UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended March 31, 2004
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File No. 000-30911
THE PBSJ CORPORATION
(Exact name of registrant as specified in its charter)
| FLORIDA | 59-1494168 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
2001 N.W. 107th AVENUE
MIAMI, FLORIDA 33172-2507
(Address of principal executive offices)
(305) 592-7275
(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 12(g) 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 by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). YES ¨ NO x
As of April 30, 2004, there were 7,924,808 shares of Common Stock, $.00067 par value per share, outstanding.
THE PBSJ CORPORATION
FORM 10-Q
MARCH 31, 2004
| Item |
CAPTION |
PAGE | ||
| PART I: FINANCIAL INFORMATION |
||||
| Item 1. |
Financial Statements | 3 | ||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations | 12 | ||
| Item 3. |
Quantitative and Qualitative Disclosures about Market Risk | 27 | ||
| Item 4. |
Controls and Procedures | 28 | ||
| PART II: OTHER INFORMATION |
||||
| Item 1. |
Legal Proceedings | 28 | ||
| Item 2. |
Changes in Securities, Use of Proceeds and Issuer Purchase of Equity Securities | 28 | ||
| Item 3. |
Defaults Upon Senior Securities | 29 | ||
| Item 4. |
Submission of Matters to a Vote of Security Holders | 30 | ||
| Item 5. |
Other Information | 31 | ||
| Item 6. |
Exhibits and Reports on Form 8-K | 32 | ||
| 34 | ||||
2
PART I
| Item 1. | Financial Statements |
THE PBSJ CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
| March 31, 2004 |
September 30, 2003 |
|||||||
| (Unaudited) | ||||||||
| Assets |
||||||||
| Current Assets: |
||||||||
| Cash and cash equivalents |
$ | 1,936 | $ | 3,290 | ||||
| Marketable securities |
573 | 550 | ||||||
| Accounts receivable |
54,035 | 52,510 | ||||||
| Unbilled fees |
43,972 | 39,916 | ||||||
| Other current assets |
12,904 | 4,316 | ||||||
| Total current assets |
113,420 | 100,582 | ||||||
| Property and equipment, net |
32,683 | 31,599 | ||||||
| Cash surrender value of life insurance |
8,067 | 7,357 | ||||||
| Deferred income taxes |
5,416 | 5,701 | ||||||
| Goodwill |
9,495 | 9,452 | ||||||
| Other assets |
1,992 | 2,186 | ||||||
| Total assets |
171,073 | 156,877 | ||||||
| Liabilities and Stockholders’ Equity |
||||||||
| Current Liabilities: |
||||||||
| Accounts payable and accrued expenses |
32,923 | 33,060 | ||||||
| Current portion of long-term debt |
282 | 820 | ||||||
| Accrued vacation |
7,626 | 7,598 | ||||||
| Deferred income taxes |
20,314 | 16,691 | ||||||
| Total current liabilities |
61,145 | 58,169 | ||||||
| Long-term debt, less current portion |
26,796 | 17,350 | ||||||
| Deferred compensation |
6,749 | 6,544 | ||||||
| Other liabilities |
5,937 | 5,351 | ||||||
| Total liabilities |
100,627 | 87,414 | ||||||
| Stockholders’ Equity: |
||||||||
| Redeemable common stock, par value $0.00067, 15,000,000 shares authorized, 7,639,366 and 7,969,780 shares issued and outstanding at March 31, 2004 and September 30, 2003, respectively. Redeemable common stock had a redemption value of $171,886 and $179,320 at March 31, 2004 and September 30, 2003, respectively. |
5 | 5 | ||||||
| Retained earnings |
72,575 | 71,792 | ||||||
| Accumulated other comprehensive loss |
(178 | ) | (314 | ) | ||||
| Notes receivable from stockholders |
— | — | ||||||
| Unearned compensation |
(1,956 | ) | (2,020 | ) | ||||
| Total stockholders’ equity |
70,446 | 69,463 | ||||||
| Total liabilities and stockholders’ equity |
$ | 168,039 | $ | 156,877 | ||||
The accompanying notes are an integral part of these consolidated financial statements.
