-----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, I0LFiR/mx37wpv4NVscsNAa9nfLq+GJ17x9MIq4YDnPKVm0sVbwFBcmLpRtAS8s6 F9jQdxoZyxVtukGzyIJB+g== 0000925655-97-000013.txt : 19971114 0000925655-97-000013.hdr.sgml : 19971114 ACCESSION NUMBER: 0000925655-97-000013 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971112 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: SEC FILE NUMBER: 001-13264 FILM NUMBER: 97714145 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 9/30/97 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 September 30, 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 12,038,222 shares of the Registrant's Common Stock outstanding as of November 10, 1997. TRIGEN ENERGY CORPORATION AND SUBSIDIARIES INDEX TO FORM 10-Q Quarter Ended September 30, 1997 Part I - Financial Information: Page Item 1. Financial Statements Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 1997 and 1996 (Unaudited) 2 Consolidated Balance Sheets as of September 30, 1997 (Unaudited) and December 31, 1996 3 Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 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 9 Signature 10 Part I - Financial Information Item 1. Financial Statements --------------------
TRIGEN ENERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the Three and Nine Months Ended September 30, 1997 and 1996 Unaudited (In thousands, except per share data) Three Months Nine Months -------------- ----------- 1997 1996 1997 1996 Revenues Thermal Energy $28,753 $29,091 $129,206 $135,747 Electric energy 10,247 10,083 35,809 32,460 Fees earned and other 4,024 2,472 9,637 8,343 ------- ------- -------- ------- Total revenues 43,024 41,646 174,652 176,550 ------- ------- -------- ------- Operating expenses Fuel and consumables 15,022 15,045 81,499 83,265 Production and operating costs 9,767 9,882 34,840 31,758 Depreciation 3,353 (3,483) 11,643 3,867 General and administrative 8,363 7,440 25,400 23,433 ------- ------- -------- -------- Total operating expenses 36,505 28,884 153,382 142,323 ------- ------- -------- -------- Operating income 6,519 12,762 21,270 34,227 Interest expense, net 4,614 4,338 12,875 12,968 ------- ------- -------- -------- Income before minority interests, income taxes and extraordinary item 1,905 8,424 8,395 21,259 Minority interests in earnings of subsidiaries 1,316 588 2,845 2,089 ------- ------- -------- -------- Income before income taxes & extraordinary item 589 7,836 5,550 19,170 Income taxes 241 3,079 2,275 7,734 ------- ------- -------- -------- Income before extraordinary item 348 4,757 3,275 11,436 Extraordinary loss from early extinguishment of debt, net of income tax benefit -- (1,943) -- (1,943) ------- -------- -------- -------- Net income $ 348 $2,814 $ 3,275 $ 9,493 ------- -------- -------- -------- Net income per share Before extraordinary loss $ .03 $ 41 $ .27 $ 1.00 Extraordinary loss -- (.17) -- (.17) ------- -------- --------- -------- Net income $ .03 $ .24 $ .27 $ .83 ------- --------- --------- -------- Average shares outstanding 12,113 11,510 12,127 11,495 ------- --------- --------- -------- Dividends per share $ .035 $ .035 $ .105 $ .105 ------- --------- --------- -------- See accompanying notes to consolidated financial statements
