-----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, L5Rnvdg/DLoZ1sr71wp0+rBN7ENldl2DQLbuznj+IzOP8wUkrZ4LKTi8BmwdLkRW sAvs0It8RLmR5ksUwaplEQ== 0000950144-96-005017.txt : 19960812 0000950144-96-005017.hdr.sgml : 19960812 ACCESSION NUMBER: 0000950144-96-005017 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960809 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: 96606751 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 C.H. HEIST CORP. AND SUBSIDIARIES 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 June 30, 1996 2 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form l0-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 June 30, 1996. [ ] 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 or other jurisdiction of (I.R.S. Employer Identification Number) incorporation or organization) 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 - August 2, 1996. Common stock, $.05 par value 2,872,773 ---------------------------- --------- (Class) (Outstanding shares) 1 3 C. H. HEIST CORP. AND SUBSIDIARIES Index Part I Financial Information Condensed Consolidated Balance Sheets - June 30, 1996 (unaudited) and December 31, 1995 3 Condensed Consolidated Statements of Earnings - (unaudited) thirteen week periods ended June 30, 1996 and July 2, 1995 and twenty-six week period ended June 30, 1996 and the twenty-seven week period ended July 2, 1995 4 Condensed Consolidated Statements of Cash Flows - (unaudited) twenty-six week period ended June 30, 1996 and the twenty-seven week period ended July 2, 1995 5 Notes to Condensed Consolidated Financial Statements 6 Independent Auditors' Review Report 7 Management's Discussion and Analysis of the Results of Operations and the Financial Condition 8-9 Part II Other Information 10 Signatures 11
* * * * * 2 4 Part I-Financial Information C. H. HEIST CORP. AND SUBSIDIARIES Condensed Consolidated Balance Sheets
June 30 December 31 Assets 1996 1995 ---- ---- (Unaudited) Current assets: Cash and cash equivalents $1,507,138 3,040.815 Receivables 14,433,571 14,283,008 Services in progress 2,158,610 990,729 Income taxes receivable 335,096 - Parts and supplies 2,167,150 2,170,572 Prepaid expenses 700,734 187,647 Deferred income taxes 834,489 834,417 ----------- ---------- Total current assets $22,136,788 21,507,188 ----------- ---------- Property, plant and equipment, at cost 48,464,337 47,355,312 Less accumulated depreciation 30,730,623 29,712,818 ----------- ---------- Net property, plant and equipment 17,733,714 17,642,494 Deferred income taxes 131,922 131,922 Other assets 215,988 265,916 ----------- ---------- Total Assets $40,218,412 39,547,520 =========== ========== Liabilities and Stockholders' Equity Current liabilities: Current installments of long-term debt $ 37,667 37,667 Accounts payable 1,501,874 1,306,819 Accrued expenses 4,052,288 3,879,265 Income taxes payable - 545,675 ----------- ---------- Total current liabilities 5,591,829 5,769,426 Long-term debt, excluding current installments 8,361,224 6,980,057 Deferred income taxes 430,286 430,286 ----------- ---------- Total liabilities 14,383,339 13,179,769 ----------- ---------- Stockholders' equity (note 3): Common stock of $.05 par value. Authorized 8,000,000 shares; issued 3,165,192 shares for 1996 and 1995. 158,260 158,260 Additional paid-in capital 4,253,689 4,253,689 Retained earnings 23,780,710 24,293,966 Equity adjustment from foreign currency translation (1,105,683) (1,086,261) ----------- ---------- 27,086,976 27,619,654 Less cost of common stock in treasury - 292,419 shares (1,251,903) (1,251,903) ----------- ---------- Total stockholders' equity 25,835,073 26,367,751 ----------- ---------- Total liabilities and stockholder's equity $40,218,412 39,547,520 =========== ==========
See accompanying notes to condensed consolidated financial statements. 3 5 C. H. HEIST CORP. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (Unaudited)
