-----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, VwTOXfcYZQg65NoMGrs5S3/Qq6ImG40XuvFsOBIJRh4UoYx6xoA1tP8RU7PVL4GW KgquNzx7Ji2EUFre82YZWQ== 0000950144-97-005479.txt : 19970513 0000950144-97-005479.hdr.sgml : 19970513 ACCESSION NUMBER: 0000950144-97-005479 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970330 FILED AS OF DATE: 19970512 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: HEIST C H CORP CENTRAL INDEX KEY: 0000046653 STANDARD INDUSTRIAL CLASSIFICATION: CONSTRUCTION SPECIAL TRADE CONTRACTORS [1700] IRS NUMBER: 160803301 STATE OF INCORPORATION: NY FISCAL YEAR END: 1229 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10893 FILM NUMBER: 97600911 BUSINESS ADDRESS: STREET 1: 810 NORTH BELCHER ROAD CITY: CLEARWATER STATE: FL ZIP: 34625 BUSINESS PHONE: 8134615656 MAIL ADDRESS: STREET 1: 45 ANDERSON ROAD CITY: BUFFALO STATE: NY ZIP: 14225 10-Q 1 C.H. HEIST, CORP. FORM 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 [x] Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarter period ended March 30, 1997. [ ] Transition Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934. Commission file number 0-7907 C.H. Heist Corp. ---------------- (Exact name of registrant as specified in its charter) New York 16-0803301 -------- ---------- (State of other jurisdiction of (I.R.S. Employer incorporation or organization Identification Number) 810 North Belcher Road Clearwater, Florida 34625 ------------------- ------ (Address of principal executive offices) (Zip Code) 813-461-5656 ------------ (Registrant's telephone number, including area code) (Former name, former address and former fiscal year, if changed since last report) 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 - April 18, 1997. Common stock, $.05 par value 2,876,873 ---------------------------- --------- (Class) (Outstanding shares) 1 2 C.H. HEIST CORP. AND SUBSIDIARIES Index Part I Financial Information Condensed Consolidated Balance Sheets- March 30, 1997 and December 29, 1996 3 Condensed Consolidated Statements of Operations- thirteen-week periods ended March 30, 1997 and March 31, 1996 4 Condensed Consolidated Statements of Cash Flows- thirteen-week periods ended March 30, 1997 and March 31, 1996 5 Notes to Condensed Consolidated Financial Statements 6 Independent Auditors' Review Report 7 Management's Discussion and Analysis of Results of Operations and Financial Condition 8-9 Part II Other Information 10 Signatures 11
* * * * * 2 3 PART I-FINANCIAL INFORMATION C.H. HEIST CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
March 30 December 29 Assets 1997 1996 ------ ---- ---- (Unaudited) Current assets: Cash and cash equivalents $ 1,591,433 2,691,908 Receivables 14,022,563 14,533,685 Services in progress 1,071,011 1,117,235 Income taxes receivable 519,937 - Parts and supplies 1,559,629 1,604,470 Prepaid expenses 1,243,881 324,114 Deferred income taxes 1,010,219 1,010,376 ------------- ------------- Total current assets 21,018,673 21,281,788 ------------- ------------- Property, plant and equipment, at cost 50,835,204 49,635,229 Less accumulated depreciation 33,158,012 32,229,168 ------------- ------------- Net property, plant and equipment 17,677,192 17,406,061 ------------- ------------- Deferred income taxes 139,994 141,367 Other assets 1,678,668 2,073,881 ------------- ------------- $ 40,514,527 40,903,097 ============= ============= Liabilities and Stockholders' Equity ------------------------------------ Current liabilities: Current installments of long-term debt $ 537,667 537,667 Accounts payable 1,624,566 1,579,775 Accrued expenses 4,710,776 4,470,646 Income taxes payable - 197,753 ------------- ------------- Total current liabilities 6,873,009 6,785,841 Long-term debt, excluding current installments 6,932,974 6,492,390 Deferred income taxes 551,285 551,285 ------------- ------------- Total liabilities 14,357,268 13,829,516 ------------- ------------- Stockholders' equity (note 3): Common stock of $.05 par value. Authorized 8,000,000 shares; issued 3,167,092 shares 158,355 158,355 Additional paid-in capital 4,274,057 4,267,798 Retained earnings 24,140,609 24,984,062 Equity adjustment from foreign currency translation (1,173,275) (1,084,731) ------------- ------------- 27,399,746 28,325,484 Less cost of common stock in treasury: 290,219 and 292,419 shares for 1997 and 1996, respectively (1,242,487) (1,251,903) ------------- ------------- Total stockholders' equity 26,157,259 27,073,581 ------------- ------------- $ 40,514,527 40,903,097 ============= =============
