-----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, SXizmPOmHT7XrlU93uyALWQQjcQiS+Hm38mkB9yIHtshnCgePLlOMn6Dy41d4sJ3 l4EqGreFVh9ieXM6K59mCA== 0000929624-99-001083.txt : 19990615 0000929624-99-001083.hdr.sgml : 19990615 ACCESSION NUMBER: 0000929624-99-001083 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990607 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990608 FILER: COMPANY DATA: COMPANY CONFORMED NAME: URS CORP /NEW/ CENTRAL INDEX KEY: 0000102379 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ENGINEERING SERVICES [8711] IRS NUMBER: 941381538 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-07567 FILM NUMBER: 99642291 BUSINESS ADDRESS: STREET 1: 100 CALIFORNIA ST STE 500 CITY: SAN FRANCISCO STATE: CA ZIP: 94111 BUSINESS PHONE: 4157742700 MAIL ADDRESS: STREET 1: 100 CALIFORNIA STREET STREET 2: SUITE 500 CITY: SAN FRANCISCO STATE: CA ZIP: 94111 FORMER COMPANY: FORMER CONFORMED NAME: THORTEC INTERNATIONAL INC DATE OF NAME CHANGE: 19900222 FORMER COMPANY: FORMER CONFORMED NAME: URS CORP /DE/ DATE OF NAME CHANGE: 19871214 8-K 1 FORM 8-K SECURITIES EXCHANGE AND COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): June 7, 1999 URS Corporation (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation) 1-7567 94-1381538 (Commission File No.) (I.R.S. Employer Identification No.) 100 California Street, Suite 500, San Francisco, California 94111-4529 (Address of principal executive offices and zip code) Registrant's telephone number, including area code: (415) 774-2700 1 Item 5. Other Events URS Corporation ("URS") and Dames & Moore Group ("Dames & Moore") announced on May 5, 1999 that they signed a definitive agreement under which URS will acquire Dames & Moore for $16 per share in cash. In connection with the acquisition and the related financing, URS prepared unaudited pro forma combined financial information which is included as Exhibit 99.1 to this Form 8-K. References to the "Combined Company" refer to URS and Dames & Moore after giving effect to the Dames & Moore acquisition. Robert D. Glynn, Jr. resigned as a director of URS Corporation as of June 2, 1999 due to his concerns about potential future competition in the energy services market between the Combined Company and PG&E Corporation, of which Mr. Glynn is the Chairman, President and Chief Executive Officer. This Form 8-K, including the exhibit, contains "forward-looking statements" within the meaning of the securities laws, including statements about the Dames & Moore acquisition and the unaudited pro forma combined financial information of the Combined Company. URS believes that its expectations are reasonable and are based on reasonable assumptions. However, risks and uncertainties relating to future events that could cause actual results to differ materially from URS' expections include URS' ability to consummate the Dames & Moore acquisition and the related financing, URS' dependancy on government programs and contracts, competitive practices in the industry, URS' ability to attract and retain qualified professionals, exposure to potential liability, and other factors discussed more fully in URS' 1998 Form 10-K and other publicly available reports filed with the Securities and Exchange Commission from time to time. URS does not intend, and assumes no obligation, to update any forward-looking statements. Item 7. Exhibits Exhibit Number Exhibit 99.1 Unaudited Pro Forma Combined Financial Information of URS and Dames & Moore 2 SIGNATURE 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. URS Corporation Dated: June 8, 1999 By: /s/ Kent P. Ainsworth --------------------- Kent P. Ainsworth Executive Vice President Chief Financial Officer and Secretary 3 EXHIBIT INDEX Exhibit Number Description - ------ ----------- 99.1 Unaudited Pro Forma Combined Financial Information of URS and Dames & Moore 4 EX-99.1 2 COMBINED FINANCIAL INFO. OF URS AND DAMES & MOORE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION The following unaudited pro forma combined financial information is derived from the historical consolidated balance sheets and related consolidated statements of Dames & Moore's and URS' operations adjusted to give effect to the Dames & Moore acquisition and URS' plan for financing the acquisition of Dames & Moore (the "Financing Plan"). References to the "Combined Company" refer to URS and Dames & Moore after giving effect to the Dames & Moore acquisition. In addition, the Dames & Moore financial information has been adjusted to give effect to the acquisition of Radian International ("Radian") as of January 1, 1998. The unaudited pro forma combined balance sheet may not reflect the Combined Company's actual financial position as of April 30, 1999. The unaudited pro forma combined statements of operations may not reflect the actual results of operations the Combined Company would have had for the six months ended April 30, 1999 or the twelve months ended October 31, 1998. The unaudited pro forma combined financial statements also do not reflect the future financial position or results of operations for the Combined Company. The unaudited pro forma combined balance sheet and statements of operations are provided for illustrative purposes only and should be read in conjunction with the accompanying notes. URS has assumed for purposes of