-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, Frv5pBrOaYbaguHHjG0GodVhukk9IpU4hVmyiyHdEx4l/64DFTzQuvb375Ozkw2u SDcONjqmK2Z71AAcrWoNUQ== 0000077543-94-000020.txt : 19940817 0000077543-94-000020.hdr.sgml : 19940817 ACCESSION NUMBER: 0000077543-94-000020 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940630 FILED AS OF DATE: 19940812 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PERINI CORP CENTRAL INDEX KEY: 0000077543 STANDARD INDUSTRIAL CLASSIFICATION: 1540 IRS NUMBER: 041717070 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06314 FILM NUMBER: 94543605 BUSINESS ADDRESS: STREET 1: 73 MT WAYTE AVE CITY: FRAMINGHAM STATE: MA ZIP: 01701 BUSINESS PHONE: 5086282000 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1994 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-6314 PERINI CORPORATION (Exact name of registrant as specified in its charter) MASSACHUSETTS 04-1717070 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 73 MT. WAYTE AVENUE, FRAMINGHAM, MASSACHUSETTS 01701-9160 (Address of principal executive offices) (Zip code) (508)-628-2000 (Registrant's telephone number, including area code) NONE (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 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 Number of shares of common stock of registrant outstanding at August 10, 1994: 4,373,475 PERINI CORPORATION & SUBSIDIARIES INDEX Page Number Part I. - Financial Information: Item 1. Financial Statements Consolidated Condensed Balance Sheets - 3 June 30, 1994 and December 31, 1993 Consolidated Condensed Statements of 4 Operations - Three Months and Six Months ended June 30, 1994 and 1993 Consolidated Condensed Statements of Cash 5-6 Flows - Six Months ended June 30, 1994 and 1993 Notes to Consolidated Condensed Financial 7-8 Statements Item 2. Management's Discussion and Analysis of the 9-12 Consolidated Financial Condition and Results of Operations Part II. - Other Information: Item 1. Legal Proceedings 12 Item 2. Changes in Securities 12 Item 3. Defaults Upon Senior Securities 12 Item 4. Submission of Matters to a Vote of Security 12 Holders Item 5. Other Information 12 Item 6. Exhibits and Reports on Form 8-K 12 Signatures 13 PERINI CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED) JUNE 30, 1994 AND DECEMBER 31, 1993 (In Thousands) ASSETS JUNE 30, DEC. 31, 1994 1993 Cash $ 12,001 $ 35,871 Accounts and Notes Receivable 121,174 123,009 Unbilled Work 15,583 14,924 Construction Joint Ventures 63,154 61,156 Deferred Income Taxes 7,702 7,702 Other Current Assets 16,753 14,940 -------- -------- Total Current Assets $236,367 $257,602 -------- -------- Land Held for Sale or Development $ 40,958 $ 48,011 Investments in and Advances to Real Estate Joint Ventures 142,658 138,095 Real Estate Properties Used in Operations 10,141 12,678 Long-Term Portion of Notes Receivable 5,000 - -------- -------- Total Real Estate Development Investments $198,757 $198,784 -------- -------- Other Assets $ 3,771 $ 3,896 -------- -------- Property and Equipment, less Accumulated Depreciation of $29,796 - 1994 and $28,986 - 1993 $ 15,828 $ 16,096 -------- -------- $454,723 $476,378 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Notes Payable - Bank $ 3,000 $ - Current Maturities of Long-Term Debt 4,335 7,617 Accounts Payable 117,039 136,231 Deferred Contract Revenue 33,157 25,867 Accrued Expenses 55,524 47,827 Accrued Income Taxes 321 3,183 -------- -------- Total Current Liabilities $213,376 $220,725 -------- -------- Deferred Income Taxes and Other Liabilities $ 29,839 $ 38,794 -------- -------- Long-Term Debt, including real estate development debt of $7,405 - 1994 and $11,382 - 1993 $ 79,437 $ 82,366 -------- -------- Minority Interest $ 3,302 $ 3,350 -------- -------- Stockholders' Equity: Preferred Stock $ 100 $ 100 Series A Junior Participating Preferred Stock - - Common Stock 4,985 4,985 Paid-In Surplus 59,740 59,875 Retained Earnings 80,675 83,594 ESOT Related Obligations (6,982) (6,982) --------- -------- $138,518 $141,572 Less - Treasury Stock (9,749) (10,429) -------- -------- Total Stockholders' Equity $128,769 $131,143 -------- -------- $454,723 $476,378 ======== ======== The accompanying notes are an integral part of these financial statements. PERINI CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) (In Thousands, Except Per Share Data) THREE MONTHS SIX MONTHS ENDED JUNE 30, ENDED JUNE 30, 1994 1993 