-----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, T8XZqtukHzICuIAwSwbgtJ/ayx3sQWG3NaYhSRfZacSdgbgSkihp09omIsW5/+Bq yfKbXxBtqFKWKQYc7AZhkw== 0000925655-97-000005.txt : 19970514 0000925655-97-000005.hdr.sgml : 19970514 ACCESSION NUMBER: 0000925655-97-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970513 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRIGEN ENERGY CORP CENTRAL INDEX KEY: 0000925655 STANDARD INDUSTRIAL CLASSIFICATION: STEAM & AIR CONDITIONING SUPPLY [4961] IRS NUMBER: 133378939 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-13264 FILM NUMBER: 97602090 BUSINESS ADDRESS: STREET 1: ONE WATER ST CITY: WHITE PLAINS STATE: NY ZIP: 10601 BUSINESS PHONE: 9142866600 MAIL ADDRESS: STREET 1: ONE WATER ST CITY: WHITE PLAINS STATE: NY ZIP: 10601 10-Q 1 QUARTER ENDING 3/31/97 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 quarterly period ended March 31, 1997 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 No. 1-13264 TRIGEN ENERGY CORPORATION (Exact name of Registrant as specified in its charter) Delaware 13-3378939 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) One Water Street White Plains, New York 10601 (Address of principal executive offices) (Zip Code) (914) 286-6600 (Registrant's telephone number, including area code) 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 There were 12,016,492 shares of the Registrant's Common Stock outstanding as of May 12, 1997. TRIGEN ENERGY CORPORATION AND SUBSIDIARIES INDEX TO FORM 10-Q Quarter Ended March 31, 1997 Part I - Financial Information: Page Item 1. Financial Statements Consolidated Statements of Operations for the Three Months Ended March 31, 1997 and 1996 (Unaudited) 2 Colidated Balance Sheets as of March 31, 1997 (Unaudited) and December 31, 1996 3 Consolidated Statements of Cash Flows for the Three Months Ended March 31, 1997 and 1996 (Unaudited) 4 Notes to Consolidated Financial Statements (Unaudited) 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 6 Part II - Other Information: 8 Signature 9
Part I - Financial Information Item 1. Financial Statements TRIGEN ENERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the Three Months Ended March 31, 1997 and 1996 Unaudited (In thousands, except per share data) 1997 1996 Revenues Thermal energy $66,324 $69,605 Electric energy 14,088 12,754 Fees earned and other 3,109 3,860 ------ ------ Total revenues 83,521 86,219 Operating expenses Fuel and consumables 46,503 47,808 Production and operating costs 14,182 13,161 Depreciation 4,764 4,193 General and administrative 9,495 8,914 Total operating expenses 74,944 74,076 ------ ------ Operating income 8,577 12,143 Interest expense, net 4,056 4,250 ------ ------ Income before minority interests and income taxes 4,521 7,893 Minority interests in earnings of subsidiaries 734 801 ------ ------ Income before income taxes 3,787 7,092 Income taxes 1,553 2,911 ------ ------ Net income $2,234 $4,181 ====== ====== Net income per share $ .19 $ .36 ====== ====== Average shares outstanding 11,982 11,469 ====== ====== Dividends per share $ .035 $ .035 ====== ====== See accompanying notes to consolidated financial statements.
