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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K/AMENDMENT NO. 1
CURRENT REPORT
PURSUANT TO SECTION 14 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date or earliest event reported) June 22, 1994
MasTec, Inc.
__________________________________________________
Delaware 0-3797 59-1259279
___________________________________________________________________________
(State or Other Jurisdiction (Commission IRS Employer
of Incorporation) File Number) Identification No.)
8600 N.W. 36th Street, Miami, Florida 33166
___________________________________________________________________________
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (305) 599-1800
___________________________________________________________________________
(Former Name or Former Address, if Changed Since Last Report)
Page 1 of 27
MasTec, Inc.
FORM 8-K/A
Item 7. (a) Financial Statements of Business Acquired
Page
Number
Report of Independent Accountants 3
Statements of Income for Nine Months Ended
December 31, 1993 and Year Ended March 31, 1993 4
Statement of Retained Earnings for Nine Months
Ended December 31, 1993 and Year Ended March 31, 1993 5
Balance Sheets at December 31, 1993 and March 31, 1993 6
Statements of Cash Flows for the Nine Months
ended December 31, 1993 and Year Ended March 31, 1993 8
Notes to Financial Statements 9
Interim Financial Statements
Statements of Income for Six Months Ended
June 22, 1994 and September 30, 1993 14
Statement of Retained Earnings for Six Months Ended
June 22, 1994 and September 30, 1993 15
Balance Sheets at June 22, 1994 and December 31, 1993 16
Statements of Cash Flows for the Six Months
ended June 22, 1994 and September 30, 1993 18
Notes to Financial Statements 19
(b) Pro Forma Financial Information 22
Combined Pro Forma Statement of Income for the Year
ended December 31, 1993 23
Combined Pro Forma Statement of Income for the Six Months
ended June 30, 1994 24
Combined Pro Forma Balance Sheet at June 30, 1994 25
Notes to Combined Pro Forma Financial Statements 26
Page 2 of 27
Board of Directors
Designed Traffic Installation Co.
Fort Lauderdale, Florida
We have audited the accompanying balance sheet of Designed Traffic
Installation Co. as at December 31, 1993 and March 31, 1993 and the related
statements of income, retained earnings, and cash flows for the nine months
and twelve months then ended. These financial statements are the
responsibility of the company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatements. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material aspects, the financial position of Designed Traffic
Installation Co., as at December 31, 1993 and March 31, 1993, and the
results of its operations and its cash flows for the nine months and twelve
months then ended, in conformity with generally accepted accounting
principles.
JANE C. HAYES & ASSOCIATES, P.A.
Certified Public Accountants
March 4, 1994
Page 3 of 27
DESIGNED TRAFFIC INSTALLATION CO.
STATEMENT OF INCOME
(PERCENTAGE OF COMPLETION BASIS)
_________________________________________________________________
9 Months Ended 12 Months Ended
December 31, 1993 March 31, 1993
EARNED REVENUES
Contract revenue $ 7,967,134 $ 6,857,537
Installation and repair 160,734 455,367
--------- ---------
8,127,868 7,312,904
--------- ---------
COST OF EARNED REVENUES
Contract costs 5,095,449 4,571,102
Unallocated labor costs 203,873 209,605
--------- ---------
5,299,322 4,780,707
--------- ---------
GROSS PROFIT 2,828,546 2,532,197
--------- ---------
EXPENSES
Operating expenses 776,933 897,558
General & administrative 1,553,738 1,359,772
Depreciation 166,153 187,690
--------- ---------
2,496,824 2,445,020
--------- ---------
OPERATING INCOME 331,722 87,177
Other income 10,864 29,415
--------- ---------
Income before provisions for
income taxes 342,586 116,592
Income taxes provision
(Note 9) 6,673 26,123
Deferred taxes (Note 9) 0 154,800
--------- ---------
NET INCOME $ 349,259 $ 297,515
========= =========
The accompanying notes to financial statements
are an integral part of this statement
Page 4 of 27
DESIGNED TRAFFIC INSTALLATION CO.
STATEMENT OF RETAINED EARNINGS
(PERCENTAGE OF COMPLETION BASIS)
________________________________________________________________
9 Months Ended 12 Months Ended
December 31, 1993 March 31, 1993
Retained earnings -
Beginning of year $ 2,385,660 $ 2,088,145
Net income 349,259 297,515
---------- ----------
Retained earnings-end of year $ 2,734,919 $ 2,385,660
========== ==========
The accompanying notes to financial statements
are an integral part of this statement
Page 5 of 27
DESIGNED TRAFFIC INSTALLATION CO.
