-----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, XXWrC3LXj4464Jd82y31H3PB1sBfU6FpGTBxWiyzu96STNmKkfO7p5ZR8pIhH5wV TCGyA7/urxtirMylW5GHIg== 0000950152-95-001046.txt : 19950516 0000950152-95-001046.hdr.sgml : 19950516 ACCESSION NUMBER: 0000950152-95-001046 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950515 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHEMPOWER INC CENTRAL INDEX KEY: 0000847595 STANDARD INDUSTRIAL CLASSIFICATION: SANITARY SERVICES [4950] IRS NUMBER: 341481970 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-17575 FILM NUMBER: 95539521 BUSINESS ADDRESS: STREET 1: 807 E TURKEYFOOT LAKE RD CITY: AKRON STATE: OH ZIP: 44319 BUSINESS PHONE: 2168964202 MAIL ADDRESS: STREET 1: 807 EAST TURKEYFOOT LAKE ROAD CITY: AKRON STATE: OH ZIP: 44319 10-Q 1 CHEMPOWER, INC. FORM 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1995 / / 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 0-17575 CHEMPOWER, INC. ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) OHIO 34-1481970 - ------------------------------- ----------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 807 EAST TURKEYFOOT LAKE ROAD, AKRON, OHIO 44319 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (216) 896-4202 NOT APPLICABLE - -------------------------------------------------------------------------------- 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 ------- ------ Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:
Class Outstanding May 1, 1995 - -------------------------------------- -------------------------------------- Common Stock, $.10 Par Value 7,221,563 shares
2 CHEMPOWER, INC. INDEX
PART I. FINANCIAL INFORMATION Page Number - ----------------------------- ----------- Item 1. Financial Statements Condensed balance sheets--March 31. 1995 and December 31, 1994...................... 3 Condensed statements of income--Three months ended March 31, 1995 and 1994....... 4 Condensed statements of cash flows--Three months ended March 31, 1995 and 1994....... 5 Notes to condensed financial statements-- March 31, 1995............................. 6-7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations................................. 8-9 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K........... 10 SIGNATURES............................................ 11
3 PART I. FINANCIAL INFORMATION - ------------------------------ CHEMPOWER, INC. CONDENSED BALANCE SHEETS
March 31 December 31 1995 1994 ------------ ------------ (Unaudited) ASSETS (Dollars in thousands) CURRENT ASSETS Cash and cash equivalents.................. $ 14,078 $ 11,864 Trade receivables.......................... 14,272 18,895 Contracts in progress...................... 676 925 Inventories................................ 4,148 3,867 Other current assets....................... 365 471 ------------ ------------ TOTAL CURRENT ASSETS................. 33,539 36,022 PROPERTY, PLANT & EQUIPMENT, at cost.......... 12,621 12,417 Less: accumulated depreciation............. 6,206 5,890 ------------ ------------ NET PROPERTY, PLANT & EQUIPMENT...... 6,415 6,527 INTANGIBLE ASSETS............................. 594 596 OTHER ASSETS.................................. 1,037 1,037 ------------ ------------ $ 41,585 $ 44,182 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Trade payables............................. $ 2,113 $ 3,125 Contracts in progress...................... -- 1,120 Payroll related accruals................... 1,286 5,310 Other current liabilities.................. 3,869 572 ------------ ------------ TOTAL CURRENT LIABILITIES............ 7,268 10,127 DEFERRED INCOME TAXES......................... 243 243 REDEEMABLE COMMON STOCK ...................... -- 220 SHAREHOLDERS' EQUITY Common stock--par value $.10 per share: Authorized--15,000,000 shares Issued--7,412,571 shares at March 31 and December 31........................ 741 741 Additional paid-in capital................. 19,463 19,463 Retained earnings.......................... 14,480 14,218 Treasury stock, at cost, 191,008 shares at March 31, 103,317 shares at December 31.. (610) (410) Common stock subject to repurchase......... -- (420) ------------ ------------ TOTAL SHAREHOLDERS' EQUITY........... 34,074 33,592 ------------ ------------ $ 41,585 $ 44,182 ============ ============
See Notes To Condensed Financial Statements - 3 - 4 CHEMPOWER, INC. CONDENSED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended March 31 ----------------------- 1995 1994 ---------- ---------- (Dollars in thousands, except per share data) Revenues....................................... $ 19,039 $ 9,279 Cost of Revenues............................... 16,688 7,794 ---------- ---------- Gross profit.............................. 2,351 1,485 Selling, General and Administrative Expenses... 2,084 1,548 ---------- ---------- Operating income (loss)................... 267 (63) Financial Income............................... 136 96 ---------- ---------- Income before taxes....................... 403 33 Income Taxes (credit).......................... 141 (16) ---------- ---------- Net income................................ $ 262 $ 49 ========== ========== Earnings per Common and Common Equivalent Share............................. $ .04 $ .01 ========== ========== Weighted-average Number of Common and Common Equivalent Shares Outstanding......... 7,378,986 7,350,399 ========== ==========
