-----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, U8clQZkLil8nLqnLuO4QhS2EPhCpsctb5ImEXsQt5qYEpbVyNZnZQj14q1Y10uYb Pfm/FetXrZxRfVBN42r/Eg== 0000009263-97-000006.txt : 19970514 0000009263-97-000006.hdr.sgml : 19970514 ACCESSION NUMBER: 0000009263-97-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970513 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: 97602301 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 March 31, 1997 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 March 31, 1997: Common Stock 6,850,421 shares Series B Common Stock 1,346,435 shares /TABLE 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 1996 financial statement amounts have been reclassified to conform with 1997 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 --------------------------- MARCH 31, 1997 March 31, 1996 ------------------------------------------------------------------------- (In thousands, except per share amounts) Total contract revenues $94,092 $84,019 Cost of work performed 83,216 73,613 ------------------------------------------------------------------------ Gross profit 10,876 10,406 General and administrative expenses 10,397 9,578 ------------------------------------------------------------------------ Income from operations 479 828 Other income/(expense): Interest expense (18) (31) Interest income 130 131 Other, net 518 20 ------------------------------------------------------------------------ Income before income taxes 1,109 948 Provision for income taxes 532 436 ------------------------------------------------------------------------ NET INCOME $577 $512 ======================================================================== NET INCOME PER SHARE $0.07 $0.06 ======================================================================== The accompanying notes are an integral part of this financial statement.
FORM 10-Q PART I PAGE 3 MICHAEL BAKER CORPORATION CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
ASSETS MARCH 31, 1997 Dec. 31, 1996 ----------------------------------------------------------------------------- (In thousands) CURRENT ASSETS Cash $13,847 $10,480 Receivables 61,331 69,621 Cost of contracts in progress and estimated earnings, less billings 17,339 16,276 Prepaid expenses and other 7,618 6,370 --------------------------------------------------------------------------- Total current assets 100,135 102,747 --------------------------------------------------------------------------- PROPERTY, PLANT AND EQUIPMENT, NET 11,775 12,265 OTHER ASSETS Goodwill and other intangible assets, net 7,028 7,242 Other assets 3,359 3,828 --------------------------------------------------------------------------- Total other assets 10,387 11,070 --------------------------------------------------------------------------- TOTAL ASSETS $122,297 $126,082 ============================================================================ LIABILITIES AND SHAREHOLDERS' INVESTMENT ---------------------------------------------------------------------------- CURRENT LIABILITIES Accounts payable $32,860 $34,960 Accrued employee compensation 6,069 6,596 Accrued insurance 5,810 5,425 Other accrued expenses 17,349 19,045 Excess of billings on contracts in progress over cost and estimated earnings 8,881 9,304 --------------------------------------------------------------------------- Total current liabilities 70,969 75,330 --------------------------------------------------------------------------- SHAREHOLDERS' INVESTMENT Common Stock, par value $1, authorized 44,000,000 shares, issued 7,057,981 and 7,055,784 shares at March 31, 1997 and December 31, 1996, respectively 7,058 7,056 Series B Common Stock, par value $1, authorized 6,000,000 shares, issued 1,346,435 and 1,348,632 shares at March 31, 1997 and December 31, 1996, respective 1,346 1,349 Additional paid-in capital 36,694 36,694 Retained earnings 7,490 6,913 Less 207,560 shrs of Common Stock in treas, at cost (1,260) (1,260) --------------------------------------------------------------------------- Total shareholders' investment 51,328 50,752 ---------------------------------------------------------------------------- TOTAL LIABILITIES AND SHAREHOLDERS' INVESTMENT $122,297 $126,082 ============================================================================ The accompanying notes are an integral part of this financial statement. /TABLE FORM 10-Q PART I PAGE 4 MICHAEL BAKER CORPORATION CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
For the three months ended -------------------------- MARCH 31, 1997 March 31, 1996 ---------------------------------------------------------------------------- (In thousands) CASH FLOWS FROM OPERATING ACTIVITIES Net income $577 $512 Adjustments to reconcile net income to net cash provided by/(used in) operating activities: Depreciation and amortization 1,083 1,160 Deferred income taxes 180 (47) Changes in assets and liabilities: Decrease/(increase) in receivables and contracts in progress 6,803 (927) Decrease in accounts payable and accrued expenses (3,938) (3,451) Increase in other net assets (932) (1,420) --------------------------------------------------------------------------- Total adjustments 3,196 (4,685) --------------------------------------------------------------------------- Net cash provided by/(used in) operating activities 3,773 (4,173) --------------------------------------------------------------------------- CASH FLOWS FROM INVESTING ACTIVITIES Additions to property, plant and equipment (406) (698) -------------------------------------------------------------------------- Net cash used in investing activities (406) (698) ---------------------------------------------------------------------------- CASH FLOWS FROM FINANCING ACTIVITIES Repayments of long-term debt 0 (12) --------------------------------------------------------------------------- Net cash used in financing activities 0 (12) --------------------------------------------------------------------------- Net increase/(decrease) in cash 3,367 (4,883) Cash at beginning of year 10,480 14,303 --------------------------------------------------------------------------- CASH AT END OF PERIOD $13,847 $9,420 =========================================================================== SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA Interest paid $15 $17 Income taxes paid $63 $31 =========================================================================== The accompanying notes are an integral part of this financial statement.