BALANCE SHEET
(PERCENTAGE OF COMPLETION BASIS)
_________________________________________________________________
ASSETS
______
December 31, 1993 March 31, 1993
_________________ ______________
CURRENT ASSETS:
Cash on hand and in bank $ 857,460 $ 504,247
Receivables (net of allowance for
doubtful accounts) (Note 2) 1,470,935 1,412,363
Inventory (at cost) (Note 1) 29,502 11,991
Costs and estimated earnings in
excess of billings on uncompleted
contracts (Note 3) 1,001,337 756,255
Prepaid expenses 344,126 354,850
--------- ---------
Total current assets 3,703,360 3,039,706
--------- ---------
FIXED ASSETS (at cost) (Note 1):
Land 350,000 350,000
Buildings and improvements 368,180 362,059
Machinery and equipment 934,957 841,473
Automotive 754,631 750,085
Computer 60,234 88,658
Office furniture and equipment 32,050 33,041
--------- ---------
2,500,052 2,425,316
--------- ---------
Less accumulated depreciation 1,511,024 1,429,845
--------- ---------
Net fixed assets 989,028 995,471
--------- ---------
OTHER ASSETS (Note 7): 224,102 295,183
--------- ---------
TOTAL ASSETS $ 4,916,490 $ 4,330,360
=========== ===========
The accompanying notes to financial statements
are an integral part of this statement
Page 6 of 27
DESIGNED TRAFFIC INSTALLATION CO.
BALANCE SHEET
(PERCENTAGE OF COMPLETION BASIS)
_________________________________________________________________
LIABILITIES AND STOCKHOLDERS' EQUITY
____________________________________
December 31, 1993 March 31, 1993
______________ ______________
CURRENT LIABILITIES:
Accounts payable - trade $ 474,441 $ 320,870
Current maturities of
long-term debt 176,097 523,937
Billings in excess of costs and
estimated earnings on uncompleted
contracts (Note 3) 351,018 365,443
Income taxes payable (Note 9) 13,000 88,000
Accrued expenses (Note 5) 438,881 596,804
Stockholder loans 430,000 0
--------- ---------
Total current liabilities 1,883,437 1,895,054
--------- ---------
LONG-TERM LIABILITIES:
Notes payable net of current
maturities (Note 4) 378,636 130,148
--------- ---------
Total liabilities 2,262,073 2,025,202
--------- ---------
STOCKHOLDERS' EQUITY:
Common stock - par value $10.00
authorized 10,000 shares, issued
9,300 shares of which 3,300
shares are in the treasury 93,000 93,000
Paid in capital 369,498 369,498
Retained earnings 2,734,919 2,385,660
Treasury stock-3,300 shares
(at cost) (543,000) (543,000)
--------- ---------
Total stockholders' equity 2,654,417 2,305,158
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 4,916,490 $ 4,330,360
========= =========
The accompanying notes to financial statements
are an integral part of this statement
Page 7 of 27
DESIGNED TRAFFIC INSTALLATION CO.
STATEMENT OF CASH FLOWS
(PERCENTAGE OF COMPLETION BASIS)
9 Months Ended 12 Months Ended
December 31, 1993 March 31, 1993
__________________ _______________
Cash flows from operating activities:
Net income $349,259 $297,515
--------- ---------
Adjustments to reconcile net income to
net cash provided by operating activities:
Amortization of non-compete agreement 54,750 73,000
Depreciation 166,153 187,690
Provision for losses on accounts
receivable and disposal of fixed assets 17,095 8,362
Change in receivables (71,533) 642,328
Change in inventory, costs and estimated
earnings on uncompleted contracts (262,593) 310,187
Change in prepaid expenses 10,724 (63,177)
Change in accounts payable 153,571 (423,952)
Change in uncompleted contracts
billings in excess of costs and
estimated earnings (14,425) (369,138)
Change in other assets 16,331 (12,688)
Change in income tax payable (75,000) (262,000)
Change in accrued expenses (157,923) (202,847)
Change in deferred taxes 0 (154,800)
--------- ---------
Total adjustments (162,850) (267,035)
Net cash provided by operating
activities 186,409 30,480
--------- ---------
Cash flows from investing activities:
Expenditures for property and
equipment (163,844) (373,553)
--------- ---------
Cash flows from financing activities:
Principal payments under note
obligations (178,070) (203,466)
Proceeds from stockholder loans 430,000 0
Proceeds from increase in notes
payable 78,718 234,187
--------- ---------
Net cash from financing activities 330,648 30,721
--------- ---------
Increase (Decrease) in cash 353,213 (312,352)
Cash at beginning of year 504,247 816,599
--------- ---------
Cash at end of year $857,460 $504,247
========= =========
The accompanying notes to financial statements are an integral part of
this statement
Page 8 of 27
DESIGNED TRAFFIC INSTALLATION CO.
