-----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, OIR9CABUod8Q9PnmNlPijGCOy/6UOSaxUX13u1zOruzSyErRizAXFj2Id9RYDjUs soDnHvStyex3jL3vW2Z+pg== 0000950147-96-000349.txt : 19960816 0000950147-96-000349.hdr.sgml : 19960816 ACCESSION NUMBER: 0000950147-96-000349 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960814 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERNATIONAL FIBERCOM INC CENTRAL INDEX KEY: 0000924632 STANDARD INDUSTRIAL CLASSIFICATION: CABLE & OTHER PAY TELEVISION SERVICES [4841] IRS NUMBER: 860271282 STATE OF INCORPORATION: AZ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 001-13278 FILM NUMBER: 96613243 BUSINESS ADDRESS: STREET 1: 3615 S 28TH ST STREET 2: SUITE 180 CITY: PHOENIX STATE: AZ ZIP: 85040 BUSINESS PHONE: 6029411900 MAIL ADDRESS: STREET 1: 3615 S 28TH STREET STREET 2: 520 S 52ND STREET STE 201 CITY: PHOENIX STATE: AZ ZIP: 85040 10QSB 1 FORM 10-QSB SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-QSB QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended June 30, 1996 SEC File No 1-9690 INTERNATIONAL FIBERCOM, INC. Incorporated in the State of Arizona IRS No. 86-0271282 3615 S. 28th Street Phoenix, AZ 85040 (602) 941-1900 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 report), and (2) has been subject to such filing requirements for the past 90 days. Yes (X) No ( ) Common Stock without par value (6,238,329) shares outstanding at June 30, 1996 1 PART 1 - Financial Information Item 1.Financial Statements The financial statements are included herewith commencing on page F-1. Item 2.Management's Discussion any Analysis of Financial Condition and Results of Operations. Operations. General - ------- The Company continued to generate and review new contract opportunities as well as renegotiate with existing clients during the second quarter or 1996. Income and profitability were adversely affected by a sixty day slow down with Cox Communications, as well as a lack of new contracts with US West in this quarter. Utility division revenues remained essentially flat in the second quarter. Results of Operations. - ---------------------- The following discussion relates to the actual operations of the Company in 1996 and for the same period of 1995. Revenues. - --------- Revenues increased by 6% for the three months ended June 30, 1996 to $2,939,969 compared to $2,775,971 for the three months ended June 30, 1995. The increase is attributable primarily to increased production for Salt River Project and to a subdivision development. Although revenues increased slightly the percentage of revenues attributable to the installation of fiber-optic and telecommunications systems decreased from 76% in the 1995 quarter to 51% in the current quarter of 1996. This decrease was due to delays in work orders from Cox Communications, Inc. and US West, because of certain right of way negotiations with municipalities. During the 1996 quarter approximately 19% of revenues were attributable to sewer and water installation and subdivision development, 18% to electric installation primarily for S.R.P. and 12% for miscellaneous projects, including concrete replacement for the City of Phoenix. 2 Gross Profit. - ------------- The Company's gross profit for the 1996 quarter was $508,194, or 17% of revenues, compared to $419,060, or 15% of revenues, for the comparable period of 1995. The Company's gross profit increased due to improved daily production achieved through better scheduling and field supervision. General and Administrative Costs. - --------------------------------- The Company's general and administrative expenses were $597,957, or 20% of revenues, for the 1996 quarter compared to $678,602, or 24% of revenues, for the 1995 quarter. The decrease in expenses is due primarily to reduction in management personnel. Other Income Expense. - --------------------- The other income and expense in the 1996 quarter resulted in $94,547 net expense as compared to net income of $41,886 in the comparable quarter or 1995. This difference is due to the increase in interest expense because of increased Company debt due to equipment purchases as well as charges due for late payments on various accruals. In addition, the Company reported only a gain of $3,698 on disposal of equipment versus $84,166 in the 1995 quarter, when several major pieces of equipment were sold or traded. Income Tax Expense. - ------------------- The Company accrued no federal or state income taxes for the 1996 quarter because of the net operating loss carry forwards