FORM 10-Q PART I PAGE 5 MICHAEL BAKER CORPORATION NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE PERIOD ENDED MARCH 31, 1997 (Unaudited) NOTE 1 - PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consists of the following (in thousands):
MARCH 31, 1997 Dec. 31, 1996 -------------- ------------- Land $ 693 $ 693 Buildings and improvements 6,353 6,345 Equipment and vehicles 31,110 30,873 ------------------------------------------------------------------------ Total, at cost 38,156 37,911 Less - Accumulated depreciation (26,381) (25,646) ------------------------------------------------------------------------ Net property, plant and equipment $11,775 $12,265 ========================================================================
NOTE 2 - GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill and other intangible assets consist of the following (in thousands):
MARCH 31, 1997 Dec. 31, 1996 -------------- -------------- Goodwill, net of accumulated amortization of of $2,095,000 and $2,005,000, respectively $5,208 $5,297 Other intangible assets, net of accumulated amortization of $1,440,000 and $2,157,000, respectively 1,820 1,945 - ------------------------------------------------------------------------- Net intangible assets $7,028 $7,242 ========================================================================
FORM 10-Q PART I PAGE 6 MICHAEL BAKER CORPORATION NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE PERIOD ENDED MARCH 31, 1997 (Unaudited) NOTE 3 - 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. (the "Bank"). 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 loans outstanding and the aggregate face value of outstanding letters of credit. As of March 31, 1997, no loans were outstanding; however, letters of credit totaling $5,713,000 were outstanding under the Agreement. In March 1997, the Company agreed with the Bank to revised and improved terms of its Agreement, under which the $25 million commitment will be extended through May 31, 2000. Other significant terms that have already been agreed between the parties include the release of all security in Company assets held under the Agreement, a reduction in the borrowing rate to the Bank's prime interest rate or other indexed rates that may be lower, and a reduction in the commitment fees to 3/8% per year based on the unused portion of the commitment. The revised Agreement is expected to be signed during the second quarter of 1997. NOTE 4 - EARNINGS PER SHARE Earnings per share computations are based upon weighted averages of 8,255,310 and 8,397,277 shares outstanding for the three-month periods ended March 31, 1997 and 1996, respectively. FORM 10-Q PART I PAGE 7 MICHAEL BAKER CORPORATION NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE PERIOD ENDED MARCH 31, 1997 (Unaudited) NOTE 5 - 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 $13,000,000. 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 8 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS TOTAL CONTRACT REVENUES Total contract revenues were $94.1 million for the first quarter of 1997, compared to $84.0 million for the same period in 1996, an increase of $10.1 million. With the exception of the Environmental unit, total contract revenues increased for the first quarter of 1997 in all business units. The Civil and Energy units had the greatest increases of $5.5 million and $3.7 million, respectively. Civil's increase resulted from higher 1997 revenues on its significant engineering project in Mexico and from new operations & maintenance ("O&M") contracts on which work commenced during the fourth quarter of 1996. Energy's improvement is primarily attributable to new O&M contracts which were added during the second and third quarters of 1996. GROSS PROFIT In absolute terms, the Company's gross profit of $10.9 million for the first quarter of 1997 represents a small improvement over the gross profit of $10.4 million from its 1996 first quarter. As a percentage of total contract revenues, however, gross profit decreased to 11.6% in the first quarter of 1997 from 12.4% in the first quarter of 1996. Each of the Company's business units experienced slight decreases in its gross profit percentage. Despite higher 1997 revenues and profitability on its engineering contract in Mexico and on its O&M contracts, the Civil unit's profit percentage decreased due to lower margins achieved on its remaining mix of engineering work. In the Transportation unit, revenues improved by an insignificant amount, while its gross profit declined by 10% due mainly to the recognition of revenue but no profit on a now-completed loss construction contract. GENERAL AND ADMINISTRATIVE EXPENSES General and administrative ("G&A") expenses increased to $10.4 