NOTES TO FINANCIAL STATEMENTS
(PERCENTAGE OF COMPLETION BASIS)
DECEMBER 31, 1993 AND MARCH 31, 1993
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
Recognition of Income
The company reports income for financial statement purposes on the
percentage of completion basis and on the completed job basis for tax
purposes. Income on contracts in process for statement purposes is
recorded on the basis of the management's estimates of the percentage of
job completion to date.
Contract costs include all direct material and labor costs and those
indirect costs related to contract performance, such as indirect labor,
payroll taxes and insurance. Selling, general and administrative costs are
charged to expense as incurred. Provisions for estimated losses on
uncompleted contracts are made in the period in which such losses are
determined. Changes in job performance, job conditions and estimated
profitability, including those arising from contract penalty provisions and
final contract settlements, may result in revisions to costs and income and
are recognized in the period in which the revisions are determined.
The asset, "Costs and estimated earnings in excess of billings on
uncompleted contracts", represents revenues recognized in excess of amounts
billed. The liability, "Billings in excess of costs and estimated earnings
on uncompleted contracts", represents billings in excess of revenues
recognized.
Depreciation
The company records depreciation on its fixed assets using the straight
line, double declining balance, and A.C.R.S. methods at rates intended to
prorate costs over estimated useful lives as follows:
Assets Estimated Useful Life
----------------------- ---------------------
Machinery and equipment 3 to 8 years
Automotive 3 to 8 years
Computer 5 years
Office furniture & equipment 5 to 8 years
Building and improvements 19 years
Pension and Profit Sharing Plans
In 1972, the Board of Directors approved pension and profit sharing plans
for the benefit of company employees. These plans were subsequently
amended to conform to current law. Qualifications for employee
participation in these plans are based upon an attained age and length of
service with the company. Pension and profit sharing costs are charged to
income on a current basis. The company's policy is to fund the costs
accrued.
Page 9 of 28
DESIGNED TRAFFIC INSTALLATION CO.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(PERCENTAGE OF COMPLETION BASIS)
DECEMBER 31, 1993 AND MARCH 31, 1993
Inventory
Inventories are stated at the lower of cost or market. Cost is determined
on the first-in-first-out method. Maintenance, operating and office
supplies of nominal value are not inventoried.
Self Insurance
The company maintains a policy of self insurance on a portion of material
and supplies purchased for inventory and contracts. As purchases are made,
they are warehoused until convenient to move to job sites. This temporary
warehousing at times exceeds insurance coverage. Management states that
every effort is made to move these goods to job sites as quickly as
possible.
NOTE 2-RECEIVABLES
December 31 March 31
----------- --------
Contract receivables:
Billed -
Completed contracts $ 381,681 $ 230,705
Contracts in progress 363,238 370,146
Retainage 414,645 543,081
Earned - not billed 322,029 293,458
--------- ---------
$1,481,593 1,437,390
Less allowance for doubtful
collections 10,658 25,027
--------- ---------
Total $1,470,935 $1,412,363
========= =========
NOTE 3-COSTS AND BILLINGS ON UNCOMPLETED CONTRACTS
December 31 March 31
----------- --------
Costs incurred on uncompleted
contracts $4,600,308 $4,189,737
Estimated earnings 1,452,671 1,273,307
--------- ---------
6,052,979 5,463,044
Less: Billings to date 5,402,660 5,072,232
--------- ---------
Net costs and estimated earnings $ 650,319 $ 390,812
========= =========
Page 10 of 27
DESIGNED TRAFFIC INSTALLATION CO.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(PERCENTAGE OF COMPLETION BASIS)
DECEMBER 31, 1993 AND MARCH 31, 1993
Included in accompanying balance sheet
under the following caption:
Cost and estimated earnings in
excess of billings on
uncompleted contracts 1,001,337 756,255
Billings in excess of costs and
estimated earnings on uncompleted
contracts (351,018) (365,443)
-------- ---------
Net costs and estimated earnings $ 650,319 $ 390,812
======== =========
NOTE 4-NOTES PAYABLE
Notes to banks and finance companies secured
by equipment with various maturity dates $ 164,875
Note to former officer for purchase of 1,184
shares of stock for the treasury, payable
quarterly at $7,967 including interest and
