax liabilities 3,065,000 2,028,000 Other accrued liabilities 4,484,000 2,961,000 Billings in excess of costs and estimated earnings 1,273,000 2,383,000 -------------- -------------- Total current liabilities 14,414,000 13,298,000 Long-term debt and capital lease obligations, less current portion 18,000 1,453,000 Issuable common stock 2,215,000 1,512,000 Deferred tax liabilities 1,675,000 1,271,000 Accrued rent 292,000 225,000 -------------- -------------- Total liabilities 18,614,000 17,759,000 -------------- -------------- Shareholders' equity: Preferred stock -- -- Common stock 8,000 7,000 Additional paid-in-capital 44,166,000 42,096,000 Retained earnings 19,438,000 11,630,000 -------------- -------------- Total shareholders' equity 63,612,000 53,733,000 -------------- -------------- Total liabilities and shareholders' equity $ 82,226,000 $ 71,492,000 ============== ==============
The Keith Companies Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, -------------------------------- 2002 2001 -------------- -------------- Cash flows from operating activities: Net income $ 7,808,000 $ 5,849,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,283,000 2,349,000 Loss on sale/ impairment of equipment 93,000 23,000 Reduction in purchase price of acquired companies (769,000) - Tax benefit from exercise of stock options 90,000 879,000 Changes in operating assets and liabilities, net of effects from acquisitions: Contracts and trade receivables, net 3,368,000 659,000 Costs and estimated earnings in excess of billings (1,545,000) (1,807,000) Prepaid expenses and other assets 108,000 (366,000) Trade accounts payable and accrued liabilities (270,000) 277,000 Billings in excess of costs and estimated earnings (1,042,000) (341,000) Deferred tax liabilities (28,000) 306,000 -------------- -------------- Net cash provided by operating activities $ 10,096,000 $ 7,828,000 -------------- -------------- Cash flows from investing activities: Net cash expended for acquisitions (8,048,000) (5,834,000) Additions to equipment and leasehold improvements (1,872,000) (1,575,000) Proceeds from (purchase of) securities held-to-maturity 8,357,000 (11,521,000) Proceeds from sales of equipment 134,000 15,000 -------------- -------------- Net cash used in investing activities $ (1,429,000) $ (18,915,000) -------------- -------------- Cash flow from financing activities: Payments on line of credit, net - (2,294,000) Principal payments on long-term debt and capital lease obligations, including current portion (705,000) (3,528,000) Repurchase of common stock - (433,000) Proceeds from exercise of stock options 159,000 596,000 Net proceeds from stock offering - 27,915,000 -------------- -------------- Net cash (used in) provided by financing activities $ (546,000) $ 22,256,000 -------------- -------------- Net increase in cash and cash equivalents 8,121,000 11,169,000 Cash and cash equivalents, beginning of year $ 12,212,000 $ 1,043,000 -------------- -------------- Cash and cash equivalents, end of year $ 20,333,000 $ 12,212,000 ============== ============== # # # #
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