-----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, tNRPOMoKlULmKhaJhEE/d67zzFg7amhpEII7WSWOmx62+/sb7V5xBMKrsnWIy1NJ ypfon0RI3n9+I/fFneS1/g== 0000912057-95-003543.txt : 19950517 0000912057-95-003543.hdr.sgml : 19950516 ACCESSION NUMBER: 0000912057-95-003543 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950511 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: GTS DURATEK INC CENTRAL INDEX KEY: 0000785186 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HELP SUPPLY SERVICES [7363] IRS NUMBER: 222476180 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14292 FILM NUMBER: 95537052 BUSINESS ADDRESS: STREET 1: 8955 GUILFORD RD SUITE 200 CITY: COLUMBIA STATE: MD ZIP: 21046 BUSINESS PHONE: 4103125100 MAIL ADDRESS: STREET 2: 8955 GUILFORD RD SUITE 200 CITY: COLUMBIA STATE: MD ZIP: 21046 FORMER COMPANY: FORMER CONFORMED NAME: DURATEK CORP DATE OF NAME CHANGE: 19920703 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ________________ FORM 10-Q ___ /X / Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange -- Act of 1934 For the Quarter Ended March 31, 1995 OR /__/ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _____________ to _____________ Commission File Number 0-14292 GTS DURATEK, INC. (Exact name of Registrant as specified in its charter) Delaware 22-2427618 - -------- ---------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 8955 Guilford Road, Suite 200, Columbia, Maryland 21046 - ------------------------------------------------- ------------ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (410) 312-5100 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 outstanding of each of the issuer's classes of common stock as of May 8, 1995: Common Stock, par value $0.01 per share 8,718,417 shares GTS DURATEK, INC. AND SUBSIDIARIES TABLE OF CONTENTS ----------------- PAGE ---- Part I FINANCIAL INFORMATION - ------ Item 1. Financial Statements Consolidated Condensed Balance Sheets March 31, 1995 and December 31, 1994 . . . . . . . . . . 1 Consolidated Condensed Statements of Operations Three Months Ended March 31, 1995 and 1994 . . . . . . . 2 Consolidated Condensed Statement of Changes in Stockholders' Equity Three Months Ended March 31, 1995 . 3 Consolidated Condensed Statements of Cash Flows Three Months Ended March 31, 1995 and 1994 . . . . . . . 4 Notes to Consolidated Financial Statements . . . . . . . . . . 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . . . . . 6 Qualification Relating to Financial Information. . . . . . . . 8 Part II OTHER INFORMATION - ------- Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . 9 Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Part I Financial Information - ------ Item 1. Financial Statements
GTS DURATEK, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS March 31, December 31, 1995 1994 ---------- ---------- ASSETS (unaudited) * Current assets: Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,443,423 $ Receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,190,414 8,090,614 Costs and estimated earnings in excess of billings on uncompleted contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,731,926 3,119,443 Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 342,777 334,998 Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . 269,922 141,510 ----------- ----------- Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,978,462 11,686,565 ----------- ----------- Costs and estimated earnings in excess of billings, noncurrent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,307,728 Property, plant and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,125,108 2,137,247 Intangibles, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 609,716 637,553 Investments in and advances to joint venture, net . . . . . . . . . . . . . . . . . . . . . 2,788,376 2,417,771 Deferred charges and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 993,797 1,013,220 ----------- ----------- $ 24,495,459 $ 19,200,084 ----------- ----------- ----------- ----------- LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ $ 7,630,512 Current maturities of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . 707,094 707,094 Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 1,765,834 3,427,236 ----------- ----------- Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,472,928 11,764,842 ----------- ----------- Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 327,074 502,417 ----------- ----------- Redeemable preferred stock (Liquidation value $16,235,200) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,461,149 ----------- ----------- Stockholders' equity: Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87,598 87,598 Capital in excess of par value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,936,009 16,656,009 Deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,617,522) (9,639,005) Treasury stock, at cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (171,777) (171,777) ----------- ----------- Total stockholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,234,308 6,932,825 ----------- ----------- $ 24,495,459 $ 19,200,084 ----------- ----------- ----------- ----------- * The Consolidated Condensed Balance Sheet as of December 31, 1994 has been derived from the Company's audited Balance Sheet as of that date.