the unaudited pro forma combined balance sheet as of April 30, 1999 that the Dames & Moore acquisition and the Financing Plan occurred as of that date. URS has assumed for purposes of the unaudited pro forma combined statements of operations for the six months ended April 30, 1999 and the twelve months ended October 31, 1998 that the Dames & Moore acquisition and the Financing Plan occurred as of November 1, 1997. URS' fiscal year ends on October 31 and Dames & Moore's fiscal year ends on the last Friday of March. To present comparable data for Dames & Moore and URS, the pro forma statements of operations include the historical data for Dames & Moore for the six months ended March 26, 1999 and for the twelve months ended December 25, 1998. Therefore, the results of operations for Dames & Moore for the period September 26, 1998 through December 25, 1998 are reflected both for the six months ended March 26, 1999 and for the twelve months ended December 25, 1998. The total revenues and net earnings of Dames & Moore for the three months ended December 25, 1998 that have been reflected in both periods are approximately $287.4 million and $5.3 million, respectively. UNAUDITED PRO FORMA COMBINED BALANCE SHEET
As of As of April 30, 1999 March 26, 1999 As of April 30, 1999 --------------- -------------- ------------------------- URS Corporation Dames & Moore Adjustments Pro Forma --------------- -------------- ----------- ---------- ASSETS (in thousands) Current assets: Cash, cash equivalents, and short term investments........... $ 10,036 $ 16,216 $ -- $ 26,252 Accounts receivable, net................... 183,469 215,122 -- 398,591 Costs and accrued earnings in excess of billings on contracts in process, net....... 112,820 98,256 -- 211,076 Prepaid expenses and other................. 12,098 36,912 -- 49,010 -------- -------- --------- ---------- Total current assets.............. 318,423 366,506 -- 684,929 Property and equipment, at cost, net........... 32,508 57,518 -- 90,026 Goodwill, net........... 136,123 159,918 (159,918)(a) 472,932 336,809 (a) Other assets............ 7,603 50,637 18,000 (b) 76,240 -------- -------- --------- ---------- Total assets......... $494,657 $634,579 $ 194,891 $1,324,127 ======== ======== ========= ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Long-term debt, current portion............... $ 23,001 $ 18,433 $ (16,401)(c) $ 25,800 (11,233)(c) 12,000 (d) Accounts payable....... 40,714 57,842 -- 98,556 Other current liabilities........... 16,495 67,127 -- 83,622 Accrued salaries and benefits.............. 35,359 38,934 -- 74,293 Billings in excess of costs and accrued earnings on contracts in process............ 43,724 -- -- 43,724 -------- -------- --------- ---------- Total current liabilities......... 159,293 182,336 (15,634) 325,995 Long-term debt.......... 110,808 284,147 (94,408)(c) 654,400 (284,147)(c) 638,000 (d) Deferred--compensation and other.............. 41,607 21,176 62,783 -------- -------- --------- ---------- Total liabilities.... 311,708 487,659 243,811 1,043,178 -------- -------- --------- ---------- Mandatory redeemable Series A Preferred Stock.................. -- -- 98,000 (e) 98,000 Mandatory redeemable Series C Preferred Stock.................. -- -- -- -- Stockholders' equity: Common stock........... 155 228 (228)(f) 155 Treasury stock......... (287) (59,373) 59,373 (f) (287) Series B Exchangeable Convertible Preferred Stock................. -- -- -- -- Additional paid-in capital............... 121,691 107,817 (107,817)(f) 121,691 Retained earnings...... 61,320 102,264 (102,264)(f) 61,320 Other stockholders' equity................ 70 (4,016) 4,016 (f) 70 -------- -------- --------- ---------- Total stockholders' equity.............. 182,949 146,920 (146,920) 182,949 -------- -------- --------- ---------- Total liabilities and stockholders' equity.............. $494,657 $634,579 $ 194,891 $1,324,127 ======== ======== ========= ==========
See Notes to Unaudited Pro Forma Combined Balance Sheet NOTES TO UNAUDITED PRO FORMA COMBINED BALANCE SHEET (dollars in thousands) (a) Reflects the elimination of Dames & Moore's historical goodwill and the aggregate goodwill created by the Dames & Moore acquisition. Purchase price (net of debt).................................. $ 303,811 Acquisition costs (net of financing fees)..................... 20,000 --------- 323,811 Less:net assets acquired...................................... (146,920) --------- Incremental additional purchase price over net assets acquired..................................................... 176,891 Dames & Moore historical goodwill, net........................ 159,918 --------- Aggregate goodwill............................................ $ 336,809 =========
We believe that the amounts for tangible assets and liabilities reflected on Dames & Moore's consolidated statement of financial position approximate the fair market values of such assets and liabilities and, accordingly, such amounts have not been adjusted in the accompanying pro forma financial statements. The excess purchase price over net assets acquired resulting from the Dames & Moore acquisition will be amortized on a straight-line basis over 40 years. (b) Reflects capitalized debt financing fees and expenses aggregating $18,000. (c) Reflects the repayment of a portion of Dames & Moore's and our debt. URS Corporation: Current......................................................... $ 16,401 Non-current..................................................... 94,408 -------- $110,809 ======== Dames & Moore: Current......................................................... $ 11,233 Non-current..................................................... 284,147 -------- $295,380 ========
