-----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, HIRMGwy+YCGY9cfTt5tN5qaguACUsxA9ojwUha8Rrq/myol/CzB/0Q1wimPZaJI8 /ca26nm/s8pftg6G3DGe/Q== 0000009263-95-000007.txt : 19951107 0000009263-95-000007.hdr.sgml : 19951107 ACCESSION NUMBER: 0000009263-95-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951106 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: BAKER MICHAEL CORP CENTRAL INDEX KEY: 0000009263 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MANAGEMENT SERVICES [8741] IRS NUMBER: 250927646 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06627 FILM NUMBER: 95587369 BUSINESS ADDRESS: STREET 1: 420 ROUSE ROAD STREET 2: AIRPORT OFFICE PARK BLDG 3 CITY: CORAOPOLIS STATE: PA ZIP: 15108 BUSINESS PHONE: 4122696300 MAIL ADDRESS: STREET 1: P O BOX 12259 CITY: PITTSBURGH STATE: PA ZIP: 15231-0259 FORMER COMPANY: FORMER CONFORMED NAME: EUTHENICS SYSTEMS CORP DATE OF NAME CHANGE: 19750527 FORMER COMPANY: FORMER CONFORMED NAME: BAKER MICHAEL JR INC DATE OF NAME CHANGE: 19720526 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1995 Commission file number 1-6627
MICHAEL BAKER CORPORATION --------------------------- (Exact name of registrant as specified in its charter) PENNSYLVANIA 25-0927646 ---------------- --------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Airport Office Park, Building 3, 420 Rouser Road, Coraopolis, PA 15108 - ---------------------------------------------------------------- ------- (Address of principal executive offices) (Zip Code) (412) 269-6300 ------------------- (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 ------ ------ Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
As of September 30, 1995: ------------------------------ Common Stock 7,006,074 shares Series B Common Stock 1,357,478 shares
PART I FORM 10-Q PAGE 1 MICHAEL BAKER CORPORATION PART I. FINANCIAL INFORMATION The condensed consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. The statements reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the periods presented. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto, included in the Company's latest annual report and Form 10-K. PART I FORM 10-Q PAGE 2 MICHAEL BAKER CORPORATION CONDENSED CONSOLIDATED STATEMENT OF INCOME (Unaudited) ===========================================================================
For the three months ended ---------------------------- Sept. 30, 1995 Sept. 30, 1994 ---------------------------------------------------------------------------- (In thousands, except per share amounts) Total contract revenues $90,620 $119,473 Cost of work performed 80,158 109,231 ----------------------------------------------------------------------------- Gross profit 10,462 10,242 General and administrative expenses 8,373 9,830 ---------------------------------------------------------------------------- Income from operations 2,089 412 Other income/(expense): Interest expense (57) (201) Interest income 32 34 Other, net (15) 107 --------------------------------------------------------------------------- Income before income taxes 2,049 352 Provision for income taxes 1,020 165 ----------------------------------------------------------------------------- Net income $1,029 $187 =========================================================================== Net income per share $0.12 $0.02 ========================================================================== The accompanying notes are an integral part of this financial statement.
PART I FORM 10-Q PAGE 3 MICHAEL BAKER CORPORATION CONDENSED CONSOLIDATED STATEMENT OF INCOME (Unaudited) ============================================================================
For the nine months ended --------------------------- Sept. 30, 1995 Sept. 30, 1994 ----------------------------------------------------------------------------- (In thousands, except per share amounts) Total contract revenues $266,110 $323,351 Cost of work performed 234,879 292,177 ---------------------------------------------------------------------------- Gross profit 31,231 31,174 General and administrative expenses 26,349 30,317 ----------------------------------------------------------------------------- Income from operations 4,882 857 Other income/(expense): Interest expense (316) (471) Interest income 81 49 Other, net 84 69 ----------------------------------------------------------------------------- Income before income taxes 4,731 504 Provision for income taxes 2,355 236 --------------------------------------------------------------------------- Net income $2,376 $268 =========================================================================== Net income per share $0.28 $0.03 =========================================================================== The accompanying notes are an integral part of this financial statement.