principal, due 01/95 29,972
The Company is in the process of refinancing its
first mortgage on the land and building with Sun
Bank. The original mortgage ballooned in October
1993 and a temporary loan was signed at that time
to bridge the time period until negotiations could
be completed on a permanent note. The "bridge-loan"
was due to balloon on March 8, 1994 with a payment of
$342,400. As of March 21, a tentative agreement has
been reached, but not signed, which calls for principal
payments of $1,600 per month plus interest at prime
plus 1% floating. The mortgage will be amortized
over 25 years and will balloon in 2001. 345,600
2nd mortgage on land and building at 1% over the prime
rate. Monthly principal payments are $714 plus
plus interest, due August 1, 1995 14,286
-------
Sub-total 554,733
Less current maturities (176,097)
-------
Total $378,636
=======
Page 11 of 27
DESIGNED TRAFFIC INSTALLATION CO.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(PERCENTAGE OF COMPLETION BASIS)
DECEMBER 31, 1993 AND MARCH 31, 1993
Principal payment due in the next five years are as
follows:
1994 $176,097
1995 63,140
1996 27,496
1997 19,200
1998 19,200
--------
Total $305,133
========
NOTE 5-ACCRUED EXPENSES
December 31 March 31
Bonuses $ 91,220 $379,736
Profit Sharing 102,907 68,570
Pension plan 14,701 17,747
General insurance and
workers compensation 206,387 73,466
Wages 20,852 42,287
Payroll taxes and other 2,814 14,998
-------- -------
Total $438,881 $596,804
======== ========
NOTE 6-PENSION AND PROFIT SHARING PLANS
Contributions to both plans are based on the annual salary of qualified
employees and are limited to a required 1% for the pension plan and an
optional contribution to the profit sharing plan based upon a formula
integrated with social security. For the nine months ended December 31 and
twelve months ended March 31, the contributions to the pension plan were
$14,701 and $17,143. The contributions to the profit sharing plan were
$102,907 and $68,570. All costs are currently funded and there is no
unfunded liability for past service costs.
NOTE 7-NON-COMPETE AGREEMENT
Other assets include a five year non-compete agreement entered into January
1991, with a former officer/shareholder. Amortization for the periods
ending December 31, and March 31 was $54,750 and $73,000, leaving remaining
balances of $146,000 and $200,750 respectively.
Page 12 of 27
DESIGNED TRAFFIC INSTALLATION CO.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(PERCENTAGE OF COMPLETION BASIS)
DECEMBER 31, 1993 AND MARCH 31, 1993
NOTE 8-CHANGE OF ACCOUNTING YEAR
For the period beginning April 1, 1993, the Company elected to be taxed as
an "S" corporation pursuant to IRS regulation 1361. Concurrent with this
election, the corporation's year-end changed from a fiscal year ending
March 31 to a calendar year-end. This change resulted in a nine month year
ending December 31, 1993. Effective January 1, 1994, the Corporation
terminated the "S" election and reverted to a "C" Corporation retaining the
December year-end.
NOTE 9 -INCOME TAXES
Construction contracts are reported on the percentage of completion method
for financial statement purposes and on the completed contract method for
tax purposes.
The Corporation elected to be taxed as an "S" Corporation for the nine
months period ended December 31, 1993 (See Note 8). As such, corporate
profits are including and taxed on the shareholders' personal income tax
returns. In addition, a corporate tax is levied on the disposal of assets
with an appreciated value (built-in gains tax). For the nine months ended
December 31, 1993, this tax amounted to $13,000. For the periods ended
December 31, 1993 and March 31, 1993, accruals for income taxes were
$13,000 and $88,000. An over-accrual from prior years resulted in a net
tax benefit on the income statement of $6,673 and $26,123 respectively.
For the year ended March 31, 1993, election of the "S" status eliminated
the need for deferred income prior year taxes. Accordingly, the deferred
tax asset and liability on the balance sheet have been eliminated resulting
in a deferred tax benefit on the income statement of $154,800.
NOTE 10-LINE OF CREDIT
The company has maintained a $250,000 line of credit with Sun Bank for the
past four years at prime plus 1% floating, and guaranteed by the principals
with a lien on equipment and inventories. This amount has been increased
by the bank to $500,000, maturing June 30, 1994. As of the date of this
report, the company has not drawn on this line of credit.
Page 13 of 27
DESIGNED TRAFFIC INSTALLATION CO.
