-----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, N7ffYNwlvtvJBc763a6Zqe8GL/tJkVklOIY7odzJ2PwNvbFSEkJIj6vUXxhzf070 kF4yf9LuG+0lu2ATrFflmQ== 0000753048-97-000004.txt : 19970222 0000753048-97-000004.hdr.sgml : 19970222 ACCESSION NUMBER: 0000753048-97-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970213 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANALYTICAL SURVEYS INC CENTRAL INDEX KEY: 0000753048 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 840846389 STATE OF INCORPORATION: CO FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-13111 FILM NUMBER: 97529860 BUSINESS ADDRESS: STREET 1: 1935 JAMBOREE DR STREET 2: SUITE 100 CITY: COLORADO SPRINGS STATE: CO ZIP: 80920 BUSINESS PHONE: 7195930093 MAIL ADDRESS: STREET 1: 1935 JAMBOREE DRIVE STREET 2: SUITE 100 CITY: COLORADO SPRINGS STATE: CO ZIP: 80920 10-Q 1 QUARTERLY REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB __X__ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended December 31, 1996 or _____ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File Number 0-13111 ANALYTICAL SURVEYS, INC. (Exact name of small business issuer as specified in its charter) Colorado 84-0846389 (State of incorporation) (IRS Employer Identification No.) 1935 Jamboree Drive Colorado Springs, Colorado 80920 (Address of principal executive offices) (Zip Code) (719) 593-0093 (Issuer's telephone number) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past (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 ninety (90) days. Yes __X__ No_____ The number of shares of common stock outstanding as of February 11, 1997 was 4,980,152. Part I Item 1. ANALYTICAL SURVEYS, INC. CONSOLIDATED BALANCE SHEETS (In Thousands) (Unaudited)
December 31, September 30, 1996 1996 ------------ ------------- ASSETS CURRENT ASSETS Cash $ 766 $ 1,022 Accounts receivable, net of allowance for doubtful accounts of $60 7,022 5,781 Revenue in excess of billings 8,760 9,329 Prepaid expenses and other 267 215 Deferred income taxes 93 105 ------ ------ Total current assets 16,908 16,452 ------ ------ PROPERTY AND EQUIPMENT, at cost Equipment 7,651 7,544 Furniture and fixtures 970 957 Leasehold improvements 169 162 ------ ------ 8,790 8,663 Less Accumulated depreciation and amortization (6,318) (6,049) ------ ------ 2,472 2,614 Goodwill, net of accumulated amortization 2,830 2,881 Long Term Deferred income taxes 3 -- Other Assets 38 41 ------ ------ TOTAL ASSETS $ 22,251 $ 21,988 ====== ======
See accompanying notes to financial statements. ANALYTICAL SURVEYS, INC. CONSOLIDATED BALANCE SHEETS (In Thousands) (Unaudited)
December 31, September 30, 1996 1996 ------------ ------------- LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Line-of-credit with bank $ 200 $ 500 Current portion of long-term debt 1,311 1,247 Billings in excess of revenue 1,651 1,091 Accounts payable and accrued liabilities 1,889 2,268 Income taxes payable 272 20 Accrued payroll and benefits 977 1,340 ------ ------ Total current liabilities 6,300 6,466 Deferred income taxes payable -- 4 Long-term debt, less current portion 4,368 4,528 Deferred compensation payable 66 64 ------ ------ Total liabilities 10,734 11,062 ------ ------ STOCKHOLDERS' EQUITY Preferred stock-authorized 2,500,000 shares of no par value; no shares issued or outstanding Common stock-authorized 100,000 shares of no par value; issued and outstanding 4,925 shares at December 31, 1996 and 4,922 shares at September 30, 1996 5,832 5,820 Treasury stock of 35 shares at cost (124) (125) Retained earnings 5,810 5,231 ------ ------ Total stockholders' equity 11,517 10,926 ------ ------ TOTAL LIABILITIES AND EQUITY $ 22,251 $ 21,988 ====== ======
See accompanying notes to financial statements. ANALYTICAL SURVEYS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In Thousands Except Per Share Amounts) (Unaudited)
Three months Ended Three months Ended December 31, December 31, 1996 1995 ------------------ ------------------ SALES OF SERVICES $ 7,609 $ 3,649 ------ ------ COSTS AND EXPENSES Salaries, wages and benefits 3,675 1,447 Subcontractor costs 1,227 935 General and administrative 1,303 574 Depreciation and amortization 338 217 ------ ------ 6,543 3,173 ------ ------ EARNINGS FROM OPERATIONS 1,066 476 ------ ------ OTHER INCOME (EXPENSE) Interest (expense) (133) (28) Gain on Sale of Assets 5 -- ------ ------ (128) (28) ------ ------ EARNINGS BEFORE INCOME TAXES 938 448 INCOME TAX EXPENSE 360 173 ------ ------ NET EARNINGS $ 578 $ 275 ====== ====== EARNINGS PER SHARE $ 0.11 $ 0.06 ==== ====
See accompanying notes to financial statements. ANALYTICAL SURVEYS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands) (Unaudited)
Three months Ended Three months Ended December 31, December 31, 1996 1995 ------------------ ------------------ CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES $ 275 $ (1,288) ------ ------ CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of equipment 147 -- Purchase of property and equipment (287) (125) Net assets acquired in business combinations -- (3,506) ------ ------ Net cash used in investing activities (140) (3,631) ------ ------ CASH FLOWS FROM FINANCING ACTIVITIES Net borrowings (payments) under notes payable (300) 300 Proceeds from issuance of long-term debt 214 3,498 Principal payments of long-term debt (309) (105) Proceeds from issuance of common stock 4 895 ------ ------ Net cash provided (used) by financing activities (391) 4,589 ------ ------ Net increase (decrease) in cash (256) (330) Cash at beginning of period 1,022 665 ------ ------ Cash at end of period $ 766 $ 335 ====== ====== Supplemental cash flow disclosures: Interest paid $ 135 $ 18 ====== ====== Income taxes paid $ 96 $ 4 ====== ======