1
GTS DURATEK, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) THREE MONTHS ENDED MARCH 31, ----------------------------- 1995 1994 ----------- ------------ Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,535,752 $ 7,982,094 Cost of revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,779,011 6,159,300 ---------- ---------- Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,756,741 1,822,794 ---------- ---------- Expenses: Selling, general and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,302,539 1,541,360 Royalties paid to related parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000 25,000 ---------- ---------- 1,327,539 1,566,360 ---------- ---------- Income from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 429,202 256,434 Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,715 101,216 ---------- ---------- Income before income taxes and proportionate share of loss of joint venture . . . . . . . . . . . . . . . . . . . . . . 412,487 155,218 Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,249 1,395 ---------- ---------- Income before proportionate share of loss of joint venture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 371,238 153,823 Proportionate share of loss of joint venture . . . . . . . . . . . . . . . . . . . . . . . (78,932) (71,771) ---------- ---------- Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 292,306 $ 82,052 ---------- ---------- ---------- ---------- Net income per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ .00 $ .01 ---------- ---------- ---------- ---------- Weighted average number of shares outstanding . . . . . . . . . . . . . . . . . . . . . . . 9,308,747 9,102,857 ---------- ---------- ---------- ----------
2
GTS DURATEK, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY THREE MONTHS ENDED MARCH 31, 1995 (UNAUDITED) Common Stock Capital in Total ------------ Excess of Treasury Stockholders' Shares Amount Par Value Deficit Stock Equity ------ ------ ---------- ------- -------- ------------- Balance, December 31, 1994 8,759,755 $ 87,598 $16,656,009 $ (9,639,005) $(171,777) $ 6,932,825 Net Income 292,306 292,306 Preferred dividends (235,200) (235,200) Issuance of stock options 280,000 280,000 Accretion of redeemable preferred stock (35,623) (35,623) ------------- ---------- ----------- ------------ ---------- ------------- Balance, March 31, 1995 8,759,775 $ 87,598 $16,936,009 $ (9,617,522) $(171,777) $ 7,234,308 ------------- ---------- ----------- ------------ ---------- ------------- ------------- ---------- ----------- ------------ ---------- -------------
3
GTS DURATEK, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) THREE MONTHS ENDED MARCH 31, ---------------------------- 1995 1994 ---------- ---------- Cash flows from operations: Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 292,306 $ 82,052 Adjustments to reconcile net income to net cash provided (used) by operating activities: Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153,751 153,762 Proportionate share of loss of joint venture . . . . . . . . . . . . . . . . . . . . . . 78,932 71,771 Changes in operating items: Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (99,800) (1,153,017) Cost in excess of billings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,695,245 (723,808) Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,779) (30,706) Accounts payables and accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . (1,896,602) (399,146) Other operating items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (128,412) (206,043) ----------- ----------- Net cash provided (used) by operations . . . . . . . . . . . . . . . . . . . . . . . 87,641 (2,205,135) ----------- ----------- Cash flows from investing activities: Additions to property, plant and equipment, net . . . . . . . . . . . . . . . . . . . . . (90,973) (177,928) Advances to joint venture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (449,537) (143,542) Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,379) 1,457 ----------- ----------- Net cash used by investing activities . . . . . . . . . . . . . . . . . . . . . . . . (543,889) (320,013) ----------- ----------- Cash flows from financing activities: Net proceeds from (repayment of) short-term borrowings . . . . . . . . . . . . . . . . . (7,630,512) 2,566,068 Reduction of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (175,343) (51,419) Proceeds from issuance of common stock . . . . . . . . . . . . . . . . . . . . . . . . . 10,499 Proceeds from issuance of redeemable preferred stock . . . . . . . . . . . . . . . . . . 14,425,526 Proceeds from issuance of stock option . . . . . . . . . . . . . . . . . . . . . . . . . 280,000 ----------- ----------- Net cash provided by financing activities . . . . . . . . . . . . . . . . . . . . . . . 6,899,671 2,525,148 ----------- ----------- Net change in cash Cash at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ----------- ----------- Cash at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,443,423 $ ----------- ----------- Cash paid for: Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 98,923 $ 101,216 ----------- ----------- ----------- ----------- Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ $ 1,395 ----------- ----------- ----------- -----------