See accompanying notes to condensed consolidated financial statements. 3 4 C.H. HEIST CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Thirteen- Thirteen- week week period period ended ended March 30 March 31 1997 1996 ------------- ----------- Net Sales $24,960,983 25,769,004 Cost of sales 22,261,371 22,508,737 ----------- ----------- Gross profit 2,699,612 3,260,267 Selling, general and administrative 3,464,401 3,331,314 ----------- ----------- Operating (loss) (764,789) (71,047) ----------- ----------- Other income (expense): Interest income 11,274 13,535 Interest expense (122,449) (80,427) Gain on disposal of property, plant and equipment, net 3,137 62,409 Amortization of other assets (35,945) (31,007) Miscellaneous (303,769) 5,551 ----------- ----------- Total other income (expense) net (447,752) (29,939) ----------- ----------- (Loss) before income taxes (1,212,541) (100,986) Income tax benefit 369,088 39,086 ----------- ----------- Net (loss) $ (843,453) (61,900) =========== =========== Net (loss) per share $ (.29) (.02) =========== =========== Weighted average number of common shares outstanding 2,875,519 2,872,773 =========== ===========
See accompanying notes to condensed consolidated financial statements. 4 5 C. H. HEIST CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Thirteen- Thirteen- week week period period ended ended March 30 March 31 1997 1996 ------------- ------------- Cash flows from operating activities: Net Loss $ (843,453) (61,900) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation of plant and equipment 1,268,853 1,195,284 Amortization of other assets 35,945 31,007 Gain on disposal of property, plant and equipment, net (3,137) (62,409) Deferred income taxes - - Changes in assets and liabilities (see below) (420,602) (551,673) ------------ ------------ Net cash provided by operating activities 37,606 550,309 ------------ ------------ Cash flows from investing activities: Additions to property, plant and equipment (1,682,449) (620,302) Proceeds from disposal of property, plant and equipment 99,197 116,541 ------------ ------------ Net cash used in investing activities (1,583,252) (503,761) ------------ ------------ Cash flows from financing activities: Proceeds from bank line of credit borrowing 1,300,000 2,700,000 Repayment on bank line of credit borrowing (850,000) (1,900,000) Repayment of other long-term debt (9,416) (6,278) Proceeds from reissuance of treasury shares 15,675 - ------------ ------------ Net cash provided by financing activities 456,259 793,722 ------------ ------------ Effect of exchange rate changes on cash and cash equivalents (11,088) 10,055 ------------ ------------ Net (decrease) increase in cash and cash equivalents (1,100,475) 850,325 Cash and cash equivalents at beginning of period 2,691,908 3,040,815 ------------ ------------ Cash and cash equivalents at end of period $ 1,591,433 3,891,140 ============ =========== Changes in assets and liabilities providing (using) cash: Receivables $ 478,373 562,152 Services in progress 45,928 (994,711) Income taxes receivable (519,937) (8,904) Parts and supplies 43,361 (33,879) Prepaid expenses (924,038) (755,861) Accounts payable 49,677 1,446,136 Accrued expenses 245,000 (211,345) Income taxes payable (198,356) (544,135) Other assets 359,390 (11,126) ------------ ------------ Total $ (420,602) (551,673) ============ ============