TRIGEN ENERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share data) September 30, December 31, 1997 1996 -------------- ------------ (Unaudited) Assets Current assets Cash and cash equivalents $ 16,074 $ 14,598 Accounts receivable Trade (less allowance for doubtful accounts of $1,238 in 1997 and $1,128 in 1996) 20,062 35,436 Other 5,603 3,479 -------- -------- Total accounts receivable 25,665 38,915 Inventories 6,591 6,900 Other current assets 8,212 7,346 -------- -------- Total current assets 56,542 67,759 Non-current cash and cash equivalents 4,742 10,678 Property, plant and equipment, net 381,540 374,549 Investment in non-consolidated partnerships 13,166 8,781 Intangible assets 22,245 14,390 Other assets 22,528 18,279 -------- -------- Total assets $500,763 $494,436 -------- -------- Liabilities and Stockholders' Equity Current liabilities Short-term debt $ 6,600 $18,500 Current portion of long-term debt 18,181 13,499 Accounts payable 4,195 7,800 Accrued fuel 8,714 14,394 Accrued expenses and other current liabilities 16,006 18,236 ------- --------- Total current liabilities 53,696 72,429 Long-term debt 249,213 226,487 Other liabilities 7,323 7,755 Deferred income taxes 29,853 29,597 -------- -------- Total liabilities 340,085 336,268 Minority interests in subsidiaries 16,069 16,768 Stockholders' equity Preferred stock-$.01 par value, authorized and unissued 15,000,000 shares -- -- Common stock-$.01 par value, authorized 60,000,000 shares, issued 12,053,672 shares in 1997 and 12,010,597 shares in 1996 121 120 Additional paid-in capital 113,887 112,836 Retained earnings 30,551 28,538 Cumulative translation adjustment 899 866 Treasury stock at cost, 40,985 shares in 1997 and 46,140 shares in 1996 (849) (960) -------- -------- Total stockholders' equity 144,609 141,400 -------- -------- Total liabilities and stockholders' equity $500,763 $494,436 -------- -------- See accompanying notes to consolidated financial statements.
TRIGEN ENERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Nine Months Ended September 30, 1997 and 1996 Unaudited (In thousands) 1997 1996 ---- ---- Cash flows from operating activities Net income $ 3,275 $9,493 Reconciliation of net income to cash provided by operating activities Depreciation and amortization 14,387 5,721 Deferred income taxes 256 2,087 Provision for doubtful accounts 565 296 Minority interests in subsidiaries 2,845 2,089 Changes in assets and liabilities Accounts receivable 12,685 16,628 Inventories and other current assets ( 186) ( 2,013) Accounts payable and other current liabilities (11,572) ( 8,856) Noncurrent assets and liabilities ( 4,518) ( 2,342) ------- ------- Net cash provided by operating activities 17,737 23,103 ------- ------- Cash flows from investing activities Capital expenditures (22,609) (32,161) Purchase of a fuel management agreement and related inventory (8,871) -- Proceeds on sale of property, plant & equipment 3,000 -- Investment in non-consolidated partnerships (5,582) ( 1,911) ------- ------- Net cash used in investing activities (34,062) (34,072) ------- ------- Cash flows from financing activities Decrease in short-term debt (11,900) ( 2,665) Proceeds of long-term debt 65,387 36,307 Payments of long-term debt (37,979) (19,559) Dividends paid (1,261) ( 1,225) Issuance of common stock, net 1,162 5,711 Proceeds from sale of interest rate caps -- 1,003 Distribution to minority interests (3,544) ( 2,134) ------- ------- Net cash provided by financing activities 11,865 17,438 ------- ------- Cash and cash equivalents Increase/(decrease) (4,460) 6,469 At beginning of period 25,276 20,175 ------ ------- At end of period $20,816 $26,644 ------- ------- Current $16,074 $13,602 Non-current 4,742 13,042 ------- ------- At end of period $20,816 $26,644 ------- ------- Supplemental disclosure of cash flow information Cash paid during the period for Interest $12,556 $12,734 ------- ------- Income taxes 2,548 2,635 ------- ------- Non-cash investing activity Acquisition of subsidiary -- 1,037 ------- ------- Non-cash financing activity Issuance of common stock for acquisition of subsidiary -- 1,037 ------- ------- Issuance of common stock for extinguishment of debt -- 4,250 ------- ------- See accompanying notes to consolidated financial statements.