3
THE PBSJ CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands)
| Three months ended March 31, |
Six months ended March 31, |
|||||||||||||||
| 2004 |
2003 |
2004 |
2003 |
|||||||||||||
| STATEMENTS OF OPERATIONS DATA: |
||||||||||||||||
| Earned revenue: |
||||||||||||||||
| Engineering fees |
$ | 109,285 | $ | 97,365 | $ | 212,780 | $ | 182,449 | ||||||||
| Direct expenses |
21,840 | 20,572 | 43,110 | 39,255 | ||||||||||||
| Net earned revenue |
87,445 | 76,793 | 169,670 | 143,194 | ||||||||||||
| Costs and expenses: |
||||||||||||||||
| Direct salaries |
31,933 | 27,394 | 61,161 | 51,236 | ||||||||||||
| General and administrative expenses |
47,905 | 41,887 | 94,631 | 80,231 | ||||||||||||
| Total costs and expenses |
79,838 | 69,281 | 155,792 | 131,467 | ||||||||||||
| Operating income |
7,607 | 7,512 | 13,878 | 11,727 | ||||||||||||
| Other income (expenses): |
||||||||||||||||
| Interest expense |
(210 | ) | (256 | ) | (447 | ) | (515 | ) | ||||||||
| Other, net |
272 | 182 | 759 | 417 | ||||||||||||
| Total other income (expenses) |
62 | (74 | ) | 312 | (98 | ) | ||||||||||
| Income before income taxes |
7,669 | 7,438 | 14,190 | 11,629 | ||||||||||||
| Provision for income taxes |
2,949 | 2,529 | 5,818 | 3,954 | ||||||||||||
| Net income |
$ | 4,720 | $ | 4,909 | $ | 8,372 | $ | 7,675 | ||||||||
| Net income per share: |
||||||||||||||||
| Basic |
$ | .65 | $ | .66 | $ | 1.15 | $ | 1.02 | ||||||||
| Diluted |
$ | .60 | $ | .61 | $ | 1.07 | $ | .95 | ||||||||
| Weighted average shares outstanding: |
||||||||||||||||
| Basic |
7,257,739 | 7,482,228 | 7,297.615 | 7,552,712 | ||||||||||||
| Diluted |
7,806,748 | 8,043,152 | 7,846,623 | 8,113,635 | ||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
4
THE PBSJ CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
| Six months ended March 31, |
||||||||
| 2004 |
2003 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net income |
$ | 8,372 | $ | 7,675 | ||||
| Adjustments to reconcile net income to net cash (used in) provided by operating activities: |
||||||||
| Other |
3 | (185 | ) | |||||
| Depreciation and amortization |
4,354 | 4,104 | ||||||
| Gain on sale of property |
(36 | ) | ||||||
| Provision for bad debt and unbillable amounts |
152 | 26 | ||||||
| Provision for deferred income taxes |
3,851 | 2,017 | ||||||
| Provision for deferred compensation |
489 | 511 | ||||||
| Changes in operating assets and liabilities, net of Acquisitions: |
||||||||
| (Increase) decrease in accounts receivable |
(1,677 | ) | 924 | |||||
| Increase in unbilled fees |
(4,056 | ) | (10,774 | ) | ||||
| Increase in other current assets |
(8,588 | ) | (6,773 | ) | ||||
| Increase in goodwill |
(43 | ) | — | |||||
| (Increase) decrease in other assets |
(414 | ) | 172 | |||||
| Decrease in accounts payable and accrued Expenses |
(3,459 | ) | (1,549 | ) | ||||
| Increase (decrease) in accrued vacation |
28 | (110 | ) | |||||
| Increase (decrease) in other liabilities |
754 | (414 | ) | |||||
| Net cash used in operating activities |
(270 | ) | (4,376 | ) | ||||
| Cash flows from investing activities: |
||||||||
| Investment in life insurance policies |
(283 | ) | (283 | ) | ||||
| Acquisition of DTI, net of cash acquired |
— | (1,465 | ) | |||||
| Acquisition of Welker, net of cash acquired |
— | (3,600 | ) | |||||
| Sale of property and equipment |
54 | 25 | ||||||
| Purchase of property and equipment |
(5,274 | ) | (4,197 | ) | ||||
| Net cash used in investing activities |
(5,503 | ) | (9,520 | ) | ||||
| Cash flows from financing activities: |
||||||||
| Borrowings under line of credit |
95,763 | 79,982 | ||||||
| Principal payments under line of credit |
(86,174 | ) | (61,373 | ) | ||||
| Principal payments under notes and mortgage payable |
(681 | ) | (656 | ) | ||||
| Proceeds from sale of common stock |
6,046 | 3,800 | ||||||
| Purchase of common stock |
(10,535 | ) | (8,652 | ) | ||||
| Net cash provided by financing activities |
4,419 | 13,101 | ||||||
| Net decrease in cash and cash equivalents |
(1,354 | ) | (795 | ) | ||||
| Cash and cash equivalents at beginning of year |
3,290 | 2,967 | ||||||
| Cash and cash equivalents at end of period |
$ | |||||||