STATEMENT OF INCOME
(PERCENTAGE OF COMPLETION BASIS)
(UNAUDITED)
_________________________________________________________________
6 Months Ended 6 Months Ended
EARNED REVENUES June 30, 1994 September 30, 1993
Contract revenue $ 4,638,812 $ 5,245,973
Installation and repair 133,153 138,867
--------- ---------
4,771,965 5,384,840
--------- ---------
COST OF EARNED REVENUES
Contract costs 3,046,313 3,045,966
Unallocated labor costs 113,221 123,965
--------- ---------
3,159,534 3,169,661
--------- ---------
GROSS PROFIT 1,612,431 2,215,179
--------- ---------
EXPENSES
Operating expenses 422,464 326,750
General & administrative 714,727 672,573
Depreciation 119,705 90,799
Interest Expense 22,426 21,996
--------- ---------
1,279,322 1,112,118
--------- ---------
OPERATING INCOME 333,109 1,103,061
Other income 8,505 8,003
--------- ---------
Income before provisions for
income taxes 341,414 1,111,064
Income taxes provision 152,081 0
--------- ---------
NET INCOME $ 189,333 $1,111,064
========= =========
The accompanying notes to financial statements
are an integral part of this statement
Page 14 of 27
DESIGNED TRAFFIC INSTALLATION CO.
STATEMENT OF RETAINED EARNINGS
(PERCENTAGE OF COMPLETION BASIS)
(UNAUDITED)
________________________________________________________________
9 Months Ended 12 Months Ended
December 31, 1993 March 31, 1993
Retained earnings -
Beginning of year $ 2,734,919 $ 2,385,660
Net income 189,333 1,111,064
---------- ----------
Retained earnings-end of year $ 2,924,252 $ 3,496,724
========== ==========
The accompanying notes to financial statements
are an integral part of this statement
Page 15 of 27
DESIGNED TRAFFIC INSTALLATION CO.
BALANCE SHEET
(PERCENTAGE OF COMPLETION BASIS)
(UNAUDITED)
_________________________________________________________________
ASSETS
______
June 22, 1994 December 31, 1993
______________ ________________
CURRENT ASSETS:
Cash on hand and in bank $ 223,178 $ 857,460
Receivables (net of allowance for
doubtful accounts) 1,694,395 1,470,935
Inventory (at cost) 65,725 29,502
Costs and estimated earnings in
excess of billings on uncompleted
contracts 1,183,846 1,001,337
Prepaid expenses 140,482 344,126
--------- ---------
Total current assets 3,307,626 3,703,360
--------- ---------
FIXED ASSETS (at cost):
Land 350,000 350,000
Buildings and improvements 368,180 368,180
Machinery and equipment 822,885 934,957
Automotive 856,450 754,631
Computer 60,234 60,234
Office furniture and equipment 32,050 32,050
--------- ---------
2,487,799 2,500,052
--------- ---------
Less accumulated depreciation (1,447,524) (1,511,024)
--------- ---------
Net fixed assets 1,042,275 989,028
--------- ---------
OTHER ASSETS: 208,650 224,102
--------- ---------
TOTAL ASSETS $ 4,558,551 $ 4,916,490
=========== ===========
The accompanying notes to financial statements
are an integral part of this statement
Page 16 of 27
DESIGNED TRAFFIC INSTALLATION CO.
BALANCE SHEET
(PERCENTAGE OF COMPLETION BASIS)
(UNAUDITED)
_________________________________________________________________
LIABILITIES AND STOCKHOLDERS' EQUITY
____________________________________
June 22, 1994 December 31, 1993
______________ ______________
CURRENT LIABILITIES:
Accounts payable - trade $ 383,567 $ 474,441
Current maturities of
long-term debt 137,995 176,097
Billings in excess of costs and
estimated earnings on uncompleted
contracts 224,090 351,018
Income taxes payable 151,371 13,000
Accrued expenses 281,223 438,881
Stockholder loans 102,158 430,000
--------- ---------
Total current liabilities 1,280,404 1,883,437
--------- ---------
LONG-TERM LIABILITIES:
Notes payable net of current
maturities 434,397 378,636
--------- ---------
Total liabilities 1,714,801 2,262,073
--------- ---------
STOCKHOLDERS' EQUITY:
Common stock - par value $10.00
authorized 10,000 shares, issued
9,300 shares of which 3,300
shares are in the treasury 93,000 93,000
Paid in capital 369,498 369,498
Retained earnings 2,924,252 2,734,919
Treasury stock-3,300 shares
(at cost) (543,000) (543,000)
--------- ---------
Total stockholders' equity 2,843,750 2,654,417
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 4,558,551 $ 4,916,490
=========== ===========
The accompanying notes to financial statements
are an integral part of this statement
Page 17 of 27
DESIGNED TRAFFIC INSTALLATION CO.