Thirteen- Thirteen- Twenty-six Twenty-seven week week week week period period period period ended ended ended ended June 30 July 2 June 30 July 2 1996 1995 1996 1995 ---- ---- ---- ---- Net sales $ 25,781,333 25,301,132 51,550,337 49,845,018 Cost of sales 22,466,873 21,376,244 44,975,610 43,121,060 ---------- ---------- ---------- ---------- Gross profit 3,314,460 3,924, 888 6,574,727 6,723,958 Selling, general and administrative expenses 3,603,088 2,851,392 6,934,402 6,133,660 ---------- ---------- ---------- --------- Operating income (loss) (288,628) 1,073,496 (359,675) 590,298 ---------- ---------- ---------- --------- Other income (expense): Interest income 23,872 38,887 37,407 71,120 Interest expense (217,047) (129,550) (297,474) (240,883) Gain (loss) on disposal of property, plant and equipment, net 20,752 18,710 83,161 (36,116) Amortization of other assets (31,007) (32,807) (62,014) (62,014) Miscellaneous, net (7,916) 4,593 (2,365) 5,991 ---------- ---------- ---------- ---------- Total other expense, net (211,346) (100,167) (241,285) (189,670) ---------- --------- ---------- ---------- Earnings (loss) before income taxes (499,974) 973,329 (600,960) 400,628 Income tax expense (benefit) (48,618) 550,868 (87,704) 325,796 ---------- --------- ---------- ---------- Net earnings (loss) $ (451,356) 422,461 (513,256) 74,832 ========== ========= ========== ========== Net earnings (loss) per share $ (.16) .15 (.18) .03 ========== ========= ========== ========== Weighted average number of common shares outstanding 2,872,773 2,871,427 2,872,773 2,870,850 ========== ========= ========== ==========
See accompanying notes to condensed consolidated financial statements. 4 6 C. H. HEIST CORP. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (Unaudited)
Twenty-six Twenty-seven week period week period ended ended June 30 July 2 1996 1995 ---- ---- Cash flows from operating activities: Net earnings (loss) $ (513,256) 74,832 Adjustments to reconcile net earnings (loss) to net cash provided (used) by operating activities: Depreciation of plant and equipment 2,436,778 1,935,932 Amortization of other assets 62,014 62,014 Gain on disposal of property, plant and equipment, net (83,161) (36,116) Deferred income taxes - 19,265 Changes in assets and liabilities (see below) (2,374,068) (763,950) ----------- ---------- Net cash provided (used) by operating activities (471,693) 1,291,977 ----------- ---------- Cash flows from investing activities: Additions to property, plant and equipment (2,657,861) (3,632,509) Proceeds from disposal of property, plant and equipment 215,644 178,165 ------------ ---------- Net cash used in investing activities (2,442,217) (3,454,344) ----------- ---------- Cash flows from financing activities: Proceeds from bank line of credit borrowings 5,600,000 4,950,000 Repayments on bank line of credit borrowings (4,200,000) (2,450,000) Repayment of other long-term debt (18,833) (21,972) Exercised stock options - 18,125 ----------- ---------- Net cash provided by financing activities 1,381,167 2,496,153 ----------- ---------- Effect of exchange rate changes on cash and cash equivalents (934) 37,197 ----------- ---------- Net increase (decrease) in cash and cash equivalents (1,533,677) 370,983 Cash and cash equivalents at beginning of period 3,040,815 1,533,015 ----------- ---------- Cash and cash equivalents at end of period $ 1,507,138 1,903,998 =========== ========== Changes in assets and liabilities providing (using) cash: Receivables $ (149,160) 1,085,319 Services in progress (1,166,255) (693,197) Income taxes receivable (355,096) - Parts and supplies 3,578 (60,329) Prepaid expenses (512,740) (610,218) Other assets (12,175) 72,494 Accounts payable 170,084 106,909 Accrued expenses 172,997 (368,109) Income taxes payable (545,301) (296,819) ----------- ---------- Total $(2,374,068) (763,950) =========== ==========
See accompanying notes to condensed consolidated financial statements. 5 7 C. H. HEIST CORP. AND SUBSIDIARIES Notes to Condensed consolidated financial statements (Unaudited) 1. In the opinion of the management of C.H. Heist Corp. and Subsidiaries (the Company), the accompanying condensed consolidated financial statements contain all normal recurring adjustments necessary to fairly present the Company's consolidated financial positions as of June 30, 1996 and December 31, 1995, and the results of its operations and cash flows for the thirteen and twenty-six week periods ended June 30, 1996 and the thirteen and twenty-seven week periods ended July 2, 1995. The Company's fiscal year ends on the last Sunday of December. For fiscal 1995, the Company's earnings include 53 weeks. Therefore, the period ended June 30, 1996 includes twenty-six weeks while the period ended July 2, 1995 includes twenty-seven weeks. 