1994 1993 REVENUES FROM OPERATIONS: Construction $227,759 $317,177 $381,950 $561,664 Real Estate 15,346 30,827 35,546 44,383 -------- -------- -------- -------- TOTAL REVENUES FROM OPERATIONS $243,105 $348,004 $417,496 $606,047 -------- -------- -------- -------- COST AND EXPENSES: Cost of Operations $235,648 $334,063 $397,263 $581,101 General, Administrative and Selling Expenses 10,399 10,862 20,209 19,889 -------- -------- -------- -------- $246,047 $344,925 417,472 $600,990 -------- -------- -------- -------- INCOME (LOSS) FROM OPERATIONS $ (2,942) $ 3,079 $ 24 $ 5,057 -------- -------- -------- -------- Other Income (Expense), Net (Note 2) (149) (401) (569) 4,654 Interest Expense (1,367) (1,130) (2,614) (2,318) -------- -------- -------- -------- Income (Loss) Before Income Taxes $ (4,458) $ 1,548 $ (3,159) $ 7,393 (Provision) Benefit for Income Taxes (Note 3) 1,809 (583) 1,302 (5,683) -------- -------- -------- -------- NET INCOME (LOSS) $ (2,649) $ 965 $ (1,857) $ 1,710 ======== ======== ======== ======== EARNINGS (LOSS) PER COMMON SHARE (Note 4) $ (.73) $ .10 $ (.67) $ .15 ======== ======== ======== ======== DIVIDENDS PER COMMON SHARE (Note 5) $ - $ - $ - $ - ======== ======== ======== ======== WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (Note 4) 4,360,225 4,269,428 4,347,617 4,218,298 ========= ========= ========= ========= The accompanying notes are an integral part of these financial statements. PERINI CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE SIX MONTHS ENDED JUNE 30, 1994 AND 1993 (In Thousands) SIX MONTHS ENDED JUNE 30, 1994 1993 Cash Flows from Operating Activities: Net Income (Loss) (1,857) $ 1,710 Adjustments to reconcile net income to net cash provided from operating activities: Depreciation and amortization 1,217 1,798 Noncurrent deferred taxes and other liabilities (8,955) 5,750 Distributions greater (less) than earnings of joint ventures 2,967 (10,010) (Gain) on sale of subsidiary (Note 2) - (4,600) Minority interest, net (48) (182) Cash provided from (used by) changes in components of Working capital other than cash, notes payable and current maturities of long-term debt (9,948) (21,715) Real estate development investments other than joint ventures 7,722 2,672 Other non-cash items, net (1,281) (544) -------- -------- NET CASH USED BY OPERATING ACTIVITIES $(10,183) $(25,121) -------- -------- Cash Flows from Investing Activities: Proceeds from sale of property and equipment $ 288 $ 731 Cash distributions of capital from unconsolidated joint ventures 3,633 1,715 Acquisition of property and equipment (1,171) (2,855) Improvements to land held for sale or development (245) (2,582) Improvements to real estate properties used in operations (204) (303) Capital contributions to unconsolidated joint ventures (8,199) (14,328) Advances to real estate joint ventures (4,062) (5,020) Proceeds from sale of Majestic net of subsidiary's cash - 4,377 -------- -------- NET CASH USED BY INVESTING ACTIVITIES $ (9,960) $(18,265) -------- -------- Cash Flows from Financing Activities: Proceeds of long-term debt $ 2,457 $ 7,236 Repayment of long-term debt (8,667) (4,998) Cash dividends paid (1,062) (1,063) Proceeds from notes payable to banks 3,000 - Purchase of treasury stock 545 2,504 -------- -------- NET CASH FROM FINANCING ACTIVITIES $ (3,727) $ 3,679 -------- -------- Net (Decrease) in cash $(23,870) $(39,707) Cash at Beginning of Year 35,871 79,563 -------- -------- Cash at End of Period $ 12,001 $ 39,856 ======== ======== Supplemental Disclosures of Cash paid during the period for: Interest, net of amounts capitalized $ 2,688 $ 2,462 ======== ======== Income tax payments $ 4,641 $ 482 ======== ======== The accompanying notes are an integral part of these financial statements. PERINI CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (1) Significant Accounting Policies The significant accounting policies followed by the Company and its subsidiaries in preparing its consolidated financial statements are set forth in Note (1) to such financial statements included in Form 10-K/A for the year ended December 31, 1993. The Company has made no significant change in these policies during 1994. (2) Other Income (Expense) Net Includes a pretax gain of $4.6 million for the first six months 1993 from the sale of Majestic Contractors Limited, the Company's 74%-owned Canadian pipeline subsidiary. This gain nets to zero after