STATEMENT OF CASH FLOWS
(PERCENTAGE OF COMPLETION BASIS)
(UNAUDITED)
6 Months Ended
June 22, 1994 September 30, 1993
-----------------------------------
Cash flows from operating activities:
Net income $ 189,333 $1,111,064
--------- ---------
Adjustments to reconcile net income to
net cash provided by operating activities:
Amortization of non-compete agreement 34,878 36,500
Depreciation 119,905 90,799
Provision for losses on accounts
receivable and disposal of fixed assets (1,704) 0
Change in receivables (223,260) (149,331)
Change in inventory, costs and estimated
earnings on uncompleted contracts (218,732) (539,253)
Change in prepaid expenses 203,644 64,629
Change in accounts payable (90,874) 121,166
Change in uncompleted contracts
billings in excess of costs and
estimated earnings (126,928) 79,810
Change in other assets (19,426) 20,342
Change in income tax payable 138,371 (10,725)
Change in accrued expenses (172,658) (320,353)
--------- ---------
Net cash (used) provided by operating
activities (167,651) 504,648
--------- ---------
Cash flows from investing activities:
Expenditures for property and
equipment (229,405) (112,460)
Proceeds from sale of equipment 57,957 0
--------- ---------
Net cash used in investing activities (171,448) (112,460)
--------- ---------
Cash flows from financing activities:
Principal payments under note
obligations (490,264) (120,193)
Payments of stockholder loans (312,842) 0
Proceeds from increase in notes payable 507,923 41,261
--------- ---------
Net cash (used) provided by financing
activities (295,183) (78,932)
--------- ---------
Increase (Decrease) in cash (634,282) 313,256
Cash at beginning of year 857,460 504,247
--------- ---------
Cash at end of year $223,178 $817,503
========= =========
The accompanying notes to financial statements are an integral part of
this statement
Page 18 of 27
DESIGNED TRAFFIC INSTALLATION CO.
NOTES TO FINANCIAL STATEMENTS
(PERCENTAGE OF COMPLETION BASIS)
JUNE 22, 1994
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
Presentation
The accompanying financial statements of Designed Traffic Installation
Co.("DTI") have been prepared in accordance with generally accepted
accounting principles for interim financial information. They do not
include all information and notes required by generally accepted accounting
principles for complete financial statements and should be read in
conjunction with the audited financial statements for the nine month period
ended December 31, 1993. The financial information furnished reflects all
adjustments, consisting only of normal recurring accruals which are, in the
opinion of management, necessary for a fair presentation of the financial
position and results of operations for the periods presented. The results
of operations are not necessarily indicative of future results of operation
or financial position of DTI.
Recognition of Income
The Company reports income for financial statement purposes on the
percentage of completion basis and on the completed job basis for tax
purposes. Income on contracts in process for statement purposes is
recorded on the basis of the management's estimates of the percentage of
job completion to date.
Contract costs include all direct material and labor costs and those
indirect costs related to contract performance, such as indirect labor,
payroll taxes and insurance. Selling, general and administrative costs are
charged to expense as incurred. Provisions for estimated losses on
uncompleted contracts are made in the period in which such losses are
determined. Changes in job performance, job conditions and estimated
profitability, including those arising from contract penalty provisions and
final contract settlements, may result in revisions to costs and income and
are recognized in the period in which the revisions are determined.
The asset, "Costs and estimated earnings in excess of billings on
uncompleted contracts", represents revenues recognized in excess of amounts
billed. The liability, "Billings in excess of costs and estimated earnings
on uncompleted contracts", represents billings in excess of revenues
recognized.
Page 19 of 27
DESIGNED TRAFFIC INSTALLATION CO.
NOTES TO FINANCIAL STATEMENTS
(PERCENTAGE OF COMPLETION BASIS)
JUNE 22, 1994 (continued)
Depreciation
The company records depreciation on its fixed assets using the straight
line, double declining balance, and A.C.R.S. methods at rates intended to
prorate costs over estimated useful lives as follows:
Assets Estimated Useful Life
----------------------- ---------------------
Machinery and equipment 3 to 8 years
Automotive 3 to 8 years
Computer 5 years
Office furniture & equipment 5 to 8 years
Building and improvements 19 years
Pension and Profit Sharing Plans
In 1972, the Board of Directors approved pension and profit sharing plans
for the benefit of company employees. These plans were subsequently
amended to conform to current law. Qualifications for employee
participation in these plans are based upon an attained age and length of
service with the company. Pension and profit sharing costs are charged to
income on a current basis. The company's policy is to fund the costs
accrued.
Inventory
Inventories are stated at the lower of cost or market. Cost is determined
on the first-in-first-out method. Maintenance, operating and office
supplies of nominal value are not inventoried.
Self Insurance
The company maintains a policy of self insurance on a portion of material
and supplies purchased for inventory and contracts. As purchases are made,
they are warehoused until convenient to move to job sites. This temporary
warehousing at times exceeds insurance coverage. Management states that
every effort is made to move these goods to job sites as quickly as
possible.
