-----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, OzjQGRPqqpsFr0orqy9pQbbAwcMnLSWMekibeT/8+7QxeXBASJFzDNnDa45g6ljm l1W6j9a8jhDYVx+ay3BmjA== 0000925655-96-000011.txt : 19961120 0000925655-96-000011.hdr.sgml : 19961120 ACCESSION NUMBER: 0000925655-96-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961115 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: 96667254 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 FORM 10-Q FOR QUARTER ENDING 9/30/96 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 September 30, 1996 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 11,958,714 shares of the Registrant's Common Stock outstanding as of November 14, 1996. TRIGEN ENERGY CORPORATION AND SUBSIDIARIES INDEX TO FORM 10-Q Quarter Ended September 30, 1996 Part I - Financial Information: Page Item 1. Financial Statements Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 1996 and 1995 (Unaudited) 2 Condensed Consolidated Balance Sheets as of September 30, 1996 (Unaudited) and December 31, 1995 3 Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 1996 and 1995 (Unaudited) 4 Notes to Condensed Consolidated Financial Statements (Unaudited) 5 Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations 5-9 Part II - Other Information: Item 6.Exhibits and Reports on Form 8-K 9 Signature 10
TRIGEN ENERGY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS For the Three and Nine Months Ended September 30, 1996 and 1995 Unaudited (All amounts in thousands, except share and per share data) Three Months Ended Nine Months Ended September 30, September 1996 1995 1996 1995 Revenues Energy revenues $39,174 $29,801 $168,207 $127,675 Fees earned and other 2,472 1,197 8,343 4,274 _______ _______ _______ _______ Total revenues 41,646 30,998 176,550 131,949 Operating expenses Fuel and consumables 15,045 9,064 83,265 53,112 Production and operating costs 9,882 6,985 31,758 27,575 Depreciation (3,483) 2,478 3,867 9,127 General and administrative 7,440 4,964 23,433 16,651 _______ _______ _______ _______ Total operating expenses 28,884 23,491 142,323 106,465 Operating income 12,762 7,507 34,227 25,484 Other income (expense): Interest expense (4,715) (4,847) (14,180) (14,749) Other income, net 377 206 1,212 1,220 _______ _______ _______ _______ Income before minority interests, income tax expense and extraordinary loss 8,424 2,866 21,259 11,955 Minority interests in earnings of consolidated entities (588) (165) (2,089) (201) _______ _______ _______ _______ Income before income tax expense and extraordinary loss 7,836 2,701 19,170 11,754 Income tax expense 3,079 1,107 7,734 4,762 _______ _______ _______ _______ Income before extraordinary loss 4,757 1,594 11,436 6,992 Extraordinary loss on extinguishment of long-term debt, net of income taxes 1,943 --- 1,943 --- _______ _______ _______ _______ Net income $2,814 $1,594 $9,493 $6,992 ======= ======= ======= ======= Net income per share: Income before extraordinary loss $ .41 $ .14 $1.00 $ .61 ----- ----- ----- ----- Extraordinary loss (.17) -- (.17) -- _____ _____ _____ _____ Net income per share $.24 $.14 $.83 $.61 ===== ===== ===== ===== Average shares outstanding 11,509,768 11,393,280 11,495,475 11,384,600 ========== ========== ========== ========== Dividends per share $.035 $.035 $.105 $.105 ===== ===== ===== ===== See accompanying notes to condensed consolidated financial statements.