PART I FORM 10-Q PAGE 4 MICHAEL BAKER CORPORATION CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) ========================================================================= ASSETS Sept. 30, 1995 Dec. 31, 1994 ---------------------------------------------------------------------------- (In thousands) Current Assets Cash and cash equivalents $5,735 $3,605 Receivables Trade 52,242 53,498 Retentions under contracts 9,971 16,120 Cost of contracts in progress, plus estimated earnings recorded, less billings thereon 19,269 24,246 Prepaid expenses and other 11,487 10,670 ---------------------------------------------------------------------------- Total current assets 98,704 108,139 ----------------------------------------------------------------------------- Property, Plant and Equipment, at cost Land 693 693 Buildings and improvements 5,950 5,790 Equipment 29,314 27,619 ---------------------------------------------------------------------------- 35,957 34,102 Less - Accumulated depreciation 21,969 19,132 ---------------------------------------------------------------------------- Total property, plant and equipment, net 13,988 14,970 ----------------------------------------------------------------------------- Other Assets Goodwill, net of accum. amort. of $1,577,000 and $1,359,000 at Sept. 30, 1995 and Dec. 31, 1994, respectively 4,740 4,958 Other intangible assets, net of accum. amort. of $1,488,000 and $3,100,000 at Sept. 30, 1995 and Dec. 31, 1994, respectively 2,604 3,013 Other assets 3,211 3,714 --------------------------------------------------------------------------- Total other assets 10,555 11,685 ----------------------------------------------------------------------------- Total assets $123,247 $134,794 ============================================================================ The accompanying notes are an integral part of this financial statement.
PART I FORM 10-Q PAGE 5 MICHAEL BAKER CORPORATION CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) ========================================================================== LIABILITIES AND SHAREHOLDERS' INVESTMENT Sept. 30, 1995 Dec. 31, 1994 ---------------------------------------------------------------------------- (In thousands) Current Liabilities Current portion of long-term debt $12 $2,539 Accounts payable 27,071 42,876 Accrued employee compensation 5,589 4,224 Accrued insurance 8,503 8,167 Other accrued expenses 21,564 19,304 Excess of billings on contracts in progress over cost and estimated earnings recorded thereon 12,000 8,638 ---------------------------------------------------------------------------- Total current liabilities 74,739 85,748 ----------------------------------------------------------------------------- Other Liabilities Long-term debt 1,401 3,960 Other -- 355 ---------------------------------------------------------------------------- Total liabilities 76,140 90,063 ----------------------------------------------------------------------------- Shareholders' Investment Common Stock, par value $1, authorized 44,000,000 shares, issued 7,006,074 and 7,001,435 shares at Sept. 30, 1995 and Dec. 31, 1994, respectively 7,006 7,002 Series B Common Stock, par value $1, authorized 6,000,000 shares, issued 1,357,478 and 1,362,117 shares at Sept. 30, 1995 and Dec. 31, 1994, respectively 1,358 1,362 Paid-in surplus 36,534 36,534 Retained earnings/(accumulated deficit) 2,209 (167) --------------------------------------------------------------------------- Total shareholders' investment 47,107 44,731 --------------------------------------------------------------------------- Total liab. and shareholders' investment $123,247 $134,794 =========================================================================== The accompanying notes are an integral part of this financial statement.