2. The results of operations for the thirteen and twenty-six week periods ended June 30, 1996 are not necessarily indicative of the results to be expected for the full year. 3. The changes in stockholders' equity for the twenty-six week period ended June 30, 1996 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 31, 1995 $ 158,260 4,253,689 24,293,966 $(1,086,261) 292,419 $(1,251,903) $26,367,751 Net earnings (loss) - - (513,256) - - - (513,256) Exercised options - - - - - - - Foreign currency translation adjustment - - - (19,422) - - (19,422) --------- --------- ---------- ------------ ------- ----------- ----------- Balance at June 30, 1996 $ 158,260 4,253,689 23,780,710 $(1,105,683) 292,419 $(1,251,903) $25,835,073 ========= ========= ========== =========== ======= =========== ===========
4. During the quarter ended June 30, 1996, no additional stock options were issued, while 3,630 options expired. As of June 30, 1996 and December 31, 1995, the Company had exercisable options outstanding to employees to purchase 186,070, and 189,700 common shares respectively at prices ranging from $6.94 to $11.14 per share. 6 8 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 June 30, 1996, and the related condensed consolidated statements of operations and cash flows for the thirteen and twenty-six week periods ended June 30, 1996 and the thirteen and twenty-seven week periods ended July 2, 1995. 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 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 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 31, 1995, and the related consolidated statements of earnings, stockholders' equity and cash flows for the year then ended (not presented herein); and in our report dated February 16, 1996, 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, 1995, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. KPMG Peat Marwick LLP Buffalo, New York July 26, 1996 7 9 MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS AND THE FINANCIAL CONDITIONS Results of Operations Net sales increased during the current fiscal quarter by $480,000 or 1.9% and for the fiscal year to date period by $1,705,000 or 3.4%. Sales in the industrial maintenance segment decreased for the fiscal quarter by $941,000 or 6.3% but still show an increase for the fiscal year to date period of $274,000 or 1.0%. Sales in the temporary staffing segment increased by $1,421,000 or 12.1% and $1,431,000 or 6.3% during the current fiscal quarter and year to date period, respectively. Sales in the industrial maintenance segment were down during the current fiscal quarter partially due to the continued impact of the loss of an insulation contract, which was not offset by increases in equipment related work as was the case in the first quarter, and partially due to a decline in painting services in both the U.S. and Canada. The decline in Canada is due to a late start on bridge work due to the particularly harsh winter and wet spring, while the decline in the U.S. is primarily due to customers holding off from maintenance painting projects until later in the year. Management expects sales in these areas to increase over the next quarter.The increase in temporary staffing was due to the development of new branches that opened during the previous fiscal year and earlier in the current fiscal year, as well as increased market penetration in a number of the companies existing locations. Gross profit declined by $610,000 for the current fiscal quarter and $149,000 for the fiscal year to date period, compared to one year ago. Gross profit as a percent of sales decreased from 15.5% to 12.9% and from 13.5% to 12.8% during the current fiscal quarter and fiscal year to date periods, respectively. The decreases in gross profit for the current fiscal quarter and year to date periods were partially due to losses incurred in operations at the company's Heist Field Services Division. Changes made to this division over the past year have not had the anticipated results. Additional actions to improve operations and cost efficiencies to the division have been made. Management does not expect to see the impact of these actions earlier then the end of the third quarter. Unless these actions have a material impact upon the operations of this division, significant losses may be incurred by the division through the balance of this fiscal year. An additional decrease in gross profit occurred from increased expenditures on the repairs and