attributable to the 1995 results. Net Income. - ----------- The Company incurred a net loss of $184,290 for the 1996 quarter as compared to a net loss of $217,656 for the second quarter of 1995. This improvement is due primarily to improved gross profit margins and major reductions in general and administrative expenses. Backlog. - -------- The Company had a backlog of approximately $1.5 million, on a work in process basis, as of June 30, 1996. All such work orders are expected to be completed by September 1996. In addition, an excess of $1 million of projects were signed but unstarted as of June 1996. The company expects that all such work will be started and completed by the end of 1996. Capital Resources and Liquidity. - -------------------------------- At June 30, 1996, the Company had $255,974 in cash and an approximate $800,000 line of credit. Such line of credit bears interest at the prime rate of First Interstate Bank plus 1.5%. The Company believes that the working capital provided by its 1996 private placement of Preferred Stock, along with expected internally generated working capital from the operation of Kleven's business in 1996, will satisfy business growth for the next twelve months. 3 INTERNATIONAL FIBERCOM, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (Unaudited) JUNE 30, 1996
ASSETS June 30, December 31, 1996 1995 ----------- ----------- Current Assets: Cash and cash equivalents $ 255,974 $ 8,749 Accounts receivable - trade, net of allowance 2,466,600 2,437,648 - other 27,769 45,700 Subscriptions receivable 0 2,373,500 Inventory 0 0 Income tax refund receivable 0 26,000 Prepaid expenses 65,003 47,610 Loans receivable related parties 374,808 371,781 Accrued interest receivable 0 0 Costs and estimated earnings in excess of billings 462,413 451,503 =========== =========== Total Current Assets 3,652,567 5,762,491 =========== =========== Property and Equipment, net 2,952,817 3,195,276 =========== =========== Other Assets: Accounts receivable long term 115,565 155,565 Loans receivable related parties 293,792 293,792 Goodwill, net 2,736,552 2,795,615 Mortgage closing costs 6,188 6,343 Investment in limited partnership 28,781 24,541 Refundable deposits 12,472 13,450 =========== =========== 3,193,350 3,289,306 =========== =========== Total Assets 9,798,734 $12,247,073 =========== ===========
F-1 INTERNATIONAL FIBERCOM, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (Continued) AS OF JUNE 30, 1996 (unaudited) LIABILITIES AND STOCKHOLDER'S EQUITY
June 30, December 31, 1996 1995 ------------ ------------ Current Liabilities: Bank Overdraft 0 $ 57,751 Notes payable-current portion 728,000 2,096,466 Notes payable-term loans 624,638 0 Notes payable related parties 10,000 60,000 Obligations under capital lease 112,491 112,491 Accounts Payable -trade 1,148,824 1,785,999 -related parties (5,995) 52,121 Accrued expenses 189,088 946,730 Accrued interest 0 0 Deferred income tax payable 0 0 Billings in excess of costs estimated earnings 110,372 286,178 ============ ============ Total Current Liabilities 2,917,418 5,397,736 ============ ============ Long-Term Liabilities: Notes payable-long term 403,034 700,706 Obligations under capital lease 433,632 494,100 Deferred income taxes payable 0 0 ============ ============ Total Long Term Liabilities 836,666 1,194,806 ============ ============ Total Liabilities 3,754,084 6,592,542 ============ ============ Stockholders' Equity: Series A convertible preferred stock, 10,000,000 shares authorized 1,972 and 2,750 issued respectively 1,694,856 2,296,382 Common stock, no par, 100,000,000 shares authorized 8,383,873 7,274,929 Common stock warrants 99,082 99,082 Additional paid in capital 352,073 352,073 Retained earnings (3,817,217) (3,699,918) ============ ============ 6,712,667 6,322,548 Less: treasury stock 178,690 shares, at cost (668,017) (668,017) ============ ============ Total Stockholders' Equity 6,044,650 5,654,531 ============ ============ Total Liabilities and Stockholders' Equity $ 9,798,734 $ 12,247,073 ============ ============