TRIGEN ENERGY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (All amounts in thousands, except share data) September 30, December 31, 1996 1995 (Unaudited) Assets Current assets: Cash and cash equivalents $ 13,602 $ 9,984 Accounts receivable: Trade (less allowance for doubtful accounts of $993 in 1996 and $697 in 1995) 18,641 36,275 Other 9,440 1,922 Inventories 6,603 6,239 Prepaid costs and other 8,539 6,890 ______ _______ Total current assets 56,825 61,310 Non-current cash and cash equivalents 13,042 10,191 Property, plant and equipment, net 363,128 341,188 Investment in non-consolidated partnerships 8,706 6,548 Intangible assets, net 15,037 15,088 Deferred costs and other assets, net 20,180 20,581 ________ ________ Total assets $476,918 $454,906 ======== ======== Liabilities and Stockholders' Equity Current liabilities: Accounts payable $4,589 $ 5,924 Accrued fuel 9,387 16,806 Accrued expenses and other 16,617 16,718 Short-term debt 11,500 14,165 Current portion of long-term debt 11,624 7,415 _______ _______ Total current liabilities 53,717 61,028 Long-term debt 231,659 223,371 Other liabilities 9,128 9,229 Deferred income tax liabilities 27,309 25,222 _______ _______ Total liabilities 321,813 318,850 Minority interests in consolidated entities 17,009 17,226 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 11,996,573 shares in 1996, 11,416,418 shares in 1995) 120 114 Additional paid-in capital 112,343 100,788 Retained earnings 26,338 18,070 Treasury stock, at cost (34,696 shares in 1996, 7,268 shares in 1995) (705) (142) ________ ________ Total stockholders' equity 138,096 118,830 Total liabilities and -------- -------- stockholders' equity $476,918 $454,906 ======== ======== See accompanying notes to condensed consolidated financial statements.
TRIGEN ENERGY CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS For the Nine Months Ended September 30, 1996 and 1995 Unaudited (All amounts in thousands) 1996 1995 Increase (decrease) in cash and cash equivalents: Net cash provided by operating activities $ 23,103 $ 13,905 _________ _________ Cash flows from investing activities: Sale of marketable securities ---- 16,361 Acquisition of energy facilities ---- (18,549) Capital expenditures (32,161) (11,578) Investment in non-consolidated partnerships, net (1,911) (1,520) ________ ________ Net cash used in investing activities (34,072) (15,286) ________ ________ Cash flows from financing activities: Short-term debt, net (2,665) (1,000) Proceeds of long-term borrowings 36,307 12,000 Payments of long-term borrowings (19,559) (3,429) Dividends (1,225) (1,195) Issuance of common stock 6,274 467 Repurchase of common stock (563) ---- Sale of interest rate caps 1,003 ---- Distribution to minority interests (2,134) ---- Deferred financing costs ---- (230) ________ ________ Net cash provided by financing activities 17,438 6,613 ________ ________ Net increase in cash and cash equivalents 6,469 5,232 Cash and cash equivalents at January 1 20,175 19,837 ________ ________ Cash and cash equivalents at September 30 $ 26,644 $ 25,069 ======== ======== Cash and cash equivalents at September 30: Current cash and cash equivalents $ 13,602 $ 13,855 Non-current cash and cash equivalents 13,042 11,214 ________ ________ Cash and cash equivalents at September 30 $ 26,644 $ 25,069 ======== ======== Supplemental disclosure of cash flow information: Cash paid during the period for: Interest (net of amounts capitalized) $ 12,734 $ 12,235 ======== ======== Income taxes $ 2,635 $ 3,298 ======== ======== 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 long-term debt $ 4,250 $ ---- ======== ======== See accompanying notes to condensed consolidated financial statements.
