-----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, MMKWIVVq5rZ8ptTEv6J9gLcosIauYkLZAhou1ViDTm1QqR103QQYFUc9Tluflanh g92JFuocoDgNpCElei+rJQ== 0000009263-96-000008.txt : 19960813 0000009263-96-000008.hdr.sgml : 19960813 ACCESSION NUMBER: 0000009263-96-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960812 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: 96607868 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 June 30, 1996 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 June 30, 1996: -------------------- Common Stock 7,045,957 shares Series B Common Stock 1,350,834 shares
FORM 10-Q PART I 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. Although 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, 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. Certain 1995 financial statement amounts have been reclassified to conform with 1996 classifications. 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. FORM 10-Q PART I PAGE 2 MICHAEL BAKER CORPORATION CONDENSED CONSOLIDATED STATEMENT OF INCOME (Unaudited) ============================================================================
For the three months ended ------------------------------- June 30, 1996 June 30, 1995 - ---------------------------------------------------------------------------- (In thousands, except per share amounts) Total contract revenues $102,996 $88,946 Cost of work performed 90,782 77,535 - ---------------------------------------------------------------------------- Gross profit 12,214 11,411 General and administrative expenses 10,049 9,487 - ---------------------------------------------------------------------------- Income from operations 2,165 1,924 Other income/(expense): Interest expense (15) (134) Interest income 85 21 Other, net 158 41 - ---------------------------------------------------------------------------- Income before income taxes 2,393 1,852 Provision for income taxes 1,101 937 - ---------------------------------------------------------------------------- Net income $1,292 $915 ============================================================================ Net income per share $0.15 $0.11 ============================================================================ The accompanying notes are an integral part of this financial statement.
FORM 10-Q PART I PAGE 3 MICHAEL BAKER CORPORATION CONDENSED CONSOLIDATED STATEMENT OF INCOME (Unaudited) ============================================================================
For the six months ended ------------------------------- June 30, 1996 June 30, 1995 - ---------------------------------------------------------------------------- (In thousands, except per share amounts) Total contract revenues $187,015 $175,490 Cost of work performed 164,395 154,189 - ---------------------------------------------------------------------------- Gross profit 22,620 21,301 General and administrative expenses 19,627 18,508 - ---------------------------------------------------------------------------- Income from operations 2,993 2,793 Other income/(expense): Interest expense (46) (258) Interest income 216 48 Other, net 178 99 - ---------------------------------------------------------------------------- Income before income taxes 3,341 2,682 Provision for income taxes 1,537 1,336 - ---------------------------------------------------------------------------- Net income $1,804 $1,346 ============================================================================ Net income per share $0.21 $0.16 ============================================================================ The accompanying notes are an integral part of this financial statement.
FORM 10-Q PART I PAGE 4 MICHAEL BAKER CORPORATION CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) ============================================================================
ASSETS June 30, 1996 Dec. 31, 1995 - ---------------------------------------------------------------------------- (In thousands) Current Assets Cash $4,473 $14,303 Trade receivables 66,421 53,708 Cost of contracts in progress, plus estimated earnings recorded, less billings thereon 22,302 19,104 Prepaid expenses and other 8,934 7,816 - ---------------------------------------------------------------------------- Total current assets 102,130 94,931 - ---------------------------------------------------------------------------- Property, Plant and Equipment, net 11,922 12,558 Other Assets Goodwill, net of accumulated amortization of $1,827,000 and $1,649,000 at June 30, 1996 and December 31, 1995, respectively 5,475 4,667 Other intangible assets, net of accumulated amortization of $1,899,000 and $1,625,000 at June 30, 1996 and December 31, 1995, respectively 2,204 2,467 Other assets 3,023 2,753 - ---------------------------------------------------------------------------- Total other assets 10,702 9,887 - ---------------------------------------------------------------------------- Total assets $124,754 $117,376 ============================================================================ The accompanying notes are an integral part of this financial statement.