See accompanying notes to condensed consolidated financial statements 5 6 C. H. HEIST CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. In the opinion of Management, the accompanying condensed consolidated financial statements contain all adjustments necessary (consisting of normal recurring items) to present a fair statement of consolidated financial position as of March 30, 1997, and the results of operations and cash flows for the thirteen-week period ended March 30, 1997 and the thirteen-week period ended March 31, 1996. These condensed consolidated financial statements should be read in conjunction with the Company's Audited Consolidated Financial Statements for 1996 and the notes thereto. The Company's fiscal year ends on the last Sunday of December. For fiscal 1996, the Company's operations included 52 weeks. Therefore, the period ended March 30, 1996 includes thirteen weeks. The first quarter of 1997 (a 52 week year) includes thirteen weeks. 2. The results of operations for the thirteen-week period ended March 30, 1997 and the thirteen-week period ended March 31, 1996 are not necessarily indicative of the results to be expected for the full year. 3. The changes in stockholders' equity for the thirteen-week period ended March 30, 1997 are summarized as follows:
Equity adjustment Additional from foreign Treasury Stock Total Common paid-in Retained currency ------------------- stockholders' stock capital earnings translation Shares Amount equity ----- ------- -------- ----------- ------ ------ ------ Balance at December 29, 1996 $158,355 $4,267,798 $24,984,062 $(1,084,731) 292,419 $(1,251,903) $27,073,581 Net Loss - - (843,453) - - - (843,453) Foreign currency - - - - - - translation adjustment (88,544) - - (88,544) Reissue Treasury Stock - 6,259 - - (2,200) 9,416 15,675 -------- ---------- ----------- ----------- ------- ----------- ----------- Balance at March 30, 1997 $158,355 $4,274,057 $24,140,609 $(1,173,275) 290,219 $(1,242,487) $26,157,259 ======== =========== =========== =========== ======= =========== ===========
4. During the quarter ended March 30, 1997, 33,583 additional stock options were issued and none have expired. As of March 30, 1997 and December 29, 1996, the Company had exercisable options outstanding to employees to purchase 182,389 common shares, at prices ranging from $6.94 to $11.14 per share. 6 7 Independent Auditors' Review Report The Board of Directors and Stockholders C.H. Heist Corp: We have reviewed the condensed consolidated balance sheet of C.H. Heist Corp. and subsidiaries as of March 30, 1997, and the related condensed consolidated statements of operations and cash flows for the thirteen-week periods ended March 30, 1997 and March 31, 1996. These condensed consolidated financial statements are 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 inquires 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 condensed consolidated financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of C.H. Heist Corp. and subsidiaries as of December 29, 1996, and the related consolidated statements of operations, stockholders' equity and cash flows for the year ended (not presented herein); and in our report dated February 14, 1997, 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 29, 1996, is fairly presented, in all material respects, in relation to the consolidated balance sheet from which it has been derived. KPMG Peat Marwick LLP Buffalo, New York April 28, 1997 7 8 MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS AND FINANCIAL CONDITIONS Results of Operations Sales decreased by $808,000 or 3.1% during the current fiscal quarter compared to the same fiscal quarter one year ago. Sales in the industrial maintenance segment declined by $3.2 million or 21.6%. This decline was primarily attributable to the lack of major plant cleanup work during the current fiscal quarter compared to the prior period. Sales in the temporary staffing segment increased $2.4 million or 21.5%. These increases were the result of contributions from offices opened after the first quarter of the prior fiscal year and during the current fiscal quarter, greater market penetration from established offices in the Midwest and in the Mid Atlantic region and sales of information technology staffing generated by the Tech Resource Group which was acquired in September 1996. Gross profit decreased by $561,000 or 17.2% and as a percentage of sales from 12.7% to 10.8% for the current fiscal quarter compared to the same period one year ago. Gross profit decreased in the industrial maintenance segment primarily as a result of increases in non-billable time associated with safety training of the field workforce, guaranteed weekly minimum hours to key field personnel to promote stability in the workforce and the addition of management staff in