providing an equivalent amount for federal income taxes at the 34% statutory rate and an additional 66% rate which represents a combination of an additional tax provision for the difference between book and tax basis of the Company's investment in this subsidiary and a valuation reserve based upon the Company's current estimate of its utilization of the foreign tax credits related to the sale. (3) Income Taxes The higher-than-normal tax rate for the first six months of 1993 is due to the reasons stated in (2) above. (4) Per Share Data Computations of earnings per common share amounts are based on the weighted average number of the Company's common shares outstanding during the periods presented. Earnings per common share reflect the effect of preferred dividends accrued during both the 1994 and 1993 three and six month periods ended June 30, $531,000 and $1,062,000, respectively. Common stock equivalents related to additional shares of common stock issuable upon exercise of stock options have not been included since their effect would be antidilutive. Per share data on a fully diluted basis is not presented because the effect of conversion of the Company's depositary convertible exchangeable preferred shares into common stock is antidilutive. (5) Cash Dividends There were no cash dividends on common stock declared or paid during the periods presented in the condensed financial statements presented herein. (6) Opinion The unaudited condensed financial statements presented herein have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles. These statements should be read in conjunction with the financial statements and notes thereto included in the Company's Form 10-K/A for the year ended December 31, 1993. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the Company's financial position as of June 30, 1994 and December 31, 1993 and results of operations and cash flows for the three and six month periods ended June 30, 1994 and 1993. The results of operations for the three and six month period ended June 30, 1994 may not be indicative of the results that may be expected for the year ending December 31, 1994 because the Company's results generally consist of a limited number of large transactions in both construction and real estate. Therefore, such results can vary depending on the timing of transactions and the profitability of projects being reported. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS RESULTS OF OPERATIONS Comparison of the Second Quarter of 1994 with the Second Quarter of 1993 Revenues decreased $104.9 million (or 30.1%), from $348.0 million in 1993 to $243.1 million in 1994. This decrease resulted from decreased construction revenues of $89.4 million (or 28%), from $317.2 million in 1993 to $227.8 million in 1994, due primarily to a decrease in revenues from building operations of $95 million (or 40%), from $239 million in 1993 to $144 million in 1994. This decrease in revenues was due to the timing in the start-up of certain hotel/casino projects obtained late in 1993 compared to a few similar projects that were well underway during the second quarter of 1993. This decrease was partially offset by an increase in revenues from the heavy construction operations of $5 million (or 6%), from $79 million in 1993 to $84 million in 1994, due to an increased heavy construction backlog going into 1994. In addition to the overall decrease in construction revenues, revenues from real estate operations decreased $15.5 million (or 50%), from $30.8 million in 1993 to $15.3 million in 1994 due primarily to the non- recurring sale in 1993 of a partnership interest in certain commercial rental properties in San Francisco ($23.2 million). This revenue decrease was partially offset from the sale of a marginally profitable land sale in 1994 ($6 million). The gross profit in 1994 decreased by $6.5 million, from $13.9 million in 1993 to $7.4 million in 1994, due primarily to a $4.6 million decrease from real estate operations, from a profit of $3.4 million in 1993 to a loss of $1.2 million in 1994. This profit decrease primarily results from the non-recurring gain in 1993 from the sale of certain commercial rental properties referred to above. The gross profit from construction operations decreased $1.9 million (or 18%), from $10.5 million in 1993 to $8.6 million in 1994. This decrease was primarily caused by the decrease in building