TRIGEN ENERGY CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Basis of Presentation Trigen Energy Corporation (the "Company") develops, owns and operates community energy systems and cogeneration facilities at 13 locations in the United States and Canada. The Company believes that it is the leading commercial owner and operator of community energy systems in North America. A community energy system consists of a central production plant that distributes steam, hot water and/or chilled water to customer buildings through underground distribution pipelines. Steam, hot water and/or chilled water are sold by the Company to over 1,500 customers, including colleges and universities, office buildings, hotels, civic and cultural landmarks, housing complexes, industrial plants and hospitals. Cogenerated electricity produced by the Company is used by the Company in eight of its systems and is sold to one steam customer and to local utilities in three communities. 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, 1996, and the results of operations for the three and nine month periods ended September 30,1996 and 1995 and the cash flows for the nine month periods ended September 30, 1996 and 1995. The results of operations for the three and nine month periods ended September 30, 1996 and cash flows for the nine month period ended September 30, 1996 are not indicative of those to be expected or the year ending December 31, 1996. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 1995 included in the Company's Annual Report on Form 10-K for the year ended December 31, 1995. 2. Condemnation Award On July 29, 1996, the Company was granted an additional condemnation award of $6.8 million ($6.4 million, net of expenses) related to one of its facilities in Boston, Massachusetts, which was received on October 17, 1996. Item 2. Management's Discussion and Analysis of Financial Condition and Results Operations Overview The Company's operations are primarily the production and distribution of steam, hot water, electricity and chilled water. Approximately 60% of total revenue is derived from long-term contracts. The Company's heating and cooling revenues and consequently its operating profits are subject to seasonal fluctuation due to heating demand in the winter and cooling demand in the summer. For the quarter ended September 30, 1996, the Company reported net income of $2.8 million or $0.24 per share compared to $1.6 million or $0.14 per share for the comparable 1995 period. For the nine months ended September 30, 1996, the Company reported net income of $9.5 million or $0.83 per share compared to $7.0 million or $0.61 per share for the comparable 1995 period. Results of Operations Three Months Ended September 30, 1996 Compared to Three Months Ended September 30, 1995 Revenues Revenues were $41.6 million for the three months ended September 30, 1996, an increase of $10.6 million, from $31.0 million in the corresponding quarter in 1995, due principally to two acquisitions consummated in September 1995, which contributed approximately 74% ($7.8 million) of the increase, and the increased price of fuel. Operating Expenses The Company's cost of sales includes fuel and consumables, production and operating costs and depreciation expense and is affected primarily by its costs for fuel, chemicals, water and other commodities. Because the Company's rates typically enable it to pass changes in its fuel and most commodity costs to the customer, such changes have little impact on operating income. The Company's cost of sales and its operating income are affected by its efficiency in converting fuel to steam, hot water, electricity and chilled water and its ability to minimize costs through automation and enhanced process control. Cost of sales as a percentage of revenues decreased from 59.8% of revenues in the third quarter of 1995 to 51.5% of revenues in the third quarter of 1996, principally due to the reduction in depreciation expense related to the gain from the condemnation award granted to the Company, offset by the increased cost of fuel. Fuel and consumables' costs were $15.0 million, or 36.1% of revenues, in the third quarter of 1996, compared to $9.1 million, or 29.2% of revenues, in the same period of 1995, an increase of $5.9 million. This increase is due to the impact of the two acquisitions ($4.1 million) and the increased price of fuel. Production and operating costs are those costs of operating the Company's facilities other than fuel and consumables, and include labor and supervisory personnel, repair and maintenance costs and plant operating costs. Production and operating costs increased to $9.9 million in the 1996 period from $7.0 million in the 1995 period, and as a percentage of revenues increased to 23.7% in the 1996 period compared to 22.5% in the 1995 period. $1.9 million of this increase is the result of the two acquisitions. Depreciation expense was negative $3.5 million in the third quarter of 1996 compared to $2.5 million in the third quarter of 1995, a decrease of $6.0 million, due a to a net gain of $6.4 million from a condemnation award granted to the Company for one of its Boston, Massachusetts facilities, offset by the impact of the two acquisitions ($0.2 million). General and administrative