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 September 30, 1997, and the results of operations for the three and nine months ended September 30, 1997 and 1996 and the cash flows for the nine months ended September 30, 1997 and 1996. The results of operations for the three and nine month periods ended September 30, 1997 and 1996 and cash flows for the nine month period ended September 30, 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. This change reduced 1997 third quarter net income by $.8 million or $.07 per common share and reduced net income for the nine months ended September 30, 1997 by $.2 million or $.01 per common share. The Company expects the change to positively impact the fourth quarter results. 3. Sale of Property In September 1997, the company sold a natural gas pipeline for a pre-tax gain of $668,000, or $.04 per common share. 4. Condemnation Award During the third quarter of 1996, the Company was granted a condemnation award of $6.8 million ($6.4 million, net of expenses) related to one of its facilities in Boston, Massachusetts. This award was reported in depreciation on the consolidated statements of operations. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations - --------------------- Three Months ended September 30, 1997 compared with Three Months ended September 30, 1996 Overview For the quarter ended September 30, 1997, the Company reported net income of $.3 million, or $.03 per common share, compared with net income of $2.8 million, or $.24 per common share, in the third quarter last year. Earnings for both the third quarter of 1997 and 1996 included nonrecurring items. For the third quarter of 1997, net income included a pre-tax gain of $.7 million, or $.04 per common share, on the sale of a natural gas pipeline. Earnings for the third quarter of 1996 included a nonrecurring pre-tax gain of $6.4 million, or $.36 per common share, resulting from a condemnation award. In addition, 1996 net earnings included an extraordinary loss of $1.9 million after tax, equal to $.17 per common share, on the early extinguishment of debt. Revenues were $43.0 million in the third quarter compared with $41.6 million last year. Operating income for the third quarter was $6.5 million compared with $12.8 million a year ago. Excluding the nonrecurring items and extraordinary loss, the decline in third quarter 1997 earnings was due to higher depreciation, general and administrative, and interest expenses. 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. 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 $43.0 million were up $1.4 primarily due to the sale of the natural gas pipeline. Thermal energy sales declined $.3 million, or 1%, to $28.8 million, while electric energy sales of $10.2 million were higher by $.2 million or 2%. Units of energy sold increased by 5% in the third quarter. Energy revenues were higher during the third quarter at Nassau and Tulsa, and down at Baltimore and Trenton. Operating Expenses Fuel and consumables' costs were $15.0 million in both the third quarter of 1997 and 1996. As a percent of revenues, fuel and consumables' costs were 34.9% in the third quarter of 1997 compared with 36.1% last year. Production and operating costs were down 1% to $9.8 million in the third quarter; and as a percent of revenues decreased to 22.7% from 23.7% in 1996. This reduction was due primarily to higher repair and maintenance costs last year. Depreciation expense was $3.4 million compared with a credit of $3.5 million in the third quarter of 1996. Included in 1996 depreciation expense was a $6.4 million gain resulting from a condemnation award. Excluding this gain, 1997 depreciation was higher by $.5 million, reflecting the high level of capital expenditures in the second half of 1996. General and administrative expenses increased 12% in the third quarter to $8.4 million due to higher legal fees, severance payments and write-offs of project development costs. As a percent of revenues, general and administrative expenses increased to 19.4% from 17.9% last year. Interest Expense, Net Net interest expense increased 6% to $4.6 million due to the higher level of debt. 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 was 41.0% in the third quarter of 1997 and 39.3% in the third quarter of 1996. Nine Months ended September 30, 1997 compared with Nine Months ended September 30, 1996 Overview For the nine months ended September 30, 1997, the company reported net income of $3.3 million, or $.27 per common share. This compared to net income of $9.5 million and $.83 per common share last year. Operating income was $21.3 million on revenues of $174.7 million in the first nine months of 1997 compared with operating income of $34.2 million on revenues of $176.6 million in 1996. Revenues Revenues of $174.7 million were down $1.9 million, or 1%, due to the mild weather this year. Thermal energy sales were down $6.5 million to $129.2 million, while electric energy sales increased $3.3 million to $35.8 million. Units of energy sold were down approximately 7% in the first nine months of 1997. Energy systems in Baltimore, Boston and Philadelphia were particularly affected by the milder weather. Offsetting the revenue decline in part were higher fuel prices, which are largely passed through to customers. Fees