See Notes To Condensed Financial Statements - 4 - 5 CHEMPOWER, INC. CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended March 31 ---------------------- 1995 1994 ---------- -------- (Dollars in thousands) CASH FLOWS FROM OPERATING ACTIVITIES................. $ 2,618 $ 5,407 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment....... (204) (114) Proceeds from sale of property, plant and equipment................................ -- 60 Business Acquisition, net of working capital acquired............................. -- (900) -------- -------- Net cash provided by (used for) investing activities............................... (204) (954) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of common stock.......... (200) (200) Purchase of treasury stock...................... -- 83 -------- -------- Net cash used for financing activities..... (200) (117) -------- -------- Net increase in cash and cash equivalents.. 2,214 4,336 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD..... 11,864 13,117 -------- -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD........... $ 14,078 $ 17,453 ======== ======== SUPPLEMENTAL CASH FLOW DISCLOSURE Income taxes paid (net of refunds).............. $ 93 $ -- ======== ======== SUPPLEMENTAL NONCASH FINANCING ACTIVITIES Portion of acquisition of business purchased with common stock............................ $ -- $ 375 ======== ========
See Notes To Condensed Financial Statements - 5 - 6 CHEMPOWER, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) March 31, 1995 NOTE A--BASIS OF PRESENTATION The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the financial statements reflect all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation. Operating results for the three month period ended March 31, 1995 are not necessarily indicative of the results that may be expected for the year ended December 31, 1995. For further information, refer to the financial statements and footnotes thereto included in the Company's Annual Report and Form 10-K as of December 31, 1994. NOTE B--CONTRACTS IN PROGRESS Comparative information with respect to fixed-price contracts in progress as of March 31, 1995 and December 31, 1994 is as follows:
March 31 December 31 1995 1994 ----------- ----------- (Dollars in thousands) Costs incurred on uncompleted contracts...................... $ 5,444 $ 19,559 Estimated earnings............... 305 2,092 Estimated losses................. -- (3,314) ---------- ---------- 5,749 18,337 Less billings to date............ 5,073 18,532 ---------- ---------- $ 676 $ (195) ========== ========== Included in the accompanying balance sheets under contracts in progress: Costs and estimated earnings in excess of related billings on uncompleted contracts.......... $ 676 $ 925 Billings in excess of related costs and estimated earnings on uncompleted contracts and provision for estimated losses on contracts................... $ -- $ (1,120) ---------- ---------- $ 676 $ (195) ========== ==========
- 6 - 7 CHEMPOWER, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued) March 31, 1995 NOTE C--CASH AND CASH EQUIVALENTS The Company considers all highly liquid investments with a maturity of 90 days or less when purchased to be cash equivalents. Cash equivalents consist primarily of money market funds. NOTE D--NET INCOME PER COMMON SHARE The net income per common share amounts have been computed by dividing net income by the weighted-average number of shares (common and common equivalent) outstanding. For purposes of this computation, stock options are common equivalent shares. NOTE E--REDEEMABLE COMMON STOCK During 1993, the Company entered into an agreement to purchase the common shares and options held by a former employee. The original purchase price was $819,514, of which $419,514 remained unpaid at December 31, 1994. In January 1995, the Company entered into a mutual release agreement in which the former employee rescinded his rights to the options and agreed to tender the remaining 87,691 common shares in exchange for $200,000. - 7 - 8 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Current three months compared to the same period last year Revenues for the thirteen week period ended March 31, 1995 were $19,039,000, a 105.2% increase from last year's first quarter $9,279,000. This represents increases in both of our core