expenses represent on-site management and other overhead costs incurred for existing operations, as well as the Company's marketing, development and corporate management costs. General and administrative costs increased to $7.4 million, or 17.9% of revenues, in the 1996 period from $5.0 million, or 16.0% of revenues, in the 1995 period. This is primarily due to additional development staff and related costs, legal costs and the impact of the two acquisitions ($0.5 million). Operating Income Operating income was $12.8 million, or 30.6% of revenues, in the third quarter of 1996 compared to $7.5 million, or 24.2% of revenues, in the same 1995 period. This is primarily the result of lower depreciation due to the condemnation award ($6.4 million), the impact of the two acquisitions ($1.0 million), offset by increased general and administrative expenses. Interest Expense; Other Income Interest expense decreased to $4.7 million in the third quarter of 1996 from $4.8 million in the same 1995 period, primarily due to lower average interest rates. Income Tax Expense 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 of 41.9% (after the income tax benefit from the extraordinary loss) is consistent with the rate in the third quarter of 1995. Extraordinary Loss The Company prepaid $7.0 million of subordinated debt in the third quarter of 1996, which resulted in an extraordinary loss of $1.9 million, net of income taxes of $1.1 million. Nine Months Ended September 30, 1996 Compared to Nine Months Ended September 30, 1995 Revenues Revenues were $176.6 million for the nine months ended September 30, 1996, an increase of $44.7 million, from $131.9 million in the corresponding period in 1995, due principally to two acquisitions consummated in September 1995, which contributed approximately 58.6% ($26.2 million) of the increase, a colder winter in 1996 compared to 1995 and the increased price of fuel. Operating Expenses Cost of sales as a percentage of revenues decreased from 68.1% of revenues in 1995 to 67.3% of revenues in 1996 due to the reduction in depreciation expense related to the gain from the condemnation award granted to the Company, offset by the increased cost of fuel. Fuel and consumables' costs were $83.3 million, or 47.2% of revenues, in 1996, compared to $53.1 million, or 40.3% of revenues, in 1995, an increase of $30.2 million. This increase is due to the impact of the two acquisitions ($13.7 million), and the increased price of fuel. Production and operating costs increased to $31.8 million in 1996 from $27.6 million in 1995, and as a percentage of revenues decreased to 18.0% in 1996 compared to 20.9% in 1995. The increase of $5.3 million resulting from the two acquisitions was offset by cost savings, labor productivity improvements and an arbitration award. Depreciation expense was $3.9 million in 1996 compared to $9.1 million in 1995, a decrease of $5.2 million, due to a net gain of $6.4 million from a condemnation award granted to the Company for one of its Boston, Massachusetts facilities, offset by the two acquisitions ($0.7 million). General and administrative costs increased to $23.4 million, or 13.3% of revenues, in 1996, from $16.7 million, or 12.6 % of revenues, in 1995. This is primarily due to additional staff and development costs, legal costs and the impact of the two acquisitions ($1.6 million). Operating Income Operating income was $34.2 million, or 19.4% of revenues, in 1996 compared to $25.5 million, or 19.3% of revenues, in 1995. Increased general and administrative expenses offset by cost savings, primarily from efficiency and labor productivity, higher revenues, lower depreciation expense due to the condemnation award ($6.4 million), and the impact of the two acquisitions ($4.9 million), resulted in improved operating income of $8.7 million. Interest Expense; Other Income Interest expense decreased to $14.2 million in 1996 from $14.7 million in 1995, primarily due to lower average interest rates. Income Tax Expense 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 of 41.3% (after the income tax benefit from the extraordinayr loss) is consistent with the rate in 1995. Extraordinary Loss The Company prepaid $7.0 million of subordinated debt in the third quarter of 1996, which resulted in an extraordinary loss of $1.9 million, net of income taxes of $1.1 million. Liquidity and Capital Resources Liquidity The Company had cash and cash equivalents of $26.6 million at September 30, 1996 and $20.2 million at December 31, 1995, an increase of $6.4 million. The Company had short-term indebtedness outstanding of $11.5 million at September 30, 1996 compared to $14.2 million at December 31, 1995, a reduction of $2.7 million. These changes were primarily due to the use of cash on hand at December 31, 1995 and cash generated from operations during the year. Certain of the Company's debt agreements restrict payments by its subsidiaries, which are the primary obligors, to the Company unless the payments are for specified purposes or the subsidiary meets certain financial covenants. Restricted cash and cash equivalents of $16.1 million at September 30, 1996 included $8.2 million for debt service and reserve funds, $3.2 million for operations and maintenance reserves, $1.4 million available for