FORM 10-Q PART I PAGE 5 MICHAEL BAKER CORPORATION CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) ============================================================================
LIABILITIES AND SHAREHOLDERS' INVESTMENT June 30, 1996 Dec. 31, 1995 - ---------------------------------------------------------------------------- (In thousands) Current Liabilities Notes payable $1,280 $1,204 Accounts payable 30,560 30,879 Accrued employee compensation 6,596 5,703 Accrued insurance 6,072 6,204 Other accrued expenses 17,750 15,261 Excess of billings on contracts in progress over cost and est. earnings recorded thereon 12,899 10,494 - ---------------------------------------------------------------------------- Total current liabilities 75,157 69,745 - ---------------------------------------------------------------------------- Shareholders' Investment Common Stock, par value $1, authorized 44,000,000 shares, issued 7,046,000 and 7,012,000 shares at June 30, 1996 and December 31, 1995, respectively 7,046 7,012 Series B Common Stock, par value $1, authorized 6,000,000 shares, issued 1,351,000 and 1,352,000 shares at June 30, 1996 and December 31, 1995, respectively 1,351 1,352 Paid-in surplus 36,663 36,534 Retained earnings 4,537 2,733 - --------------------------------------------------------------------------- Total shareholders' investment 49,597 47,631 - --------------------------------------------------------------------------- Total liab. and shareholders' investment $124,754 $117,376 =========================================================================== The accompanying notes are an integral part of this financial statement.
FORM 10-Q PART I PAGE 6 MICHAEL BAKER CORPORATION CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) =============================================================================
For the six months ended ---------------------------- June 30, 1996 June 30, 1995 - ----------------------------------------------------------------------------- (In thousands) Cash Flows from Operating Activities Net income $1,804 $1,346 Adjustments to reconcile net income to net cash (used in)/provided by operating activities: Depreciation and amortization 2,392 2,585 Deferred income taxes 461 (314) Changes in assets and liabilities: (Increase)/decrease in receivables, contracts in progress and advance billings (13,506) 9,754 Increase/(decrease) in accounts payable and accrued expenses 3,018 (10,603) Increase in other net assets (2,670) (79) - ---------------------------------------------------------------------------- Total adjustments (10,305) 1,343 - ---------------------------------------------------------------------------- Net cash (used in)/prov by operating act. (8,501) 2,689 - ---------------------------------------------------------------------------- Cash Flows from Investing Activities Additions to property, plant and equipment (1,317) (2,000) - ---------------------------------------------------------------------------- Net cash used in investing activities (1,317) (2,000) - ---------------------------------------------------------------------------- Cash Flows from Financing Activities Repayments of revolving credit loans 0 (1,553) Repayments of long-term debt (12) (1,415) - ---------------------------------------------------------------------------- Net cash used in financing activities (12) (2,968) - ---------------------------------------------------------------------------- Net decrease in cash (9,830) (2,279) Cash at beginning of year 14,303 3,605 - ---------------------------------------------------------------------------- Cash at end of period $4,473 $1,326 ============================================================================ Supplemental Disclosure of Cash Flow Data Interest paid $33 $419 Income taxes paid $204 $313 ============================================================================ The accompanying notes are an integral part of this financial statement.
FORM 10-Q PART I PAGE 7 MICHAEL BAKER CORPORATION NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE PERIODS ENDED JUNE 30, 1996 (Unaudited) NOTE 1 - PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consists of the following (in thousands):
At 6/30/96 At 12/31/95 --------------------------- Land $ 693 $ 693 Buildings and improvements 6,059 5,952 Equipment and vehicles 29,018 28,202 - ------------------------------------------------------------------------ Total, at cost 35,770 34,847 Less - Accumulated depreciation 23,848 22,289 - ------------------------------------------------------------------------ Net property, plant and equipment $11,922 $12,558 ========================================================================