F-2 INTERNATIONAL FIBERCOM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Three Months Six Months Six Months Ended Ended Ended Ended June 30, 1996 June 30, 1995 June 30, 1996 June 30, 1995 Contract Revenues $ 2,939,969 $ 2,775,971 $ 6,365,836 $ 6,552,158 Cost of Contract Revenues 2,431,775 2,356,911 $ 5,233,099 5,442,753 =========== =========== =========== =========== Gross Profit 508,194 419,060 $ 1,132,737 1,109,405 General and Administrative Expenses 597,937 678,602 $ 1,129,378 1,225,670 =========== =========== =========== =========== Profit from operations (89,743) (259,542) $ 3,360 (116,265) Other Income (Expense): Interest income 753 16,700 5,659 17,036 Interest expense (84,964) (58,462) (191,898) (86,036) Other income (14,304) (518) 36,500 62,971 Gain on disposal of assets 3,968 84,166 29,082 141,834 =========== =========== =========== =========== (94,547) 41,886 (120,658) 135,805 =========== =========== =========== =========== Net income before income taxes ($ 184,290) ($ 217,656) ($ 117,298) 19,540 =========== =========== =========== =========== Provision for tax benefit (expense) 0 0 0 0 =========== =========== =========== =========== Net income ($ 184,290) ($ 217,656) ($ 117,298) $ 19,540 =========== =========== =========== =========== Earnings (loss) per Share: ($ 0.03) ($ 0.05) ($ 0.02) $ 0.01 ----------- ----------- ----------- ----------- Weighted average Shares Outstanding 5,452,553 4,238,382 4,845,467 2,904,962 =========== =========== =========== ===========
F-3 INTERNATIONAL FIBERCOM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) SIX MONTHS ENDED JUNE 30, 1996 AND 1995
1996 1995 ----------- ----------- Cash flows from operating activities: Net income (loss) ($117,298) $ 19,540 Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities: Depreciation and Amortization 398,588 212,578 (Increase) decrease in contracts receivable 2,373,500 703,613 (Increase) decrease in inventory 0 132,000 (Increase) decrease in costs and estimated earnings in excess of billings on uncompleted contracts (10,910) (879,330) (Increase) decrease in prepaid expenses (17,393) (84,073) (Increase) decrease in income tax refund $26,000 205,238 (Decrease) increase in accounts payable ($695,288) 153,774 (Decrease) increase in accrued expenses ($757,642) (152,480) (Decrease) increase in billings in excess of cost and estimated earnings on uncompleted contracts ($175,806) 108,215 =========== =========== Net cash provided (used) by operating activities 1,052,730 419,075 =========== =========== Cash flows from investing activities: (Purchase) sale of property and equipment (126,598) (89,360) (Increase) decrease in deposits and 978 (4,643) (Increase) decrease in goodwill and other assets 25,447 0 =========== =========== Net cash provided (used) by investing activities ($100,173) (94,003) =========== =========== Cash flows from financing activities: (Repayment) on capital lease obligation 0 0 (Repayment) increase of loans and other liabilities payable (1,151,969) (92,336) Proceeds from private offering, net $507,415 29,531 (Repayment) proceeds from stockholder loan (3,027) (76,791) =========== =========== Net cash provided (used) by financing activities (647,581) (139,596) =========== =========== Net (decrease) increase in cash 304,976 185,476 Cash, beginning of period (49,002) (93,512) Cash, end of period $255,974 91,964 =========== ===========
F-4 INTERNATIONAL FIBERCOM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) FOR THE PERIOD ENDED JUNE 30, 1996 AND THE YEAR ENDED DECEMBER 31, 1995
Series A Convertible Common Stock Additional Treasury Preferred ---------------------------- Stock Accumulated Paid - In Stock Shares Issued Amount Warrants Deficit Capital Stock -------------- ------------- ------------- ------------- ------------- ----------- ----------- Stockholders' Equity, December 31, 1994 - 4,417,072 7,274,929 99,082 (1,511,535) 352,073 (668,017) Issuance of 2,750 shares of Series A Convertible Preferred, net of costs 2,296,382 - - - - - - Net Loss, 1995 - - - - (2,188,383) - - -------------- ------------- ------------- ------------- ------------- ----------- ----------- Stockholders' Equity, December 31, 1995 $2,296,382 4,417,072 $7,274,929 $99,082 ($3,699,918) $352,073 ($668,017) Conversion of 1,328 shares of Series A Convertible Preferred Stock to 1,821,257 shares of Common Stock ($1,108,944) 1,821,257 1,108,944 - - - - Issuance of 550 shares of Series A Convertible Preferred, net of costs 507,418 - - - - - - Net Loss, June 30, 1996 - - - - (117,298) - - -------------- ------------- ------------- ------------- ------------- ----------- ----------- Stockholders' Equity, June 30, 1996 $1,694,856 6,238,329 $8,383,873 $99,082 ($3,817,216) $352,073 ($668,017) ============== ============= ============= ============= ============= =========== ===========