NOTE 2-CHANGE OF ACCOUNTING YEAR
For the period beginning April 1, 1993, the Company elected to be taxed as
an "S" corporation pursuant to IRS regulation 1361. Concurrent with this
election, the corporation's year-end changed from a fiscal year ending
March 31 to a calendar year-end. This change resulted in a nine month year
ending December 31, 1993. Effective January 1, 1994, the Corporation
terminated the "S" election and reverted to a "C" Corporation retaining the
December year-end.
Page 20 of 27
DESIGNED TRAFFIC INSTALLATION CO.
NOTES TO FINANCIAL STATEMENTS
(PERCENTAGE OF COMPLETION BASIS)
JUNE 22, 1994 (continued)
NOTE 3-LINE OF CREDIT
The company has maintained a $250,000 line of credit with Sun Bank for the
past four years at prime plus 1% floating, and guaranteed by the principals
with a lien on equipment and inventories. This amount has been increased
by the bank to $500,000, maturing June 30, 1994. As of the date of this
report, the company has not drawn on this line of credit.
Page 21 of 27
CONSOLIDATED PRO FORMA FINANCIAL INFORMATION (UNAUDITED):
The following unaudited pro forma consolidated statements of income of
MasTec and DTI for the year ended December 31, 1993 and six months ended
June 30, 1994 are presented as if the acquisition had occurred on January
1, 1993. The unaudited pro forma consolidated balance sheet is presented
as if the acquisition had occurred on June 22, 1994. Because of DTI's
change in fiscal year, data was only available for nine months ended
December 31, 1993.
The pro forma data is presented for informational purposes only and may not
be indicative of the future results of operations or financial position of
MasTec, or what the results of operations or financial position of MasTec
would have been if the acquisition had occurred on the dates set forth.
These pro forma consolidated financial statements should be read in
conjunction with the historical combined financial statements and notes
thereto of DTI included herein and MasTec as included by reference.
The unaudited pro forma consolidated financial statements are derived from
the historical financial statements of MasTec and DTI. The pro forma
consolidated balance sheet combines MasTec's June 30, 1994 balance sheet
with DTI June 22, 1994 balance sheet. The pro forma consolidated
statements of income combine MasTec's pro forma statements of operations
for the twelve months ended December 31, 1993, as reported in MasTec's FORM
8-K filed May 17, 1994 which is hereby included by reference and for the
six months ended June 30, 1994 as reported in MasTec's 10-Q filed August 8,
1994 which is hereby included by reference, with DTI's historical statement
of operations for the nine months ended December 31, 1993 and six months
ended June 22, 1994.
Page 22 of 27
MasTec, INC.
PROFORMA FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands Except Per Share Amounts)
12 Months 9 Months
Ended Ended
December 31, December 31,
1993 1993
MasTec PRO FORMA COMBINED
PRO FORMA DTI ADJUSTMENTS PRO FORMA
(Unaudited) (Audited) (Unaudited) (Unaudited)
Revenues $ 182,415 $ 8,128 $ $ 190,543
--------- --------- --------- ---------
Costs and Expenses
Costs of Revenues (exclusive
of depreciation and amortization
shown separately below) 154,107 6,076 160,183
General and Administrative 28,398 1,520 29,918
Depreciation and Amortization 3,328 166 3,494
Interest Expense 4,334 34 138 (1) 4,506
Interest and Dividend Income (1,552) (10) (1,562)
Other (1,166) 0 (1,166)
--------- --------- --------- ---------
Total Costs and Expenses 187,449 7,786 138 195,373
--------- --------- --------- ---------
Income (Loss) Before Income
Taxes, Equity in Earnings
(Losses) of Unconsolidated
Joint Ventures and
Minority Interest (5,034) 342 (138) (4,830)
Credit for Income Taxes (1,236) (7) (52)(2) (1,295)
--------- --------- --------- ---------
Income (Loss) Before Equity (3,798) 349 (86) (3,535)
in Earnings of
Unconsolidated Joint
Ventures and Minority Interest
Equity in Earnings of
Unconsolidated Joint Ventures 1,187 0 1,187
Minority Interest (10) 0 (10)
--------- --------- --------- ---------
NET INCOME (LOSS) $ (2,621) $ 349 $ (86) $ (2,358)
========= ========= ========= =========
Average Shares Outstanding 16,028 6,000 (6,000)(3) 16,028
Earnings (Loss) Per Share $ (0.16) $ 0.06 $ (0.15)
Page 23 of 27
MasTec, INC.