TRIGEN ENERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share data) March 31, December 31, 1997 1996 (Unaudited) Assets Current assets Cash and cash equivalents $ 19,321 $ 14,598 Accounts receivable Trade (less allowance for doubtful accounts of $1,370 in 1997 and $1,128 in 1996) 34,204 35,436 Other 3,633 3,479 ------- ------- Total accounts receivable 37,837 38,915 Inventories 6,371 6,900 Other current assets 6,248 7,346 ------- ------- Total current assets 69,777 67,759 Non-current cash and cash equivalents 12,135 10,678 Property, plant and equipment, net 376,571 374,549 Investment in non-consolidated partnerships 8,863 8,781 Intangible assets 14,273 14,390 Other assets 19,854 18,279 ------- ------- Total assets $501,473 $494,436 ======== ======== Liabilities and Stockholders' Equity Current liabilities Short-term debt $ 17,200 $ 18,500 Current portion of long-term debt 13,780 13,499 Accounts payable 5,105 7,800 Accrued fuel 14,461 14,394 Accrued expenses and other current liabilities 28,936 19,102 ------- ------- Total current liabilities 79,482 73,295 Long-term debt 224,848 226,487 Other liabilities 7,818 7,755 Deferred income taxes 28,946 29,597 ------- ------- Total liabilities 341,094 337,134 Minority interests in subsidiaries 17,101 16,768 Stockholders' equity Preferred stock-$.01 par value, authorized and unissued 15,000,000 shares - - Common stock-$.01 par value, authorized 60,000,000 shares, issued 12,038,057 shares in 1997 and 12,010,597 shares in 1996 120 120 Additional paid-in capital 113,602 112,836 Retained earnings 30,352 28,538 Treasury stock, at cost, 38,267 shares in 1997 and 46,140 shares in 1996 (796) (960) --------- -------- Total stockholders' equity 143,278 140,534 --------- -------- Total liabilities and stockholders' equity $501,473 $494,436 ========= ======== See accompanying notes to consolidated financial statements.
TRIGEN ENERGY CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS For the Three Months Ended March 31, 1997 and 1996 Unaudited (In thousands) 1997 1996 Cash flows from operating activities Net income $2,234 $4,181 Reconciliation of net income to cash provided by operating activities Depreciation and amortization 5,647 4,811 Deferred income taxes (651) 2,832 Provision for doubtful accounts 146 66 Minority interests in subsidiaries 734 801 Changes in assets and liabilities Accounts receivable 932 (1,535) Inventories and other current assets 1,627 2,749 Accounts payable and other current liabilities 7,207 3,489 Noncurrent assets and liabilities (2,361) (699) ------- ------- Net cash provided by operating activities 15,515 16,695 ------- ------- Cash flows from investing activities Capital expenditures (6,786) (6,385) Investment in non-consolidated partnerships, net - (2,153) ------- ------- Net cash used in investing activities (6,786) (8,538) ------- ------- Cash flows from financing activities Decrease in short-term debt (1,300) (10,065) Proceeds of long-term debt 1,601 7,000 Payments of long-term debt (2,959) (1,605) Dividends paid (420) (403) Issuance of common stock, net 930 729 Proceeds from sale of interest rate caps - 1,003 Distribution to minority interests (401) (884) ------- ------- Net cash used in financing activities (2,549) (4,225) ------- ------- Cash and cash equivalents Increase 6,180 3,932 At beginning of period 25,276 20,175 ------- ------- At end of period $31,456 $24,107 ======= ======= Current $19,321 $14,091 Non-current 12,135 10,016 ------- ------- At end of period $31,456 $24,107 ======= ======= Supplemental disclosure of cash flow information Cash paid during the period for Interest $ 4,078 $ 4,325 ======= ======= Income taxes 661 1,054 ======= ======= Non-cash investing activity Acquisition of subsidiary - 1,037 ======= ======= Non-cash financing activity Issuance of common stock for acquisition of subsidiary - 1,037 ======= ======= See accompanying notes to consolidated financial statements.