4 GTS DURATEK, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. ORGANIZATION, DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION On January 24, 1995, the Company consummated a financing transaction (the "Financing Transaction") whereby it issued for $16 million 160,000 shares of 8% Cumulative Convertible Redeemable Preferred Stock, par value $.01 per share (the "Convertible Preferred Stock") and an option (the "Company Option") to purchase up to an additional 1.25 million shares of the Company's newly issued common stock, par value at $.01 per share (the "Common Stock") at any time prior to January 24, 1999 for $3.75 per share to investment partnerships sponsored and controlled by the Carlyle Group, a Washington, D.C. based private merchant bank ("Carlyle"). The Convertible Preferred Stock is initially convertible into the Company's Common Stock at a conversion price of $3 per share and, if not previously converted, the Company is required to redeem the outstanding Convertible Preferred Stock on December 31, 2001 for $100 per share plus accrued and unpaid dividends. The Company is required to pay quarterly dividends on the Convertible Preferred Stock of $320,000. In addition, as part of the Financing Transaction, Carlyle acquired 1,666,667 shares of Common Stock of the Company owned by National Patent for $3 per share and has the option (the "NPD Option") to purchase up to an additional 500,000 shares of the Company's Common Stock from National Patent at any time prior to January 24, 1996 at an exercise price of $3.75 per share. The Company intends to use proceeds from the Financing Transaction to (i) finance the Company's obligations under the DuraChem joint venture with Chem-Nuclear Systems, Inc., estimated at $5 million, (ii) provide $5 million of working capital required in connection with the contract with Westinghouse Savannah River Company to construct a DuraMelter-TM- vitrification melter to remediate and stabilize low-level radioactive waste at the Department of Energy's Savannah River Site in South Carolina, and (iii) provide working capital for the Company's Technology Group. Assuming the conversion of all of the Convertible Preferred Stock into Common Stock, Carlyle would own 49.9% of the Common Stock of the Company, excluding the effects of the exercise of the Company and the NPD Options and all other outstanding warrants and employee stock options. Assuming the conversion of all of the Convertible Preferred Stock into Common Stock and assuming Carlyle's exercise in full of the Company and NPD Options (but not the exercise of outstanding warrants and employee stock options), Carlyle would own 57.3% of the Company s Common Stock. 2. INVENTORIES Inventories, consisting of material, labor and overhead, are classified as follows:
March 31, December 31, 1995 1994 ---------- ------------ Raw materials . . . . . . . . . . . . . . $ 55,452 $ 55,452 Finished goods . . . . . . . . . . . . . 287,325 279,546 ------- ------- $342,777 $334,998 ------- ------- ------- -------
5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations GTS DURATEK, INC. AND SUBSIDIARIES RESULTS OF OPERATIONS OVERVIEW The Company had net income of $292,000 for the quarter ended March 31, 1995 as compared to $82,000 for the three months ended March 31, 1994. The increase in net income was due to increased revenues in the Services Group combined with lower selling, general and administrative expenses and a reduction in net interest expense. The Company's results of operations are significantly affected by the timing of the award of contracts and the timing and performance on contracts. These factors directly affect the Company's pre-tax income and net income. The quarter-to-quarter results continue to be affected by the Company's electric utility customers scheduling of nuclear power plant outages causing the demand for these services to often shift between quarters. Accordingly, results of operations for the quarter and quarter-to-quarter comparisons may not be as meaningful as comparisons over longer periods. REVENUES Revenues were $9,536,000 during the first quarter of 1995 as compared to $7,982,000 for the first quarter of 1994. The increase in consolidated revenues of $1,554,000 or 19.5% is attributable to an increase in the Services Group revenues of $1,973,000 and a decrease in the Technology Group revenues of $419,000. The increase in Services Group revenues was primarily due to work