See accompanying notes to financial statements. Notes to Consolidated Financial Statements (Unaudited) 1. Summary of Significant Accounting Policies The accompanying interim consolidated financial statements have been prepared by management in accordance with the accounting policies described in the Company's annual report for the year ended September 30, 1996. The consolidated financial statements include the accounts of the Company and ASI Landmark, Inc., its wholly owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. The financial statements have not been audited by independent auditors. The financial statements reflect all adjustments which are, in the opinion of management, necessary to present fairly the financial position of Analytical Surveys, Inc., at December 31, 1996 and its results of operations for the three months ended December 31, 1996 and 1995, and its cash flows for the three months ended December 31, 1996 and 1995. All such adjustments are of a normal recurring nature. The computation of earnings per common share is based on the weighted average number of shares outstanding plus common stock equivalents as follows (in thousands): Three months ended December 31, 1996 5,262 Three months ended December 31, 1995 4,656 2. Stock Options The following table summarizes stock option transactions under the Company's four non-qualified stock option plans (in thousands except per share amounts): Shares Average under Option Price option per share Outstanding at September 30, 1996 989 $ 0.67 to 14.33 Issued -- Exercised (2) 1.58 to 2.08 Canceled (4) 1.58 to 11.08 --- Outstanding December 31, 1996 983 0.67 to 14.33 === At December 31, 1996: Options Exercisable 564 === Available for Grant 306 === Part I Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This discussion contains forward looking statements, primarily those statements which are not statements of historical facts. There are important factors that could cause results to differ materially from those anticipated in the forward looking statements including factors which are beyond the control of the Company. These factors include the competitive environment such as entry of new competitors, improved technical capabilities by existing competitors and capacity utilization achieved by all competitors. Market conditions that may also affect future results include competitive environment in the utilities market, local tax collections by municipalities and federal government spending levels. 1997 Compared to 1996 Results of Operations Three Months Ended December 31, 1996 The Company implemented a strategy to enter the utilities facility data conversion market by the acquisition of Intelligraphics International (Intelligraphics) on December 22, 1995. This utilities market is competitive and margins are generally lower than those earned by the Company in its traditional markets. The lower margins are usually mitigated by the larger contract size and term and the expected greater volume of conversion work to be done in this market. A second acquisition in July 1996, Westinghouse Landmark GIS, also contributed to the growth strategy and provided the capability to perform deeds research tax mapping as opposed to the use of outside subcontractors to perform this work. This acquisition also provided additional capacity in the Company's traditional photogrammetry and cadastral markets as well as an enhanced regional presence in the east and southeast regions of the country. The acquisitions, combined with the Company's original Colorado-based business, caused net income from continuing operations (net earnings) to increase 110% over the previous year on a sales increase of 108%. Total costs and expenses were 86% of sales in 1997 compared to 87% in 1996, with a shift between salaries, wages and benefits increasing to 48% from 40% of sales while subcontractor costs decreased to 16% of sales from 31% last year. The combination of salaries plus subcontractor costs remained at 64% of sales. This shift towards a greater salaries component reflects the higher labor input required at the two acquired production facilities and lower use of outside subcontractors in those locations. The acquisitions will also allow the Company to complete a greater proportion of its production work using internal resources as opposed to outside subcontractors. Interest expense increased 370% over the previous year and increased from 0.8% of sales to 1.7% of sales due to the increased debt undertaken to complete the two acquisitions. Earnings per share increased 83% over the same period of the previous year. This increase reflects the 110% increase in net earnings (all from operations) and the 13% increase in the average number of shares outstanding in 1997 over the same period of 1996. Cash flows presented on the Consolidated Statements of Cash Flows for the three months ended December 31, 1995 have been reclassified from the original presentation in 1995 to conform to the presentation in the September 30, 1996 annual report. Cash flows used