F-5 INTERNATIONAL FIBERCOM, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. Significant accounting policies: Basis of presentation: In the opinion of management, the accompanying consolidated financial statements reflect all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position as of June 30, 1996 and the results of its operations for the six months ended June 30, 1996. Although management believes that the disclosures in these financial statements are adequate to make the information presenting not misleading, certain information and footnote disclosures normally included in financial statements that have been prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities Exchange Commission. The results of operations for the six months ended June 30, 1996 are not necessarily indicative of the results that may be expected for the full year ending December 31, 1996. The accompanying consolidated financial statement should be read in conjunction with the more detailed financial statements, and the related footnotes thereto, filed with the Company's Annual Report on form 10-KSB for the year ended December 31, 1995. Principles of consolidation: The consolidated financial statements include the financial position, results of operations and cash flows of International FiberCom, Inc., and its wholly-owned subsidiary, Kleven Construction, Inc. All material intercompany transactions, accounts and balances have been eliminated. Stock options, and restricted stock plans: At June 30, 1996 the Company had a stock-based compensation plan, described below. The Company applies APB Opinion 25 and related Interpretations in accounting for its plan. There was no compensation cost charged against income for its performance-based plan for the period ended June 30, 1996. Had compensation cost for the Company's stock-based plan been determined based on the fair value at the grant dates for awards under the plan consistent with the method of FASB Statement 123, the Company's net loss and loss per share would have been changed to the pro forma amounts indicated below: F-6 INTERNATIONAL FIBERCOM, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Three Months Six Months Ended Ended June 30, 1996 June 30, 1996 ------------- ------------- Net Loss As reported $184,290 $117,298 Pro Forma $221,490 $154,498 Primary Loss Per Share As reported .04 .02 Pro Forma .05 .03 During the year ended December 31, 1994, the Company adopted the 1994 Incentive Stock Option Plan. The Plan authorizes the Company to grant incentive stock options and non-qualified stock options to key employees of the Company. In addition, the Company has adopted the 1994 Restricted Stock Plan. This Plan authorizes the granting of restricted shares of common stock to key employees, consultants, researchers, and members of the Advisory Board. Under the above Plans, 441,707 shares of common stock are reserved for issuance. During the six months ended June 30, 1996, 365,000 options were granted at an exercise price of $1 1/8 per share with a term of 10 years. No restricted common stock was awarded pursuant to the aforementioned plans. None of the options have been exercised as of June 30, 1996. In addition, during the six month period ended June 30, 1996, the Company issued 100,000 options to non-employees of the Company. The options are exercisable at a price of $1 1/8 per share for a term of 10 years. Private Placement Offering: During the period ended June 30, 1996, the Company commenced a Private Placement Offering to investors outside the United States of 550 shares of Series A convertible preferred stock at $1,000 per share. The net proceeds of the offering were $507,418. The funds from the offering were received during the second quarter of 1996. F-7 PART II OTHER INFORMATION ----------------- Response to Items 1-5 are omitted since these items are inapplicable to this report. Item 6. The Company filed a Report on Form 8-K dated March 31, 1995, with the Securities and Exchange Commission, reporting the divestiture of International Environmental Corporation. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. INTERNATIONAL FIBERCOM, INC. BY Terry Beiriger ----------------------------------------- Terry Beiriger, Chief Financial Officer DATED: August 13, 1996 11 EX-27 2 FINANCIAL DATA SCHEDULE
5 0000924632 INTERNATIONAL FIBERCOM INC 1 U.S. DOLLARS 6-MOS DEC-31-1996 JAN-01-1996 JUN-30-1996 1 255,974 0 2,494,369 0 0 3,652,567 5,036,720 2,083,903 9,798,734 2,917,418 0 0 1,699,856 8,383,873 (4,034,079) 9,798,734 6,365,836 6,437,077 5,233,099 6,362,477 0 0 191,898 (117,298) (117,298) (117,298) 0 0 0 (117,298) (.02) 0
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