subsidiary operating purposes and $3.3 million for certain construction projects. Restricted funds may be invested only in certain securities. At September 30, 1996, the Company had unused lines of credit available consisting of $9.7 million under a United Thermal Corporation ("UTC") revolving credit facility and $26.5 million under a corporate revolving credit facility. On August 23, 1996, the Company declared a dividend of $.035 per share of common stock to holders of record as of September 30, 1996, payable October 15, 1996. Cash Flow During the nine months ended September 30, 1996, cash provided by operating activities was $23.1 million, compared to $13.9 million for the comparable period in 1995. Net cash used in investing activities was $34.1 million for the nine months ended September 30, 1996 primarily due to capital expenditures of $32.2 million and the initial equity investment of $2.0 million in the Grays Ferry Cogeneration Facility. Net cash provided by financing activities was $17.4 million in 1996 principally reflecting debt proceeds of $36.3 million and the issuance of common stock of $6.3 million, offset by debt repayments of $22.2 million. Debt At September 30, 1996, the Company's long-term debt (including the current portion) was $243.3 million or 59.4% of total capital, at a weighted average annual interest rate of approximately 6.72% (based on three month LIBOR of 5.63% per year) and an average remaining maturity of 6.6 years. On September 30, 1996, the Company prepaid $7.0 million of subordinated debt. The prepayment was accomplished through the payment of cash and the issuance of 200,000 shares of the Company's stock to the lender. In repaying this debt, costs of $3.0 million ($1.9 million net of an income tax benefit), were incurred by the Company and were accounted for as an extraordinary loss. The Company also issued 240,000 shares of stock to its parent, Elyo, S.A. Certain of the Company's debt is variable rate or rate capped. Based upon the debt balances at September 30, 1996, a change in the LIBOR rate of .25% would have a corresponding change in interest expense of approximately $300,000 per year when three month LIBOR is under 6.25% ranging to approximately $100,000 per year when three month LIBOR is over 7.25%. Future Capital Expenditures The Company's planned capital expenditures for upgrades, expansions, environmental matters and other improvements are material. The Company believes that cash provided by operations, net of debt service, cash balances at September 30, 1996 and available credit facilities will be sufficient to finance its capital program and several new development projects. On March 11, 1996, a wholly-owned subsidiary of the Company became a one- third partner in the Grays Ferry Cogeneration Facility. Under the terms of the Partnership Agreement, in addition to its initial equity investment, the Company is required to contribute $10 million when construction is completed, which is expected in the last quarter of 1997. Part II - Other Information Item 6. Exhibits and Reports on Form 8-K (a) The following exhibits are filed as part of this report: 11 - Computation of Earnings Per Share 27 - Financial Data Schedule (b) No reports on Form 8-K were filed for the three months ended September 30, 1996. 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. TRIGEN ENERGY CORPORATION /s/ David H. Kelly David H. Kelly Chief Financial Officer /s/ Daniel J. Samela Daniel J. Samela Controller Date: November 14, 1996 EX-11 2 COMPUTATION OF EARNINGS PER SHARE
EXHIBIT 11 TRIGEN ENERGY CORPORATION AND SUBSIDIARIES Computation of Earnings Per Share (All amounts in thousands, except share and per share data) Three Months Ended Nine Months Ended September 30, September 30, 1996 1995 1996 1995 Earnings Per Share - Primary Net income $2,814 $1,594 $9,493 $6,992 ====== ====== ====== ====== Weighted average number of common and common equivalent shares applicable to primary earnings per share calculation 11,509,768 11,393,280 11,495,475 11,384,600 Dilutive effect of stock options 60,460 102,976 60,967 88,519 __________ __________ __________ __________ Weighted average number of shares outstanding 11,570,228 11,496,256 11,556,442 11,473,119 ========== ========== ========== ========== Net income per share - primary $ 0.24 $ 0.14 $0.82 $ 0.61 ========== ========== ========== ========== Earnings Per Share - Assuming Full Dilution Net income $2,814 $ 1,594 $ 9,493 $ 6,992 Plus: Interest on convertible subordinated debt (net of taxes) ---- 109 ---- 326 _________ ________ _________ _________ Net income for fully diluted earnings per share calculation $ 2,814 $ 1,703 $ 9,493 $ 7,318 Weighted average number of common and common equivalent shares applicable to fully diluted earnings per share calculation Weighted average number of shares outstanding 11,509,768 11,393,280 11,495,475 11,384,600 Shares issuable upon conversion of subordinated debt --- 225,989 --- 225,989 Dilutive effect of stock options 98,664 117,821 98,664 117,821 __________ __________ __________ __________ 11,608,432 11,737,090 11,594,139 11,728,410 ========== ========== ========== ========== Net income per share assuming full dilution $ 0.24 $ 0.15 $ 0.82 $ 0.62 ====== ====== ====== ======
-----END PRIVACY-ENHANCED MESSAGE-----