earned and other revenue increased 16% in the nine months ended September 30, 1997 due to the expansion of the Ewing Power Systems operation, which was acquired in the first quarter of 1996, and to the sale of the natural gas pipeline. This increase was partially offset by costs incurred for establishing and marketing new joint ventures. Operating Expenses Fuel and consumables' costs were $81.5 million in 1997 compared with $83.3 million last year. This decrease reflected the lower level of revenues. As a percent of revenues, fuel and consumables' costs were 46.7% in 1997 and 47.2% in 1996. Production and operating costs increased 10% to $34.8 million compared with $31.8 million last year; and as a percent of revenues increased to 19.9% from 18.0% in 1996. The higher costs resulted from expansion of Ewing Power Systems and a pipeline rupture in St. Louis. In addition, production and operating costs for 1996 included an arbitration award of $1.0 million, net of expenses. Offsetting in part the 1997 increase were higher repair and maintenance costs in 1996. Depreciation expense was $11.6 million compared with $3.9 million last year. Included in 1996 depreciation expense was a $6.4 million gain resulting from a condemnation award. Excluding this gain, 1997 depreciation was higher by $1.3 million, reflecting the high level of capital expenditures in the second half of 1996. General and administrative expenses increased $2.0 million, or 8%, to $25.4 million due mainly to higher legal fees and write-offs of project development costs. As a percent of revenues, general and administrative expenses were 14.5% in 1997 and 13.3% in 1996. Interest Expense, Net Net interest expense declined slightly to $12.9 million due to repayment of high interest rate debt, offset in part by the higher level of debt in 1997. 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 Company's effective tax rate was 41.0% for the first nine months of 1997 compared with 40.3% last year. Liquidity and Financial Position - -------------------------------- Cash and cash equivalents were $20.8 million at September 30, 1997, a decrease of $4.5 million. Working capital was $2.8 million compared with a negative $4.7 million at December 31, 1996. At September 30, 1997, receivables were down 34% to $25.7 million and inventories decreased 4% to $6.6 million from the balances at the end of 1996. Accounts payable of $4.2 million and accrued fuel of $8.7 million were down 46% and 39%, respectively. The lower levels of receivables, inventories and payables at September 30, 1997 reflect the seasonality of the Company's business. Working capital requirements vary in line with the peak heating demand in the winter and peak cooling demand in the summer. In the first nine months of 1997, the Company generated $17.7 million of cash from operating activities compared with $23.1 million last year. The lower cash from operations in 1997 was due primarily to the earnings decline and higher working capital requirements. During the first nine months of 1997, the Company had net borrowings of $15.5 million and received $3.0 million on the sale of property, plant and equipment. These funds, along with the $17.7 million of cash generated from operations and available cash at the beginning of the year were used to invest $22.6 million in capital expenditures and $5.6 million in partnership investments, purchase a fuel management agreement and related inventory for $8.9 million, and pay $1.3 million in dividends to shareholders and $3.5 million to minority interests. At September 30, 1997, total debt was $274.0 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 periods. 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%. As of June 10, 1997, the Company amended the $160 million revolving credit agreement by reducing the facility to $125 million and entered into a $35 million revolving credit facility with the same group of banks. The new facility is for an initial 364-day period and may be extended by another 364-day period. The terms and conditions of both facilities are the same. During the first nine months of 1997, stockholders' equity increased $3.2 million to $144.6 million at September 30, 1997. This increase reflects $3.3 million of net income, $1.0 million from the issuance of common stock net of stock purchases, and $.2 million of proceeds from the exercise of stock options; offset by $1.3 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. 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 6. Exhibits and Reports on Form 8-K -------------------------------- (a) The following exhibits are filed as part of this report: 27 Financial Data Schedule. (b) No reports on Form 8-K were filed for the three months ended September 30, 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: November 12, 1997 EX-27 2
5 This schedule contains summary financial information extracted from SEC Form 10-Q for quarter ending September 30, 1997 and is qualified in its entirety by reference to such financial statements. 1,000 9-MOS DEC-31-1997 SEP-30-1997 16,074 0 26,903 1,238 6,591 56,542 455,050 73,510 500,763 53,696 249,213 0 0 121 144,488 500,763 174,652 174,652 127,982 153,382 2,845 0 12,875 5,550 2,275 3,275 0 0 0 3,275 .27 .27
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