selected markets. The decrease in gross profit as a percent of sales for the temporary staffing segment was due to costs associated with new office openings including the Tech Resource group which was formed after the acquisition of Tech Resource, Inc., in September 1996. Interest expense increased during the current fiscal quarter compared to the same period one year ago. Higher interest rates on the Company's revolving line of credit and interest expense accrued on the promissory note issued in conjunction with the acquisition of certain assets of Tech Resources, Inc. in September 1996 caused this increase. Legal, accounting and travel costs, deferred in fiscal 1996, associated with the preparation of documents for the spin-off and initial public offering of Ablest Service Corp., were written off due to a delay in the timing of the initial public offering in 1997. Management of the Company anticipates that the spin-off will occur later in the current fiscal year with a public offering of additional shares during fiscal 1998. The effective tax rate for the current fiscal quarter is a benefit of 30.4%. The lower than normal effective benefit rate is due to the tax benefit of operating losses in the industrial maintenance segment being not fully realizable for state tax purposes. Financial Condition The quick ratio was 2.6 to 1 as of March 30, 1997 compared to 2.8 to 1 as of December 29, 1996. The current ratio was 3.1 as of March 30, 1997 and December 29, 1996. Net working capital decreased by $350,000, primarily due to a $1.1 million reduction in cash and cash equivalents and $500,000 reduction in accounts receivable. These decreases were partially offset by an increase in prepaid expenses of $920,000 which represents the balance remaining on renewal of the Company's insurance program at the beginning of the fiscal year, as well as increases in income taxes receivable and accrued expenses. Reference should be made to the cash flow statement which details the sources and uses of cash. 8 9 MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS AND FINANCIAL CONDITION, Continued Open credit commitments as of March 30, 1997 were $3.1 million for C.H. Heist Corp., and $5.0 million for Ablest Service Corp. The Company also has $362,000 (the U.S. dollar equivalent) available for C. H. Heist Ltd., the Company's Canadian subsidiary. Capital expenditures for the current fiscal quarter were approximately $1.7 million. Of this amount; $759,000 was for additions to the mobile equipment fleet, $319,000 was for computer equipment of which $257,000 was for an office automation system for Ablest, $147,000 for computerized machining equipment for the Company's Methods and Development facility with the balance for other equipment and facilities. Open credit commitments at March 30, 1997 were $290,000, $270,000 of which was for additions to the mobile equipment fleet and the remainder for other equipment. Recent Development In a press release dated April 28, 1997, the Company announced that Ablest Service Corp., the Company's temporary staffing subsidiary, acquired certain assets of Atlanta based Solution Source, Inc. Solution Source is an Information Technology staffing provider with 1996 annualized sales of approximately $3.2 million. It will be combined with Ablest's Tech Resource Group, which was formed after the September 1996 acquisition of Atlanta based Tech Resource, Inc. 9 10 Part II-Other Information Item 6 Exhibits and Reports on Form 8-K (A) Reports on Form 8-K: No reports on Form 8-K have been filed during the quarter ended March 30, 1997. Exhibit 27 Financial Data Schedule (for SEC use only) 10 11 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. C.H. Heist Corp. (Registrant) Date May 7, 1997 /s/ Mark P. Kashmanian ------------------------------ Mark P. Kashmanian Chief Accounting Officer 11 EX-27 2 FINANCIAL DATA SCHEDULE (FOR SEC USE ONLY)
5 3-MOS DEC-28-1997 DEC-30-1996 MAR-30-1997 1,591,433 0 14,022,563 0 1,559,629 21,018,673 50,835,204 33,158,012 40,514,527 6,873,009 6,932,974 0 0 158,355 25,998,904 40,514,527 24,960,983 24,960,983 22,261,371 22,261,371 3,464,401 0 122,449 (1,212,541) (369,088) (843,453) 0 0 0 (843,453) (.29) (.29)
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