PART I FORM 10-Q PAGE 6 MICHAEL BAKER CORPORATION CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) ============================================================================ For the nine months ended --------------------------------- Sept. 30, 1995 Sept. 30, 1994 ----------------------------------------------------------------------------- (In thousands) Cash Flows from Operating Activities Net income $2,376 $268 Adjustments to reconcile net income to net cash provided by/(used in)operating activities: Depreciation and amortization 3,937 3,762 Deferred income taxes 327 (2,541) Changes in assets and liabilities: Dec/(inc) in receivables, contracts in progress and advanced billings 15,745 (8,999) (Dec)/inc in accts. payable and accrd. exps. (13,836) 783 Increase in other net assets (448) (457) ---------------------------------------------------------------------------- Total adjustments 5,725 (7,452) ---------------------------------------------------------------------------- Net cash provided by/(used in) operating act 8,101 (7,184) ----------------------------------------------------------------------------- Cash Flows from Investing Activities Additions to property, plant and equipment (2,521) (4,366) ------------------------------------------------------------------------ Net cash used in investing activities (2,521) (4,366) ---------------------------------------------------------------------------- Cash Flows from Financing Activities (Repay. of)/proceeds from revolving credit loans (2,035) 11,000 Repayments of long-term debt (1,415) (512) ---------------------------------------------------------------------------- Net cash (used in)/prov. by financing act. (3,450) 10,488 ---------------------------------------------------------------------------- Net increase/(decrease) in cash and cash equivalents 2,130 (1,062) Cash and cash equivalents at beginning of year 3,605 5,103 ---------------------------------------------------------------------------- Cash and cash equivalents at end of period $5,735 $4,041 =========================================================================== Supplemental Disclosure of Cash Flow Data Interest paid $520 $477 Income taxes paid $518 $3,160 =========================================================================== The accompanying notes are an integral part of this financial statement. /TABLE PART I FORM 10-Q PAGE 7 MICHAEL BAKER CORPORATION NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE PERIODS ENDED SEPTEMBER 30, 1995 (Unaudited) NOTE 1 - LONG-TERM DEBT AND BORROWING ARRANGEMENTS In April 1995, the Company entered into an amended secured credit agreement (the "Agreement") with Mellon Bank, N.A. Under its terms, the Agreement provides for a decreasing commitment amount through May 31, 1996. The initial commitment of $17,500,000 was reduced to $15,500,000 as of September 30, 1995, and will be further reduced by $1,000,000 at the end of each calendar quarter, such that the ultimate commitment that will be in effect for the period March 31, 1996 through May 31, 1996 shall be $13,500,000. Under the Agreement, the commitment includes the sum of the principal amount of revolving credit loans outstanding and the aggregate face value of certain outstanding letters of credit. The Company believes that the commitment available will be adequate to meet its borrowing and letter of credit requirements for the term of the Agreement. The Company intends to renew the Agreement at its conclusion and believes that it will have the ability to do so. As of September 30, 1995, there were no borrowings outstanding under the Agreement; however, the Company had outstanding letters of credit totaling $4,001,000. An additional letter of credit totaling $2,800,000 was outstanding at September 30, 1995, but was not covered by the Agreement. NOTE 2 - EARNINGS PER SHARE Earnings per share computations are based upon weighted average shares of 8,371,838 and 8,363,552 shares for the three-month period, and 8,366,314 and 8,363,552 for the nine-month period ended September 30, 1995 and 1994, respectively. The Company's 1995 Stock Incentive Plan, which was approved at the annual meeting of shareholders on May 24, 1995, had no dilutive effect on earnings per share for either of the three or nine-month periods ended September 30, 1995. Stock options are included as share equivalents using the treasury stock method. The Company had no other securities included in the computation of fully diluted earnings per share. PART I FORM 10-Q PAGE 8 MICHAEL BAKER CORPORATION NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE PERIODS ENDED SEPTEMBER 30, 1995 (Unaudited) NOTE 3 - LITIGATION The Company has been named as a defendant or co-defendant in legal proceedings wherein substantial damages are claimed. Such proceedings are not uncommon to the Company's business. After consultations with counsel, management believes that the Company has recognized adequate provisions for these proceedings and their ultimate resolutions will not have a material adverse effect on the consolidated financial position or annual results of operations of the Company. The most significant of these proceedings are discussed below. In 1987, a lawsuit was brought in the Supreme Court of the State of New York, Bronx County, by the Dormitory Authority of the State of New York against a number of parties, including the Company and one of its wholly owned subsidiaries, that asserts breach of contract