maintenance of equipment and from an increase in non-billable time being incurred by the industrial maintenance division, which guarantees key field employees a minimum number of hours or pay each week in order to promote stability and reinforce safety in the workforce. These declines were partially offset by a strong performance in the temporary staffing segment which increased its gross profit from 14.4% to 16.8% and from l5.5% to l7.2% during the current fiscal quarter and year to date periods, respectively. Selling, general and administrative expenses increased by $752,000 for the fiscal quarter and $801,000 for the year to date period. A significate portion of the increase is due to costs associated with the upgrade of information systems and hardware that were added during the last fiscal year and continue to be developed, implemented and maintained. Other expense net, increased during the current fiscal quarter by $111,000 or 111% and by $52,000 or 27.2% for the current fiscal year to date period, compared to one year ago. This was due to an increase in interest expense of $87,000 and $57,000 for the fiscal quarter and year to date period, respectively, as the company incurred a higher level of borrowing during the current fiscal quarter. Interest income declined by $15,000 and $34,000 for the fiscal quarter and year to date periods, respectively, due to lower cash investments by the company's Canadian subsidiary. 8 10 MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS AND THE FINANCIAL CONDITION, CONTINUED The effective tax rate for the current fiscal quarter is a benefit of 9.7% and for the fiscal year to date period is a benefit of 14.6%. The full tax benefit of the operating losses are offset by state taxes, which are due even when losses are incurred. Financial Condition The quick ratio is 3.7 to 1 as of June 30, 1996 compared to 3.2 to 1 as of December 31, 1995. The current ratio is 4.0 to 1 as of June 30, 1996 compared to 3.7 to 1 as of December 31, 1995. Working capital decreased by $599,000 during the current fiscal quarter. The decrease in working capital was primarily due to a decrease in cash and cash equivalents resulting from the loss sustained in the industrial maintenance division in the current fiscal quarter, and an increase in accrued payroll related items in the temporary staffing division, and were partially offset by an increase in accounts receivable and services in process due to increases in sales in the temporary staffing division and the contract terms of some jobs in the industrial maintenance division which stipulate when payments will be made. Cash and cash equivalents decreased by $2,384,000 for the current fiscal quarter due to net operating losses, increases in accounts receivables, prepaid insurance and additions to property, plant and equipment. Reference should be made to the cash flow statement which spells out the details of sources and uses of cash. Open credit commitments as of June 30, 1996 were $4,700,000, $1,700,000 for C.H. Heist Corp., and $3,000,000 for Ablest Service Corp., the temporary staffing division. The company also has $367,000 (the U.S. dollar equivalent) available at the Royal Bank of Canada for Canadian operations. Capital expenditures for the current fiscal quarter were $2,038,000. Of this amount $418,000 was for computer equipment, $867,000 was for additions to the equipment fleet and the balance was for other equipment and facilities. Commitments at June 30,1996 were $233,000, of which $29,000 is for buildings and the balance for industrial maintenance equipment. 9 11 Part II-Other Information Item 6 Exhibits and Reports on Form 8-K (A) Exhibit 27.1 Financial Data Schedules (for SEC use only). (B) Reports on Form 8-K: No reports on Form 8-K have been filed during the quarter ended June 30, 1996. 10 12 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 August 5, 1996 /s/ John L. Rowley -------------- ------------------------ John L. Rowley Chief Accounting Officer 11 EX-27 2 FINANCIAL DATA SCHEUDULE (FOR SEC USE ONLY)
5 6-MOS DEC-29-1996 JAN-01-1996 JUN-30-1996 1,507,138 0 14,433,571 0 2,158,610 22,136,788 48,464,337 30,730,623 40,218,412 5,591,829 8,361,224 0 0 158,260 25,676,813 40,218,412 25,781,333 25,781,333 22,466,873 22,466,873 3,603,088 0 217,047 (499,974) (48,618) (451,356) 0 0 0 (451,356) (.16) (.16)
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