million for the first quarter of 1997 from $9.6 million in the prior year first quarter. This 1997 increase in G&A expenses primarily reflects the general increase in revenue volumes. Expressed as a percentage of total contract revenues, G&A expenses decreased from 11.4% in the first quarter of 1996 to 11.0% in 1997. FORM 10-Q PART I PAGE 9 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OTHER INCOME Other income for the first quarter of 1997 included a gain of $0.5 million from the sale of an investment in preferred stock. INCOME TAXES The Company had provisions for income taxes of 48% for the first quarter of 1997 and 46% for the same period in 1996. The higher 1997 provision rate reflects expected increases in foreign income and withholding taxes. NEW ACCOUNTING STANDARD In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS 128"), which changes the computation and presentation of earnings per share ("EPS"). SFAS 128 must be adopted for interim and annual periods ending after December 15, 1997. Early adoption is prohibited, although previously reported EPS amounts will have to be restated upon adoption. The Company will adopt SFAS 128 in the fourth quarter of 1997. Based upon management's computations, adoption of the new standard will not have a material effect on previously reported EPS amounts for the first quarter of 1997 and all of 1996. CONTRACT BACKLOG The funded backlog of work to be performed was $320 million as of March 31, 1997, compared to funded backlog of $333 million at December 31, 1996. 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 incrementally includes that portion of contract value for which options are still to be exercised ("unfunded backlog"), was $528 million as of March 31, 1997 and $544 million as of December 31, 1996. During the first quarter of 1997, the Company's Transportation unit added to its funded backlog, while the Environmental and Energy units replaced their first quarter revenues with new funded work. The Civil and Buildings units did not replace their revenues with new work, thereby resulting in reductions in their funded backlog amounts. FORM 10-Q PART I PAGE 10 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES Net cash provided by operating activities was $3.8 million for the first three months of 1997, compared to net cash used in operating activities of $4.2 million for the same period in 1996. The 1997 increase in cash provided resulted from higher collections of receivables during the first quarter of 1997. Net cash used in investing activities approximated $0.4 million for the first three months of 1997 compared to $0.7 million in the first three months of 1996. These amounts solely comprise purchases of property, plant and equipment for both periods. Working capital increased marginally during the first three months of 1997 to $29.2 million at March 31, 1997, from $27.4 million at December 31, 1996. The current ratio was 1.41:1 at the end of the first three months of 1997, compared to 1.36:1 at year-end 1996. In March 1997, the Company agreed with Mellon Bank, N.A. to revised and improved terms under its credit agreement. Under the revised terms, the commitment of $25 million, which covers loans and letters of credit, will be extended through May 31, 2000, and the bank will release all security in Company assets previously held. As of March 31, 1997, no loans were outstanding; however, letters of credit totaling $5.7 million were outstanding under the agreement. Management believes that the credit agreement will be adequate to meet its borrowing and letter of credit requirements for at least the next year. 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 at least the next year. Short and long-term liquidity is dependent upon appropriations of public funds for infrastructure and other government-funded projects, capital spending levels in the private sector, and the demand for the Company's services in the oil and gas markets. 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 and its existing credit facility will be sufficient to meet its operating and capital expenditure requirements for at least the next year. FORM 10-Q PART II PAGE 11 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K -------------------------------- (b) Reports on Form 8-K During the quarter ended March 31, 1997, 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: May 13, 1997 By: /s/ J. Robert White ---------------------- J. Robert White Executive Vice President, Chief Financial Officer and Treasurer
EX-27 2
5 1000 3-MOS DEC-31-1997 MAR-31-1997 13,847 0 61,331 0 17,339 100,135 0 0 122,297 70,969 0 0 0 8,197 36,694 122,297 94,092 94,092 83,216 83,216 0 0 18 1,109 532 577 0 0 0 577 .07 .07
-----END PRIVACY-ENHANCED MESSAGE-----