NOTE 2 - LONG-TERM DEBT AND BORROWING ARRANGEMENTS In March 1996, the Company entered into an amended secured credit agreement (the "Agreement") with Mellon Bank, N.A. Under its terms, the Agreement provides for a commitment of $25 million through May 31, 1998. Under the Agreement, the commitment includes the sum of the principal amount of revolving credit borrowings outstanding and the aggregate face value of outstanding letters of credit. As of June 30, 1996, no borrowings were outstanding; however, letters of credit totaling $4.0 million were outstanding under the Agreement. NOTE 3 - EARNINGS PER SHARE Earnings per share computations are based upon weighted average shares of 8,410,851 and 8,363,552 for the three-month periods, and 8,404,064 and 8,363,552 for the six-month periods, ended June 30, 1996 and 1995, respectively. FORM 10-Q PART I PAGE 8 MICHAEL BAKER CORPORATION NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE PERIODS ENDED JUNE 30, 1996 (Unaudited) NOTE 3 - EARNINGS PER SHARE (Cont.) The Company's 1995 Stock Incentive Plan and 1996 Nonemployee Directors' Stock Incentive Plan had no significant impact on earnings per share for the three- month or six-month periods ended June 30, 1996 and 1995. NOTE 4 - 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 only significant proceeding relates to a lawsuit brought in 1987 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. FORM 10-Q PART I PAGE 9 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS TOTAL CONTRACT REVENUES Total contract revenues were $103.0 million for the second quarter of 1996, compared to $88.9 million for the second quarter of 1995, an increase of $14.1 million. The Civil business unit accounted for $8.1 million of this increase, while the Buildings, Energy and Transportation units each showed second quarter increases in the $1.8 to $2.1 million range. The increase in the Civil unit's revenue is primarily the result of its engineering division having generated second quarter revenues totaling $6.0 million on a significant contract in Mexico that was awarded during late 1995. Total contract revenues were $187.0 million for the first six months of 1996 compared to $175.5 million for the same period in 1995, an increase of $11.5 million. Inherent in this overall improvement are increases of $11.1 million and $5.1 million in the Civil and Transportation business units, respectively, offset by a decrease in the Buildings unit of $5.7 million. Again, Civil's increase relates primarily to work performed on its significant engineering contract in Mexico. Transportation's increase is attributable to its construction division which improved revenues through work performed on several new contracts. The reduction in the Buildings unit's revenues resulted primarily from the completion of Baker Support Services' military housing renovation business. GROSS PROFIT The Company's gross profit of $12.2 million for the second quarter of 1996 represents a 7% improvement over the gross profit of $11.4 million from its year ago second quarter. The most significant individual component of the improvement in gross profit emanated from the Energy business unit, wherein Baker/MO benefitted from profitable new business in its technical services division. As a percentage of total contract revenues, gross profit decreased to 11.9% in the second quarter of 1996 from 12.8% in the second quarter of 1995. While the Civil unit increased its gross profit in the second quarter of 1996, its gross profit expressed as a percentage of total contract revenues decreased slightly. This is again attributable to the aforementioned engineering contract in Mexico which has realized a lower margin to date than is normal for that division, due to the lower margins on its subcontracted components. FORM 10-Q PART I PAGE 10 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GROSS PROFIT (Cont.) Gross profit for the first six months of 1996 was $22.6 million versus $21.3 million for the first six months of 1995, representing a 6% increase. The major contributors to this increase included the Civil and Energy business units for the same reasons as mentioned in the preceding paragraph. As a percentage of total contract revenues, gross profit was 12.1% in both years' six-month periods. GENERAL AND ADMINISTRATIVE EXPENSES General and administrative ("G&A") expenses increased to $10.0 million for the second quarter of 1996 from $9.5 million in 1995's second quarter. This increase is partially attributable to higher marketing costs, particularly in the Civil, Buildings and Transportation business units, as a result of the hiring of several employees and the redirection of certain existing employees toward marketing the Company's integrated services. In addition, an asset acquisition which became effective January 1, 1996 also caused higher G&A expenses in the Transportation and Civil units during the second quarter of 1996. G&A expenses increased to $19.6 million for the first six months of 1996 from $18.5 million for the same period in 1995. This increase is attributable to the same reasons as provided in the preceding paragraph. INCOME TAXES The Company had a provision for income taxes of 46.0% and 50.6% for the second quarter, and 46.0% and 49.8% for the first six months, of 1996 and 1995, respectively. The 1996 provision rate decreases primarily reflect certain increases in estimated tax benefits on prior year expenditures, partially offset by an increase in foreign taxes. CONTRACT BACKLOG The funded backlog of work to be performed was $301 million as of June 30, 1996, compared to funded backlog of $300 million at December 31, 1995. 