(d) Reflects debt incurred as part of the Financing Plan. Notes............................................................ $200,000 Senior Secured Credit Facility: Revolving credit facility...................................... -- Term Loan A.................................................... 250,000 Term Loan B.................................................... 100,000 Term Loan C.................................................... 100,000 -------- Total new debt............................................... 650,000 Less: current portion............................................ 12,000 -------- Non-current portion.............................................. $638,000 ========
(e) Reflects equity issued as part of the Financing Plan that consists of the $100,000 RCBA Equity Investment, less $2,000 of fees and expenses. (f) Reflects the elimination of Dames & Moore's historical equity. UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
Six Months Six Months Ended Ended Six Months Ended April 30, 1999 March 26, 1999 April 30, 1999 --------------- -------------- ------------------------- URS Corporation Dames & Moore Adjustments Pro Forma --------------- ------------- ----------- --------- (dollars in thousands) Revenue $ 415,069 $577,211 $ -- $ 992,280 ---------- -------- --------- ---------- Expenses: Direct operating....... 239,151 393,374 -- 632,525 Indirect, general and administrative........ 141,006 145,757 -- 286,763 Depreciation and amortization.......... 7,731 10,696 1,130 (a) 19,557 Interest expense....... 5,739 11,239 14,157 (b) 31,135 Interest income........ (1,025) (1,098) -- (2,123) ---------- -------- --------- ---------- Total expenses....... 392,602 559,968 15,287 967,857 ---------- -------- --------- ---------- Income (loss) before taxes and preferred stock charges......... 22,467 17,243 (15,287) 24,423 Income tax expense (benefit)............. 9,800 7,094 (6,514)(c) 10,380 Preferred stock charges............... -- -- 9,500 (d) 9,500 ---------- ------- --------- ---------- Earnings (loss) available for common stockholders......... $ 12,667 $ 10,149 $(18,273) $ 4,543 ========== ======== ======== ========== Earnings per Share: Earnings available for common stockholders per Share - Basic $ .83 $ .30 ========== ========== Earnings available for common stockholders per Share - Diluted $ .77 $ .27 ========== ========== Weighted average common Shares outstanding-Basic 15,325,000 15,325,000 ========== ========== Weighted average common Shares outstanding-Diluted 16,542,000 16,542,000 ========== ==========
See Notes to Unaudited Pro Forma Combined Statements of Operations UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
Twelve Months Ended Seven Months ----------------------------- Ended October 31, December 25, July 31, Twelve Months Ended 1998 1998 1998 October 31, 1998 --------------- ------------- ------------ --------------------------- URS Corporation Dames & Moore Radian Adjustments Pro Forma --------------- ------------- ------------ ----------- ---------- (dollars in thousands) Revenue................. $ 805,946 $921,133 $168,105 $ -- $1,895,184 ---------- -------- -------- -------- ---------- Expenses: Direct operating....... 478,640 629,803 112,172 -- 1,220,615 Indirect, general and administrative........ 262,509 254,271 64,020 (28,276)(e) 552,524 Depreciation and amortization.......... 14,556 16,328 6,267 2,915 (a) 40,066 Interest expense....... 10,931 15,544 1,448 34,347 (b) 62,270 Interest income........ (2,157) (888) -- -- (3,045) ---------- -------- -------- -------- ---------- Total expenses........ 764,479 915,058 183,907 8,986 1,872,430 ---------- -------- -------- -------- ---------- Income (loss) before taxes and preferred stock charges......... 41,467 6,075 (15,802) (8,986) 22,754 Income tax expense (benefit)............. 18,800 4,045 408 (13,583)(c) 9,670 Preferred stock charges............... -- -- -- (19,000)(d) (19,000) ---------- -------- -------- -------- ---------- Earnings (loss) available for common stockholders......... $ 22,667 $ 2,030 $(16,210) $(14,403) $ (5,916) ========== ======== ======== ======== ========== Earnings (loss) per Share: Earnings (loss) available for common stockholders per Share - Basic $ 1.51 $ (.40) ========== ========== Earnings (loss) available for common stockholders per Share - Diluted $ 1.43 $ (.37) ========== ========== Weighted average common Shares outstanding - Basic 14,963,000 14,963,000 ========== ========== Weighted average common Shares outstanding - Diluted 15,805,000 15,805,000 ========== ==========
See Notes to Unaudited Pro Forma Combined Statements of Operations NOTES TO UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS (dollars in thousands) (a) Reflects the elimination of goodwill amortization previously recorded by Dames & Moore and Radian and the amortization expense incurred as a result of the Dames & Moore acquisition.