by operating activities was $241,000 before the reclassification and $1,288,000 after the reclassification. The reclassification treats the purchase of net current assets in the acquisition as a use of cash by operating activities. Cash flows from operating activities increased to cash provided of $275,000 from net cash used by operating activities of $1,288,000, a change of $1,563,000. Most (67% ) of the change in operating cash flows is attributable to the purchase of net current assets in the previous year. The balance of the change is attributable to normal fluctuations in the investment in contract related current accounts, principally accounts receivable, revenues in excess of billings and billings in excess of revenues. Net earnings plus depreciation and amortization increased 86%. Cash flows used in investing activities are comprised of the proceeds from the sale of surplus equipment and expenditures for routine capital equipment additions. Cash flows provided by financing activities are comprised of the borrowing (repayment) of cash under the routine use of the line of credit, financing of capital expenditures and scheduled debt reductions. The Company's backlog of signed contracts increased to approximately $33 million, up 43% from $23 million in 1995. The Company's expansion strategy has enabled it to sign significant contracts with utilities customers as well as municipal customers and commercial companies. Some of these projects are large multiple-year contracts which offer the Company the benefit of increased work but also subject the Company to increased risk due to possible inflation and/or changing customer expectations. The Company continues to seek and perform both larger and smaller projects for future work. Liquidity and Capital Resources Short-term liquidity requirements are met primarily through operating receipts supplemented by a bank line of credit with a $1,850,000 limit. At December 31, 1996, the Company's balance on the line of credit was $200,000. The cost of capital equipment is usually financed through term debt and/or capitalized leases with terms of from three to five years. The Company has up to $222,000 available under its line of credit for equipment acquisitions through the end of February 1997. Management expects to renew the Bank line of credit in February 1997. The Company has not committed to any material capital purchases. Management expects to meet long-term liquidity requirements through cash flows generated by operations supplemented from time to time by short-term borrowings on a bank line of credit. Routine capital expenditures will usually be financed with term debt and/or capital leases. Management believes the line of credit combined with cash flows from operations are adequate to finance ongoing operations. Management also believes the Company will be able to finance any required capital expenditures from a combination of operating cash flows and new term debt or lease arrangements. The Company is dependent, however, upon its ability to successfully deliver acceptable products in order to maintain adequate operating cash flows. Other Risk Factors The Company faces, as do all businesses, a wide range of increasingly complex legal, regulatory and compliance requirements. The Company is not aware of any substantial risk of loss from product liability litigation nor from noncompliance with environmental, labor or other laws and regulations. The Company has been awarded several projects with contract values in the range of $3 million to $10 million, usually on a fixed-price basis. While these projects provide improved availability of work, the projects may extend over two to four years. The extended production period may increase the Company's exposure to the risk of inflation, changes in customer expectations and customer funding capabilities. The Company has not paid any dividends since its inception, and there is no intention to pay dividends in the foreseeable future. Under its present bank loan agreement, the Company must obtain the bank's prior written consent should the Company wish to pay a dividend. The bank has agreed to not unreasonably withhold such consent; however, there is no assurance that the Company would receive the bank's consent to pay a dividend. Part II Other Information Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 27. Financial Data Schedule (b) Reports on Form 8-K No reports on Form 8-K were filed during the three months ended December 31, 1996. 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. Analytical Surveys, Inc. (Registrant) Date February 13, 1997 /s/ Sidney V. Corder ------------------------ Sidney V, Corder, President and Chief Executive Officer Date February 13, 1997 /s/ Scott C. Benger ------------------------ Scott C. Benger, Secretary/Treasurer (principal financial officer and principal accounting officer) Date February 13, 1997 /s/ Brian J. Yates ------------------------ Brian J. Yates, Controller EX-27 2
5 This schedule contains summary financial information extracted from SEC Form 10-QSB and is qualified in its entirety by reference to such financial statements. 0000753048 ANALYTICAL SURVEYS INC 1000 3-MOS SEP-30-1997 DEC-31-1996 766 0 15842 60 0 16908 8790 6318 22251 6300 0 5708 0 0 5810 22251 0 7609 0 6543 (5) 0 133 938 360 578 0 0 0 578 .11 .11
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