PROFORMA FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands Except Per Share Amounts)
6 Months Ended
June 30, 1994 June 22, 1994
MasTec PRO FORMA COMBINED
PRO FORMA DTI ADJUSTMENTS PRO FORMA
(Unaudited) (Audited) (Unaudited)(Unaudited)
Revenues $ 70,692 $ 4,772 $ $ 75,464
--------- --------- --------- ---------
Costs and Expenses
Costs of Revenues (exclusive
of depreciation and amortization
shown separately below) 57,764 3,582 61,346
General and Administrative 9,929 716 10,645
Depreciation and Amortization 3,469 120 3,589
Interest Expense 2,045 22 41 (1) 2,108
Interest and Dividend Income (1,061) (9) (1,070)
Other (236) 0 (236)
--------- --------- --------- ---------
Total Costs and Expenses 71,910 4,431 41 76,382
--------- --------- --------- ---------
Income (Loss) Before Income
Taxes, Equity in Earnings
(Losses) of Unconsolidated
Joint Ventures and
Minority Interest (1,218) 341 (41) (918)
Provision (Credit) for Income
Taxes (1,188) 152 (15)(2) (1,051)
--------- --------- --------- ---------
Income (Loss) Before Equity (30) 189 (26) 133
in Earnings of
Unconsolidated Joint
Ventures and Minority Interest
Equity in Earnings of
Unconsolidated Joint Ventures 137 0 137
Minority Interest 0 0 0
--------- --------- --------- ---------
NET INCOME (LOSS) $ 107 $ 189 $ (26) $ 270
========= ========= ========= =========
Average Shares Outstanding 16,051 6,000 (6,000)(3) 16,051
Earnings (Loss) Per Share $ 0.01 $ 0.03 $ 0.02
Page 24 of 27
MasTec, Inc.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In Thousands)
MasTec DTI PRO FORMA COMBINED
June 30, 1994 June 22, 1994 ADJUSTMENTS PROFORMA
ASSETS
Current Assets
Cash and Cash Equivalents $ 5,961 $ 223 $ $ 6,184
Accounts Receivable-Net
and Unbilled Revenues 30,733 2,878 33,611
Inventories 4,694 66 4,760
Deferred and Refundable
Income Taxes 5,088 0 5,088
Other 1,200 140 1,340
-------- -------- ------ -------
Total Current Assets 47,676 3,307 0 50,983
-------- -------- ------ -------
Preferred Stock and Long-Term
Notes Receivable-NBC 11,403 0 11,403
-------- -------- ------ -------
Property-Net 51,934 1,042 401 (4) 52,976
-------- -------- ------ -------
Real Estate Investments and
Other Assets 28,182 209 (3,244) (5) 25,147
-------- -------- ------ -------
TOTAL ASSETS $ 139,195 $ 4,558 $ (2,843) $140,509
======== ======== ======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current Maturities of Debt $ 6,540 $ 240 $ $ 6,780
Accounts Payable 6,681 384 7,065
Accrued Insurance 4,056 0 4,056
Accrued Compensation 1,534 0 1,534
Accrued Interest 582 0 582
Accrued Income Taxes 1,082 151 1,233
Other 6,602 506 7,108
-------- -------- ------ -------
Total Current Liabilities 27,077 1,281 0 28,358
-------- -------- ------ -------
Other Liabilities 30,723 434 31,157
-------- -------- ------ -------
Long-Term Debt 13,055 13,055
-------- -------- ------ -------
Convertible Subordinated
Debentures 21,875 21,875
-------- -------- ------ -------
Shareholders' Equity
Common Stock 2,643 93 (93) (6) 2,643
Capital Surplus 134,064 369 (369) (7) 134,064
Retained Earnings 1,990 2,924 (2,924) (8) 1,990
Treasury Stock (92,232) (543) 543 (9) (92,232)
-------- -------- ------ -------
Total 46,465 2,843 (2,843) 46,465
-------- -------- ------ -------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 139,195 $ 4,558 $(2,843) $140,910
======== ======== ======= =======
Page 25 of 27
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(1) Additional interest expense from note issued to DTI shareholders.
(2) Credit for income taxes from increased interest expense in Note 1
assuming 37.6% effective tax rate.
(3) Elimination of DTI's outstanding shares.
(4) Increase of DTI's property to management's estimate of fair market
value.
(5) Elimination of MasTec's investment in DTI.
(6) Elimination of DTI's common stock.
(7) Elimination of DTI's capital surplus.
(8) Elimination of DTI's retained earnings.
(9) Elimination of DTI's treasury stock.
Page 26 of 27
MasTec, Inc.
SIGNATURES
FORM 8-K/A
Pursuant to the requirement 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.
MasTec, Inc.
Registrant
Date: September 2, 1994 /s/ Carlos A. Valdes
___________________________
Carlos A. Valdes
Senior Vice President-Finance
(Principal Financial Officer
and
Authorized Officer of the Registrant)
Page 27 of 27