and alleges damages of $13 million. The Company, which was not a party to the contract underlying the lawsuit, contends that there is no jurisdiction with respect to the Company and that it cannot be held liable for any conduct of the subsidiary. Both the Company and the subsidiary are contesting liability issues and have filed cross-claims and third-party claims against other entities involved in the project. In September 1991, the Company, through a newly formed subsidiary, Baker Mellon Stuart Construction, Inc. ("BMSCI"), acquired certain assets and contracts from Federal Street Construction Co., Inc. ("FSC"), which thereafter continued to perform services under various contracts that were not acquired by BMSCI. On May 11, 1992, a public body that had contracted with FSC in 1989 to construct a $38 million project filed a lawsuit in state court in Illinois against FSC and its surety alleging various claims in connection with the contract. This contract was not acquired by BMSCI, but the plaintiff also named the Company, BMSCI and another subsidiary as defendants based upon a legal theory of successor liability by virtue of the sale of certain assets and contracts to BMSCI by FSC. Based upon facts known to management at this time and consultations with defense counsel, in manage- ment's opinion, the Company has valid defenses. PART I FORM 10-Q PAGE 9 REVIEW BY INDEPENDENT ACCOUNTANTS Price Waterhouse LLP, the Company's independent accountants, has performed a limited review of the financial information for the three-month and nine-month periods ended September 30, 1995, contained in this report. As a result of such review, no material adjustments or additional disclosures with respect to such financial information were recommended by Price Waterhouse LLP. With respect to the unaudited condensed consolidated financial information of Michael Baker Corporation and subsidiaries as of and for the three-month and nine-month periods ended September 30, 1995, Price Waterhouse LLP reported that they have applied limited procedures in accordance with professional standards for a review of such information. However, their separate report dated October 18, 1995, appearing herein, states that they did not audit and they do not express an opinion on the unaudited condensed consolidated financial information. Price Waterhouse LLP has not carried out any significant or additional tests beyond those which would have been necessary if their report had not been included. Accordingly, the degree of reliance on their report on such information should be restricted in light of the limited nature of the review procedures applied. Price Waterhouse LLP is not subject to the liability provisions of Section 11 of the Securities Act of 1933 for their report on the unaudited consolidated financial information because that report is not a "report" or a "part" of the registration statement prepared or certified by Price Waterhouse LLP within the meaning of Sections 7 and 11 of the Act. PART I FORM 10-Q PAGE 10 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Total Contract Revenues Total contract revenues were $90,620,000 for the third quarter of fiscal 1995, compared to $119,473,000 for the same period in fiscal 1994, a decrease of $28,853,000. This decrease was caused by the General Buildings business unit which experienced a reduction in total contract revenues of $28,936,000. This reduction resulted primarily from lower volumes in its construction division as well as from the substantial completion of Baker Support Services' military housing renovation business, which was discontinued in 1993. Total contract revenues were $266,110,000 for the first nine months of fiscal 1995 compared to $323,351,000 for the same period in fiscal 1994, a decrease of $57,241,000. On a nine-month basis, the General Buildings business unit accounted for $50,587,000 of this decrease for the same reasons as stated above. Gross Profit The Company's gross profit of $10,462,000 for the third quarter of 1995 represents a slight improvement over its prior year third quarter gross profit of $10,242,000; however, as a percentage of total contract revenues, gross profit climbed to 11.5% in the third quarter of 1995, compared to 8.6% in the third quarter of 1994. With the exception of the Civil business unit, each of the Company's business units reported third quarter improvements in their gross profits as a percentage of total contract revenues. The Civil unit's decrease resulted from charges taken on several projects in its engineering and Baker Support Services operations and maintenance divisions during the third quarter of 1995. The most significant percentage improvement resulted from the General Buildings business unit. This unit's construction division showed an improvement in its third quarter gross profit percentage through a combination of having completed certain lower profitability jobs since the prior year and a favorable contract settlement which offset its cost of work performed by $350,000 for the third quarter of 1995. Also affecting this unit's third quarter 1995 improvement was the reversal of reserves totaling $250,000 that were established in 1993 to provide for estimated losses on the completion of certain Baker Support Services military housing renovation contracts. The amount of reserves reversed was determined by management to be excess based on the risk remaining on the final two military housing contracts that