Six Months Twelve Months Ended Ended April 30, October 31, 1999 1998 ---------- ------------- Elimination of Dames & Moore goodwill amortization expense............................ $(3,070) $(4,988) Elimination of Radian goodwill amortization expense......................................... -- (497) New goodwill amortization expense................ 4,200 8,400 ------- ------- $ 1,130 $ 2,915 ======= =======
(b) Reflects estimated interest expense associated with debt incurred as part of the Financing Plan and estimated amortization of debt financing costs.
Six Months Twelve Months Ended Ended April 30, October 31, 1999 1998 ---------- ------------- Increase in interest expense........................ $14,157 $34,347 ======= =======
Variable Variable Variable Interest Interest at Interest Range Current/ Range Anticipated 125 basis Anticipated 125 basis Debt Instrument Rate Amount points below Rate points above --------------- ----------- -------- ------------ ----------- ------------ Existing debt to remain outstanding: Interest expense....... -- -- $ 2,825 $ 2,825 $ 2,825 New debt: Notes.................. 10.50% $200,000 20,750 21,000 21,250 Senior Secured Credit Facility: Revolving credit facility............. 7.81% -- -- -- -- Term Loan A........... 7.81% 250,000 19,213 19,525 19,838 Term Loan B........... 8.31% 100,000 8,185 8,310 8,435 Term Loan C........... 8.81% 100,000 8,685 8,810 8,935 Amortization of debt financing costs....... -- -- 1,800 1,800 1,800 ------- ------- ------- Annual interest expense............... -- -- $61,458 $62,270 $63,083 ======= ======= ======= Semi-annual interest expense............... -- -- $30,729 $31,135 $31,542 ======= ======= =======
(c) Reflects the tax effect of all adjustments at an assumed effective tax rate of 42.5%. (d) Reflects preferred stock charges related to equity issued as part of the Financing Plan consisting of the RCBA Equity Investment.
Six Months Twelve Months Ended Ended April 30, October 31, 1999 1998 ---------- ------------- Series A Preferred Stock dividend................... $7,500 $15,000 Series C Preferred Stock accretion.................. 2,000 4,000 ------ ------- $9,500 $ 9,000 ====== =======
NOTES TO UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS--(CONTINUED) (dollars in thousands) In connection with the RCBA Equity Investment, we will issue 46,083 shares of Series A Preferred Stock and 450,000 shares of Series C Preferred Stock. The Series A Preferred Stock carries a cumulative paid-in-kind dividend rate of 8% for the first six months after its issuance and 15% thereafter. If stockholder approval of the issuance of the Series B Exchangeable Convertible Preferred Stock is not obtained within six months after the issuance of the Series A Preferred Stock, the dividend rate for the Series A Preferred Stock will be recalculated and paid as if the dividend rate was 15% from its issuance. However, we anticipate that the Series A Preferred Stock together with the Series C Preferred Stock will be exchanged for newly issued Series B Exchangeable Convertible Preferred Stock, subject to stockholders' approval. The Series B Exchangeable Convertible Preferred Stock will be convertible, voting preferred with a cumulative paid-in-kind dividend rate of 8%. The annual Series A Preferred Stock paid-in-kind dividend of $15,000 has been reflected in the pro forma income statements as a reduction in income available to common stockholders. The Series C Preferred Stock does not pay a current dividend; however, because it is mandatorily redeemable in six years, its value results in an accretive charge of $4,000 annually. (e) Reflects reversal of non-recurring acquisition-related restructuring costs and other charges included in Dames & Moore's historical results of operations. -----END PRIVACY-ENHANCED MESSAGE-----