performed on power plant outage contracts with Duke Power Company and Vermont Yankee Nuclear Power Corporation. The decrease in Technology Group revenues was primarily due to the completion of contracts the Department of Energy (DOE) funded MINIMUM ADDITIVE WASTE STABILIZATION (MAWS) demonstration project in which the Company successfully vitrified 7,000 gallons of low-level radioactive waste using its DuraMelter-TM- 300 located on the DOE's Fernald site. GROSS PROFIT Gross profit was $1,757,000 or 18% during the first quarter of 1995 as compared to $1,823,000 or 23% for the same period in 1994. The decrease in gross profit was due to changes in the mix of revenues with a higher proportion of the total from the Services Group which generates a lower gross profit than the Technology Group. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Selling, general and administrative expenses were $1,328,000 for the first quarter of 1995 as compared to $1,566,000 for the first quarter of 1994. The decrease of 238,000 was due to cost saving measures taken in the second half of 1994 in the Services Group from personnel reductions, consolidation of offices and continued efforts to control costs. 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) GTS DURATEK, INC. AND SUBSIDIARIES INTEREST EXPENSE The decrease in interest expense, net for the first quarter of 1995 as compared to the same period in 1994 reflects the repayment of short-term borrowings and investment income with the proceeds of the Financing Transaction (see Note 1). OTHER INCOME AND EXPENSE The Company's proportionate share of loss of the joint venture of $79,000 relates to the start-up expenses and operation of a 50% joint venture formed to pursue vitrification of non-radioactive waste materials. LIQUIDITY AND CAPITAL RESOURCES The Company has historically financed its operations with short-term borrowings and has a revolving line of credit with a commercial bank. As a result of the Financing Transaction, the Company has available borrowings of $7,000,000 as of March 31, 1995 under the line of credit arrangement. The Company believes that cash flow from operations, proceeds from the Financing Transaction and borrowings availability under the line of credit will be sufficient to meet its operating needs and preferred dividend requirements. 7 Item 2. Qualification Relating to Financial Information GTS DURATEK, INC. AND SUBSIDIARIES The consolidated financial information included herein is unaudited, and does not include all disclosures required under generally accepted accounting principles because certain note information included in the Company's Annual Report, filed on Form 10-K, has been omitted; however, such information reflects all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. The results of the 1995 interim period are not necessarily indicative of results to be expected for the entire year. 8 PART II OTHER INFORMATION - ------- GTS DURATEK, INC. AND SUBSIDIARIES Item 6. Exhibits and Reports on Form 8-K a. Exhibits -------- GTS Duratek, Inc., and Subsidiaries, Computation of Earnings Per Share for the three months ended March 31, 1995 and 1994. b. Reports ------- A report on Form 8-K was filed on February 1, 1995, which disclosed the Financing Transaction with The Carlyle Group. 9 GTS DURATEK, INC. AND SUBSIDIARIES MARCH 31, 1995 SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. GTS DURATEK, INC. Dated: May 9, 1995 BY: /s/ Robert F. Shawver ---------------------------- Robert F. Shawver Executive Vice President and Chief Financial Officer Dated: May 9, 1995 BY: /s/ Craig T. Bartlett ----------------------------- Craig T. Bartlett Controller and Principal Accounting Officer 10 EX-11.1 2 EXHIBIT 11 Exhibit 11.1 GTS DURATEK, INC. AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE THREE MONTHS ENDED MARCH 31, 1995 AND 1994
1995 1994 ---- ---- Primary: Net earnings $ 292,306 $ 82,052 Accrued dividend on preferred stock (235,200) 0 Accretion of redeemable preferred stock (35,623) 0 --------- --------- Net earnings applicable to common stock $ 21,483 $ 82,052 --------- --------- --------- --------- Average common shares outstanding 8,689,317 8,560,250 Dilutive effect of stock options and warrants 619,430 542,607 --------- --------- Weighted average common shares outstanding 9,308,747 9,102,857 Earnings per common share $ 0.00 $ 0.01 --------- --------- --------- --------- Fully Diluted: Net earnings applicable to common stock $ 21,483 $ 82,052 --------- --------- --------- --------- Average common shares outstanding 8,689,317 8,560,250 Dilutive effect of stock options and warrants 817,592 542,607 --------- --------- Weighted average common shares outstanding 9,506,909 9,102,857 Earnings per common share assuming full dilution $ 0.00 $ 0.01 --------- --------- --------- ---------
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