[CAPTION] TRIGEN ENERGY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Basis of Presentation Trigen Energy Corporation (the "Company"), develops, owns and operates commercial district energy cogeneration systems. Trigen uses its expertise in thermal engineering and proprietary cogeneration processes to convert fuel to various forms of thermal energy and electricity at more efficient conversion rates than conventional processes. Trigen combines heat and power generation, producing electricity as a by-product, for use in its facilities and for sale to customers. The Company serves more than 1,500 customers with energy produced at 24 plants in 14 locations, including industrial plants, electric utilities, commercial and office buildings, government buildings, colleges and universities, hospitals, residential complexes and hotels. The consolidated financial statements of Trigen Energy Corporation and its subsidiaries presented herein are unaudited. However, such information reflects all adjustments, consisting of normal recurring adjustments, which are, in the opinion of management, necessary to present fairly the financial position as of March 31, 1997, and the results of operations and the cash flows for the three months ended March 31, 1997 and 1996. The results of operations and cash flows for the three month period ended March 31, 1997 are not indicative of those to be expected for the year ending December 31, 1997. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 1996 included in the Company's Annual Report on Form 10-K for the year ended December 31, 1996. Certain reclassifications have been made to the 1996 financial statements to conform to the 1997 presentation. 2. Use of Estimates The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions. Revenues and operating income are subject to seasonal fluctuation due to peak heating demand in the winter and peak cooling demand in the summer. Due to the seasonality of the Company's business, cost of energy sold for interim periods within a calendar year is based on average costs to produce and deliver energy. Effective January 1, 1997, the Company changed its estimate of the average costs to produce and deliver energy. The first quarter's net income reflects an increase of $.6 million ($.05 per share) relating to this change. The Company expects the change to negatively impact the second and third quarters' operating results and to positively impact the first and fourth quarter results. 3. Subsequent Event In March, 1990 a suit was filed by Kinetic Energy Development Corporation against the Company in the Circuit Court of Jackson County, Missouri, in connection with the Company's acquisition of the Kansas City steam system. On May 2, 1997, a judgment was entered against the Company in the amount of $4,271,000. The Company believes that the judgment was unwarranted. It will take all appropriate legal steps including an appeal, if necessary. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Three Months ended March 31, 1997 Compared with Three Months ended March 31, 1996 Overview For the quarter ended March 31, 1997, the Company reported net income of $2.2 million, or $.19 per common share. First quarter earnings in 1996 were $4.2 million, equal to $.36 per common share. Revenues were $83.5 million in the first quarter compared with $86.2 million last year. The unusually mild weather in the Northeast, especially compared with last year's severe winter, was a main factor contributing to the lower level of revenues and profits. The Company's revenues and profits are subject to seasonal fluctuation due to peak heating demand in the winter and peak cooling demand in the summer. Operating income for the first quarter was $8.6 million compared with $12.1 million a year ago. Last year's earnings included $1.9 million of income related to the completion of the financing of the Greys Ferry Cogeneration Project in Philadelphia. Also contributing to the first quarter earnings decline were higher legal fees. Effective January 1, 1997, the Company changed its estimate of the average cost to produce and deliver energy. See Note 2 of the Notes to Consolidated Financial Statements. Revenues Revenues of $83.5 million were down $2.7 million, or 3% from the first quarter of 1996, as a result of the mild weather this year compared with the severe winter last year. Thermal energy sales were down $3.3 million to $66.3 million, while electric energy sales of $14.1 million were higher by $1.3 million or 10%. Units of energy sold were down approximately 10% in the first quarter. Energy systems in Baltimore, Boston and Philadelphia were particularly affected by the milder winter weather. Offsetting in part the revenue decline due to the weather were higher fuel prices, which were largely passed through to customers. Fees earned and other revenue last year included income resulting from completion of financing for the Grays Ferry Cogeneration Project. Operating Expenses Fuel and consumables' costs were $46.5 million in the first quarter compared with $47.8 million last year. This decrease reflected the lower level of revenues. However, as a percent of revenues, fuel and consumables' costs increased to 55.7% from 55.4% in the first quarter of 1996 due primarily to higher fuel prices. Production and operating costs increased 8% to $14.2 million in the first quarter from $13.2 million in the like quarter last year; and as a percent of revenues increased to 17.0% from 15.3% in 1996. Contributing to this increase was the expansion of the Ewing Power Systems operation, which was acquired in the first quarter of 1996. Depreciation expense was $4.8 million compared with $4.2 million last year. The increase reflects