construction revenues referred to above and a loss from international operations resulting from unstable economic and political conditions in a certain overseas location where the Company is working. These decreases were partially offset by the increase in the relatively higher margin heavy construction revenues referred to above and the non-recurring unfavorable settlement in 1993 of a contract dispute related to a project completed several years ago. Comparison of the Six Months Ended June 30, 1994 with the Six Months Ended June 30, 1993 Revenues decreased $188.6 million (or 31.1%), from $606.1 million in 1993 to $417.5 million in 1994. This decrease resulted from decreased construction revenues of $179.7 million (or 32%), from $561.7 million in 1993 to $382.0 million in 1994, due primarily to a decrease in revenues from building operations of $200 million (or 46%), from $438 million in 1993 to $238 million in 1994. This decrease in revenues was primarily due to the timing in the start-up of certain hotel/casino projects obtained late in 1993 compared to a few similar projects that were well underway during the first six months of 1993. This decrease was partially offset by an increase in revenues from the heavy construction operations of $20 million (or 16%), from $123 million in 1993 to $143 million in 1994, due to an increased heavy construction backlog going into 1994. In addition to the overall decrease in construction revenues, revenues from real estate operations decreased $8.9 million (or 20%), from $44.4 million in 1993 to $35.5 million in 1994 due primarily to the non-recurring sale in 1993 of a partnership interest in certain commercial rental properties in San Francisco ($23.2 million). This revenue decrease was partially offset from the sale of a marginally profitable land sale in 1994 ($6 million) and the sale of two investment properties in 1994 ($8.9 million). The gross profit in 1994 decreased by $4.7 million, from $24.9 million in 1993 to $20.2 million in 1994, due primarily to a $5.3 million decrease from real estate operations, from a profit of $4.6 million in 1993 to a loss of $.7 million in 1994. This profit decrease primarily results from the non- recurring gain in 1993 from the sale of certain commercial rental properties referred to above and a decrease in high margin land sales in Florida. The gross profit from construction operations increased $.6 million (or 3%), from $20.3 million in 1993 to $20.9 million in 1994 in spite of the negative profit impact from the reduction in building construction revenues referred to above. Increased profits from the relatively higher margin heavy construction revenues referred to above and the non-recurring unfavorable settlement in 1993 of a contract dispute related to a project completed several years ago more than offset the impact of reduced building construction revenues and the loss from international operations resulting from unstable economic and political conditions in a certain overseas location where the Company is working. The $5.2 million decrease in other income (expense), from income of $4.7 million in 1993 to a loss of $.5 million in 1994 was due primarily to the non-recurring gain ($4.6 million) on the sale by the Company of its 74%-owned interest in Majestic Contractors Limited ("Majestic"), its Canadian pipeline subsidiary, in January, 1993. The $.3 million increase in interest expense (or 13%), from $2.3 million in 1993 to $2.6 million in 1994 is due to a combination of higher prevailing interest rates and an increase in the average amount borrowed. The higher-than-normal tax rate in 1993 was due to tax provided at an additional 66% rate on the gain on the sale of Majestic, which represented a combination of an additional tax provision for the difference between book and tax basis of the Company's investment in this subsidiary and a valuation reserve related to the gain based upon the Company's estimate of its utilization of the related foreign tax credits. _______________________ The Company's backlog of uncompleted construction work at the end of June 1994 was $1.385 billion, a 50% increase from the $924 million reported for the same period in 1993 and an all time company record. Backlog increases were experienced in all of the Company's principal construction businesses. In addition, the Company presently has a large number of contracts in the final