were not yet completed at September 30, 1995. PART I FORM 10-Q PAGE 11 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Gross Profit (Cont.) Gross profit for the first nine months of 1995 was $31,231,000 versus $31,174,000 for the first nine months of 1994. General and Administrative Expenses General and administrative ("G&A") expenses decreased by $1,457,000 to $8,373,000 for the third quarter of 1995 from $9,830,000 in the third quarter of 1994. This reduction is primarily attributable to the previously-announced cost reduction programs at Baker/MO and in the construction divisions of the Company's General Buildings and Transportation business units. These cost reductions were effected during 1994 and early 1995 to better align each of the divisions with its expected revenues, and are expected to result in an annual reduction in G&A expenses of approximately $5 million. G&A expenses decreased by $3,968,000 to $26,349,000 for the first nine months of 1995 versus $30,317,000 for the same period in fiscal 1994. Income Taxes The Company had a provision for income taxes of 49.8% for the first nine months of 1995 compared to 46.8% for the first nine months of 1994. The difference between these percentages and the 34% statutory tax rate is primarily attributable to state and foreign income taxes and the nondeductibility of certain normal business expenses. The 1995 provision rate increased due to a reduction of foreign tax benefits. Another difference in the rates relates to certain states having established limitations on the amount of net operating losses that may be carried forward to benefit future years. Furthermore, certain states do not allow taxable losses generated by subsidiaries to be offset by taxable income generated by other subsidiaries within the Company's consolidated group. PART I FORM 10-Q PAGE 12 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS CONTRACT BACKLOG The funded backlog of work to be performed was $355.9 million as of September 30, 1995, compared to funded backlog of $290.2 million at June 30, 1995 and $283.3 million at December 31, 1994. "Funded" backlog represents that portion of work supported by signed contracts and for which the procuring agency has appropriated and allocated the funds to pay for the work. Total backlog, which includes that portion of contract value for which options are still to be exercised (such additive amount defined as "unfunded" backlog), was $561.4 million as of September 30, 1995, $522.4 million as of June 30, 1995, and $468.3 million at December 31, 1994. Among the more significant new work added during the third quarter of 1995 were a $55 million contract for the General Buildings unit to construct an airport terminal in Buffalo, New York, and a six-year, $11 million military housing maintenance contract plus a five-year, $6 million contract extension to provide military base operation and maintenance services for the Civil unit. LIQUIDITY AND CAPITAL RESOURCES Net cash provided by operating activities was $8,101,000 for the first nine months of 1995, compared to net cash used in operating activities of $7,184,000 for the same period in 1994. The most significant source of cash from operating activities during 1995 was a reduction of $15,745,000 in accounts receivable and other contract-related assets. This reduction reflects a cash flow improvement from the first nine months of 1994 by $24,744,000, due to the combination of lower 1995 business volumes and significant cash collections related to claims resolutions on certain construction contracts. The most significant use of cash from operating activities was a decrease in accounts payable and other accrued expenses by $13,836,000. This decrease adversely affected cash flow relative to the comparable 1994 period by $14,619,000, and is primarily attributable to the lower volume of business and a change in the Company's construction contract mix toward more self-performed work in 1995 relative to the fourth quarter of 1994. Self-performed work requires payments to the Company's employees as the work is performed, while subcontracted work requires payments to subcontractors only after the Company receives related payments from its customers. Net cash used in investing activities was $2,521,000 for the first nine months of 1995, compared to $4,366,000 for the first nine months of 1994. This amount solely comprises capital expenditures for both periods. During the first nine months of 1994, non-recurring capital expenditures totaling $974,000 related to the completion of renovations to the Company's office building in Beaver, Pennsylvania, were incurred. The remainder of the PART I FORM 10-Q PAGE 13 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES (Cont.) current year reduction reflects management's concerted effort to more closely monitor capital expenditures in 1995. Net cash used in financing activities was $3,450,000 for the first nine months of 1995 compared to net cash provided by financing activities of $10,488,000 in 1994. The 1995 usage resulted from the repayment of all borrowings on the Company's revolving credit facility during the first nine months of 1995. The Company's working capital increased slightly during the first nine months of 1995 to $23,965,000 at September 30, 1995, from $22,391,000 at December 31, 1994. The current ratio increased to 1.32:1 at September 30, 1995, compared to 1.26:1 at December 31, 1994. These improvements reflect the