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. FORM 10-Q PART I PAGE 11 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS CONTRACT BACKLOG (Cont.) Total backlog, which incrementally includes that portion of contract value for which options are still to be exercised ("unfunded backlog"), was $528 million as of June 30, 1996 and $508 million as of December 31, 1995. Some of the more significant new projects added during the second quarter of 1996 were by the Civil business unit and included a $14.5 million project for multi-family housing maintenance at Patrick Air Force Base in Florida, a $12.5 million project for master planning services for the United States Army Corps of Engineers' Fort Worth District and an $11.5 million project for vehicle operations and maintenance services at Naval Station Mayport in Florida. The Transportation unit also added an $8 million contract to provide infrastructure construction services at a railyard site. LIQUIDITY AND CAPITAL RESOURCES Net cash used in operating activities was $8.5 million for the first six months of 1996, compared to net cash provided by operating activities of $2.7 million for the same period in 1995. The 1996 increase in cash used resulted primarily from higher receivables associated with several new projects, a number of existing projects and the overall higher volumes achieved during the second quarter. Net cash used in investing activities was $1.3 million for the first six months of 1996 compared to $2.0 million in the first six months of 1995. This amount solely comprises capital expenditures for both periods. Net cash used in financing activities was negligible for the first six months of 1996, as compared with net cash used in financing activities of $3.0 million for the first six months of 1995. The Company repaid most of its borrowed working capital under its revolving credit facility in the first half of 1995 and then totally repaid such borrowings later in the year. Working capital increased slightly during the first six months of 1996 to $27.0 million at June 30, 1996, from $25.2 million at December 31, 1995. The current ratio remained the same as of June 30, 1996 and December 31, 1995 at 1.36:1. In March 1996, the Company entered into an amended secured credit agreement with Mellon Bank, N.A. Under its terms, the agreement provides for a commitment of $25 million, which covers borrowings and letters of credit, FORM 10-Q PART I PAGE 12 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES (Cont.) through May 31, 1998. As of June 30, 1996, no borrowings were outstanding; however, letters of credit totaling $4.0 million were outstanding under the agreement. 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 of America. 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 financial terms under long-term contracts. The Company's short- and long-term liquidity will be affected by the improved but still narrow margins on construction work in backlog, and its ability to sustain profitable operations and to control costs during periods of lower volumes. 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 its funds generated from operations, its existing credit facility and its longer-term borrowing capabilities will be sufficient to meet its operating requirements for the foreseeable future. FORM 10-Q PART II PAGE 13 PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders --------------------------------------------------- (a) The Company's annual meeting of shareholders was held on May 13, 1996. (b) Each of management's nominees to the board of directors, as listed in the Company's proxy statement, was elected. There was no solicitation in opposition to management's nominees. (c) The first matter voted upon at the meeting was the election of the Company's directors to one-year terms or until their respective successors have been elected. The votes cast by holders of the Company's Common Stock and Series B Common Stock in approving the following directors were:
Name of Director Votes for Votes withheld ---------------- --------- -------------- Charles I. Homan 18,020,002 248,020 Thomas D. Larson 18,184,991 83,031 Richard L. Shaw 18,145,455 122,567 Konrad M. Weis 17,906,659 361,363 J. Robert White 18,075,025 192,997 William A. Wulf 17,441,829 826,193
The votes cast by holders of the Company's Common Stock in approving the following directors were:
Name of Director Votes for Votes withheld ---------------- --------- -------------- William J. Copeland 5,974,219 53,843 Roy V. Gavert, Jr. 5,980,977 47,085 Jack B. Hoey 5,981,326 46,736
The second and final matter voted upon at the meeting was the adoption of the 1996 Nonemployee Directors' Stock Incentive Plan, which will provide long-term incentive compensation to all nonemployee directors. The votes cast by holders of the Company's Common Stock and Series B Common Stock in approving such plan were 15,076,614 votes in favor, 2,746,847 votes against, and 444,561 abstentions. FORM 10-Q PART II PAGE 14 PART II. OTHER INFORMATION (Cont.) Item 6. Exhibits and Reports on Form 8-K -------------------------------- (b) Reports on Form 8-K During the quarter ended June 30, 1996, 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: August 12, 1996 By: /s/ J. Robert White ------------------------- Executive Vice President, Chief Financial Officer and Treasurer
EX-27 2
5 1000 6-MOS DEC-31-1996 JAN-01-1996 JUN-30-1996 4,473 0 66,421 0 22,302 102,130 0 0 124,754 75,157 0 0 0 8,397 41,200 124,754 187,015 187,015 164,395 164,395 0 0 46 3,341 1,537 1,804 0 0 0 1,804 .21 .21
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