stages of negotiation. While there can be no assurances that all the negotiations will result in signed contracts, they could, if completed, have an even greater impact on backlog. As previously reported, the Company had under contract, in early 1994, for scheduled closings two major land sales, one in Florida and the other in Massachusetts. If both transactions meet their scheduled closing dates, they will produce over $6 million in revenue and have an important profit impact on the Company in 1994. The land sale in Florida closed in early July, 1994. However, until the sale of the remaining project actually occurs, this revenue and profit cannot be assured since it is not unusual for such closings to be delayed or cancelled. FINANCIAL CONDITION Working capital decreased $13.9 million, from $36.9 million at the end of 1993 to $23.0 million at June 30, 1994. The current ratio decreased from 1.17:1 to 1.11:1. During the first six months of 1994 the Company used $10.2 million of cash from operations, primarily to fund a decrease in payables; $10.0 million of cash for investing activities, primarily in certain real estate joint ventures; and $3.7 million of cash for financial activities, primarily to pay down debt. The source of cash was a $23.9 million reduction in cash on hand. Long-term debt at June 30, 1994 was $79.4 million, a decrease of $3.0 million from December 31, 1993. This decrease resulted primarily from the repayment of certain mortgages related to real estate properties sold during the period. The long-term debt to equity ratio at June 30, 1994 was .62 to 1, compared to the .63 to 1 ratio at December 31, 1993. In addition to internally generated funds, the Company has access to additional funds under its $18 million of short-term lines of credit, its $70 million long-term Credit Agreement and, effective March 31, 1994, a $15 million collateralized short-term credit facility available for the balance of 1994. At June 30, 1994, there was $15 million available under the short- term lines of credit and $15 million available under the new short-term credit faclity. The full amount available under the credit facilities may be borrowed during any fiscal quarter. However, financial covenants limiting the debt to equity ratio contained in the agreements governing these facilities limit the amount of borrowings which may be outstanding at the end of any fiscal quarter. Based on these covenants, $2.6 million of additional borrowing capacity was available at June 30, 1994. Management believes that cash generated from operations, unused credit lines and various real estate borrowings should probably be adequate for the next twelve months to meet the Company's funding requirements. However, the withdrawal of many commercial lending sources from both the real estate and construction markets and/or restrictions on new borrowings and extensions on maturing loans by these same sources cause uncertainties in predicting liquidity. On August 5, 1994, the Company announced that it had for the present postponed a pending placement of $25-30 million of a new series of convertible preferred stock. The Company said it would be interested in reactivating the financing later in the year or in early 1995 if market conditions become more favorable. Part II. - Other Information Item 1. - Legal Proceedings - None Item 2. - Changes in Securities (a) None (b) None Item 3. - Defaults Upon Senior Securities - None Item 4. - Submission of Matters to a Vote of Security Holders (a) May 19, 1994 - Annual Meeting of Shareholders (b) Not applicable (c) To consider and take action on certain changes to the restated Articles of Organization of The Company, as heretofore amended, to increase the number of authorized shares of Common Stock, $1.00 Par Value, from 7,500,000 to 15,000,000 shares. Number of Shares For 3,207,986 Against 286,717 Withheld 343,964 Abstentions and Broker Non-Votes 492,140 Item 5. - Other Information - None Item 6. - Exhibits and Reports on Form 8-K (a) None (b) None 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. PERINI CORPORATION Registrant Date: August 12, 1994 /s/ John H. Schwarz ---------------------------------- John H. Schwarz, Executive Vice President, Finance and Administration Date: August 12, 1994 /s/ Barry R. Blake ---------------------------------- Barry R. Blake, Vice President and Controller -----END PRIVACY-ENHANCED MESSAGE-----