segments: contracts and products manufacturing and distribution. Contract revenues were $15,192,000, an increase of $8,328,000 from the $6,864,000 recorded in the first three months of 1994. This increase was the result of three major construction contracts in progress during the first quarter of 1995 as well as the inclusion of Global Power Company operations, acquired in the second quarter of 1994. Contract revenues represented 79.8% of total revenues for the first quarter of 1995, compared to 74.0% for the corresponding period of 1994. Revenues from products manufacturing and distribution were $3,847,000, which was an increase of $1,432,000 from the $2,415,000 during the same period of 1994. This increase was primarily the result of the inclusion of Owens Precision Fabricators operations, acquired in the first quarter of 1994, as well as an increased demand for products manufactured by our Houston Products division. Products manufacturing and distribution represented 20.2% of total revenues in 1995, as compared to 26.0% in 1994. Cost of contract revenues was 93.0% of contract revenues during the first quarter of 1995 versus 88.5% in 1994. The increase in this segment's cost percentage was the result of continuing competitive pricing and excess costs recognized on one major fixed-price project. Cost of products manufacturing and distribution was 66.5% of products manufacturing and distribution revenues in 1995 versus 71.1% in 1994. This cost percentage was affected by the addition of operations of the Owens Precision Fabricators division. Resulting gross profit improved $866,000 between the first quarter of 1994 and 1995, due to increased revenues in our core segments. Selling, general and administrative costs increased $536,000, or 34.6% from $1,548,000 in 1994 to $2,084,000 in 1995. The increase was primarily related to the 1994 acquisitions. Interest income was $136,000 and $96,000 for the first quarter of 1995 and 1994, respectively. This increase was the result of higher rates of return on our investments. Net income for the first quarter of 1995 was $262,000 or $.04 per share compared to $49,000 or $.01 per share in 1994. Net income increased to 1.4% of revenues compared to .5 % in 1994. - 8 - 9 MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED) Financial condition, liquidity and capital resources At March 31, 1995, the Company's working capital (current assets less current liabilities) was $ 26,271,000 versus $25,895,000 at December 31, 1994. The cash and cash equivalents component of working capital increased $2,214,000 to $14,078,000 primarily due to the increased collection efforts on trade receivables. The ratio of current assets to current liabilities (current ratio) was 4.6 at the end of the first quarter of 1995, compared to 3.6 at December 31, 1994. The Company currently has a $10,000,000 line of credit with First National Bank of Ohio. As of March 31, 1995, there were no borrowings against credit facilities available to the Company. Gross capital expenditures totaled $204,000 during the first quarter of 1995. The Company's current cash, funds available under its credit facility and future cash flow from operations should be sufficient to meet capital requirements and short-term working capital needs. Inflation The Company's operations have not been materially affected by inflation or changing prices. A majority of revenues are pursuant to contracts which enable the Company to pass labor and material cost increases to its customers. Unanticipated levels of inflation could, however, reduce the expected profit on firm price service or product distribution contracts. Events, Transactions, and Trends The Company continues to experience increased workers' compensation costs in a number of the states in which it operates. The Company closely monitors these costs and adjusts its pricing accordingly. However, an inability to pass these increases on could have an adverse affect on the Company's business. - 9 - 10 PART II. OTHER INFORMATION Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits Exhibit Number Description ------- ----------- 27.1 Financial Data Schedule (b) Reports on Form 8-K The Company did not file any reports on Form 8-K during the three months ended March 31, 1995. - 10 - 11 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. CHEMPOWER, INC. (Registrant) Date May 2, 1995 /s/ Robert E. Rohr ------------------- ----------------------------------- Robert E. Rohr Vice President of Finance and Treasurer (on behalf of the Registrant and as Principal Financial Officer) - 11 - EX-27 2 EXHIBIT 27
5 0000847595 CHEMPOWER, INC. 1,000 3-MOS DEC-31-1995 JAN-01-1995 MAR-31-1995 14,078 0 15,027 79 4,148 33,539 12,621 6,206 41,585 7,268 0 741 0 0 33,333 41,585 19,039 19,039 16,688 16,688 2,084 0 0 403 141 262 0 0 0 262 .04 .04
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