result of the Company being in an invested position of $3,657,000 at September 30, 1995, as compared with a net borrowed position at the end of 1994. In April 1995, the Company entered into an amended secured credit agreement with Mellon Bank, N.A. This agreement provides for a decreasing commitment amount, which covers loans and letters of credit, through May 31, 1996. The initial commitment of $17,500,000 was reduced to $15,500,000 as of September 30, 1995, and will be further reduced by $1,000,000 at the end of each calendar quarter. As of September 30, 1995, there were no borrowings outstanding under the credit agreement. During the third quarter of 1995, the Company reduced the outstanding letters of credit by approximately $2,900,000 to $4,001,000 by securing its insurance program through a bonding arrangement. Management believes that the credit agreement will be adequate to meet its borrowing and letter of credit requirements through May 31, 1996. The Company is required to provide bid and performance bonding on certain construction contracts, and has a $350 million bonding line available through Aetna Casualty and Surety Company. Management believes that its bonding line will be sufficient to meet its bid and performance needs for the foreseeable future. A significant portion of the Company's cash flow is dependent upon appropriations of public funds and the timing of payments under long-term contracts. The Company's short and long-term liquidity will be affected by the narrow margins on construction work in backlog, and its ability to sustain profitable operations and to control costs during periods of lower PART I FORM 10-Q PAGE 14 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES (Cont.) volumes. Management has already reduced overhead significantly and will reduce it further if business conditions require such actions. Additional external factors such as price fluctuations in the energy industry and the effects of interest rates on private construction projects could affect the Company. At this time, management believes that funds generated from operations and existing short-term and potential long-term borrowing capabilities will be sufficient to meet its operating requirements for the next year. PART I FORM 10-Q PAGE 15 Independent Accountant's Review Report October 18, 1995 To the Shareholders and Board of Directors of Michael Baker Corporation We have reviewed the accompanying condensed consolidated balance sheet of Michael Baker Corporation (a Pennsylvania Corporation) and subsidiaries (the Company) as of September 30, 1995, and the related condensed consolidated statements of income and of cash flows for the 3-month and 9-month periods then ended. This financial information is the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying interim financial information as of September 30, 1995, and for the 3-month and 9-month periods then ended, for it to be in conformity with generally accepted accounting principles. The condensed consolidated statements of income and cash flows for the 9-month period ended September 30, 1994, represent the combination of the condensed statements for the 3-month period ended September 30, 1994, reviewed by us, and the condensed statements for the 6-month period ended June 30, 1994, reviewed by other independent accountants whose report dated July 19, 1994, stated that they were not aware of any material modifications that should be made to such interim financial information for it to be in conformity with generally accepted accounting principles. We previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet as of December 31, 1994, and the related consolidated statements of income, of changes in shareholders' investment and of cash flows for the year then ended (not presented herein), and in our report dated February 17, 1995, except as to Note 6, which is as of April 13, 1995, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 1994, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived. PRICE WATERHOUSE LLP Pittsburgh, Pennsylvania PART II FORM 10-Q PAGE 16 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K -------------------------------- (a) The following exhibits are included herewith as a part of this Report:
Exhibit No. Description ----------- ------------ 15 Letter regarding unaudited interim financial information
(b) Reports on Form 8-K During the third quarter ended September 30, 1995, the Company filed no reports on Form 8-K. 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. MICHAEL BAKER CORPORATION Dated: November 6, 1995 By: /s/ J. Robert White --------------------- J. Robert White Executive Vice President, Chief Financial Officer and Treasurer
EX-27 2
5 1000 9-MOS DEC-31-1995 JAN-01-1995 SEP-30-1995 5,735 0 52,242 0 19,269 98,704 35,957 21,969 123,247 74,739 1,401 8,364 0 0 38,743 123,247 266,110 266,110 234,879 234,879 0 0 316 4,731 2,355 2,376 0 0 0 2,376 .28 .28
EX-15 3 Exhibit No. 15 November 6, 1995 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Ladies and Gentlemen: We are aware that Michael Baker Corporation (the Company) has included our report dated October 18, 1995 (issued pursuant to the provisions of Statement on Auditing Standards No. 71) in the Company's Form 10-Q to be filed on or about November 6, 1995. We are also aware of our responsibilities under the Securities Act of 1933. Yours very truly, PRICE WATERHOUSE LLP Pittsburgh, Pennsylvania -----END PRIVACY-ENHANCED MESSAGE-----