the high level of capital expenditures during 1996. General and administrative expenses increased 7% in the first quarter to $9.5 million. This increase was due to higher legal fees, including litigation costs for the antitrust suit brought by the Company against OG&E in Oklahoma City. Interest Expense, Net Net interest expense declined 5% to $4.1 million due primarily to the substitution of debt with high interest rates with debt at lower interest rates. Income Taxes The Company's effective tax rate is determined primarily by the federal statutory rate of 35%, and state and local income taxes. The effective income tax rate for both the first quarter of 1997 and 1996 was 41.0%. Liquidity and Financial Position Cash and cash equivalents were $31.5 million at March 31, 1997, an increase of $6.2 million. Working capital was a negative $9.7 million at the end of the first quarter compared with a negative $5.5 million at December 31, 1996. This negative working capital will be funded through cash from operations and borrowings under the Company's revolving credit agreement. At March 31, 1997, receivables decreased 3% to $37.8 million and inventories were down 8% to $6.4 million from the balances at the end of 1996. Accounts payable were down $2.7 million to $5.1 million, and accrued expenses and other current liabilities were up $9.8 million to $28.9 million at March 31, 1997. The Company's primary source of funds for its business activities and repaying its debt has been from operations. Cash generated from operating activities was $15.5 million for the first three months of 1997 compared with $16.7 million in the like period last year. The lower cash from operations in 1997 was due primarily to the earnings decline. The $15.5 million of cash generated during the first three months of 1997 was used to invest $6.8 million in capital expenditures, repay $2.7 million of debt, and pay $.4 million in dividends to shareholders and $.4 million to minority interests. The remaining $5.2 million of cash generated from operations was added to cash and cash equivalents at March 31, 1997. At March 31, 1997, total debt was $255.8 million compared with $258.5 million at year end 1996. On April 4, 1997, the Company entered into a $160 million revolving credit agreement with several banks. This facility is for an initial period of three years and may be extended by a total of two one-year extensions. Borrowings under the facility bear interest, at the Company's option, at an annual rate equal to the base rate or the Eurodollar rate plus 3/4%. The base rate is the higher of the prime lending rate or the Federal Reserve reported Federal funds rate plus 1/2%. On April 7, an initial borrowing of $38.0 million was made under the new facility, of which $36.0 million was used to repay the prior revolving credit facility. During the first three months of 1997, stockholders' equity increased $2.7 million to $143.3 million at March 31, 1997. This increase reflects $2.2 million of net income, $.8 million from the issuance of common stock and $.1 million of proceeds from the exercise of stock options; offset by $.4 million dividend payment to shareholders. The Company's planned capital expenditures for upgrades, expansions, environmental matters and other improvements are material. The Company believes that cash provided by operations, cash on hand and available credit facilities will be sufficient to finance its capital program and several new development projects. In March, 1990 a suit was filed by Kinetic Energy Development Corporation against the Company in the Circuit Court of Jackson County, Missouri, in connection with the Company's acquisition of the Kansas City steam system. On May 2, 1997, a judgment was entered against the Company in the amount of $4,271,000. The Company believes that the judgment was unwarranted. It will take all appropriate legal steps including an appeal, if necessary. Impact of New Accounting Standard Statement of Financial Accounting Standard No. 128, "Earnings per Share" (SFAS No. 128), will require presentation of "basic" and "diluted" earnings per share for periods ending after December 15, 1997. Based on preliminary analysis, the Company does not expect the adoption of SFAS No. 128 to significantly impact earnings per share for periods previously presented. Part II - Other Information Item 1. Legal Proceedings In March, 1990 a suit was filed by Kinetic Energy Development Corporation against the Company in the Circuit Court of Jackson County, Missouri, in connection with the Company's acquisition of the Kansas City steam system. On May 2, 1997, a judgment was entered against the Company in the amount of $4,271,000. The Company believes that the judgment was unwarranted. It will take all appropriate legal steps including an appeal, if necessary. Item 6. Exhibits and Reports on Form 8-K (a) The following exhibit is filed as part of this report: 27 Financial Data Schedule (b) No reports on Form 8-K were filed for the three months ended March 31, 1997. SIGNATURE 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. TRIGEN ENERGY CORPORATION /s/ David H. Kelly David H. Kelly Vice President, Finance and Chief Financial Officer /s/ Daniel J. Samela Daniel J. Samela Controller Date: May 12, 1997 EX-27 2
5 This schedule contains summary financial information extracted from SEC Form 10-Q for quarter ending March 31, 1997 and is qualified in its entirety by reference to such financial statements. 3-MOS DEC-31-1997 MAR-31-1997 19,321 0 39,207 1,370 6,371 69,777 442,506 65,935 501,473 79,482 224,848 0 0 120 143,158 501,473 83,521 83,521 65,449 74,944 734 0 4,056 3,787 1,553 2,234 0 0 0 2,234 .19 .19
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