Back to GetFilings.com
1994
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark one)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1994
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from __________________ to __________________
Commission File Number 1-7463
JACOBS ENGINEERING GROUP INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-4081636
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
251 SOUTH LAKE AVENUE, PASADENA, CALIFORNIA 91101
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code (818) 449-2171
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
------------------- -------------------
Common Stock, $1 par value New York Stock Exchange
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. ( X ) YES ( ) NO
INDICATE BY CHECK-MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405
OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE
BEST OF THE REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION
STATEMENTS INCORPORATED BY REFERENCE IN PART III OF FORM 10-K OR ANY AMENDMENT
TO THIS FORM 10-K. ( )
___________________
The aggregate market value of the Registrant's voting stock held by non-
affiliates was approximately $357,636,000 as of December 27, 1994, based upon
the last reported sales price on the New York Stock Exchange. For this purpose,
the Registrant considers Dr. Joseph J. Jacobs to be its only affiliate.
As of December 27, 1994, the Registrant had outstanding 25,080,547 shares of its
common stock.
DOCUMENTS INCORPORATED BY REFERENCE
Part II: Annual Report for the fiscal year ended September 30, 1994, only
portions of which are incorporated by reference.
Part III: Proxy Statement for the Annual Meeting of Shareholders to be filed
with the Securities and Exchange Commission within 120 days after the close of
the Registrant's fiscal year, only portions of which are incorporated by
reference.
================================================================================
PART I
ITEM 1. BUSINESS
GENERAL
- -------
Jacobs Engineering Group Inc. (the "Company" ) is one of the largest
professional service firms in the United States providing engineering, design
and consulting services; construction and construction management services; and
process plant maintenance services to a wide range of industrial, commercial and
governmental clients throughout the United States, the United Kingdom and
Ireland.
The Company has focused its services on selected industry groups and
markets including the process industries (primarily for the refining, chemical,
foods, pharmaceutical and biotechnology, and minerals and fertilizers
industries); environmental applications and projects; and facilities
(principally for high technology industries such as electronics and micro-
electronics, as well as health care and food processing facilities, commercial
and municipal buildings and other industrial projects). As discussed in the
section "Recent acquisitions", below, the Company completed the acquisition of
two businesses in 1994 which added the pulp and paper market to the collection
of process industries to which the Company provides its services, as well as
expanding the Company's customer base in the area of facilities construction,
particularly in the micro-electronics, transportation, civic and health care
markets.
The Company is a Delaware corporation and was originally incorporated
in 1957 as a successor to a business organized by Dr. Joseph J. Jacobs in 1947.
The Company's common stock has been publicly held since 1970 and currently is
listed on the New York Stock Exchange.
RECENT ACQUISITIONS
- -------------------
During fiscal 1993 and 1994, the Company completed several significant
business acquisitions. In January 1993, the Company acquired H&G Process
Contracting Limited and H&G Contractors Limited (together, "Humphreys &
Glasgow" ), based in England. Humphreys & Glasgow has broad-based process
engineering and design skills in the areas of refining, petrochemicals, fine
chemicals, pharmaceuticals and, until the fourth quarter of fiscal 1994, water
treatment facilities. In June 1993, the Company acquired the Sigel Group of
companies (the "Sigel Group"), based in Philadelphia, Pennsylvania. The Sigel
Group provides engineering and design services to clients primarily in the
biotechnology/pharmaceutical industry worldwide. In September 1993, the Company
acquired Wolder Engineers and Constructors (the "Wolder Group" ), based in Long
Beach, California. The Wolder Group provides engineering, design, construction
and construction management services to clients primarily in the petroleum
refining, gas transmission, chemical and mining businesses. And finally, in July
1994, the Company acquired the engineering and construction management services
businesses from CRSS Inc. (the engineering business is referred to as "Sirrine"
and the construction management business is referred to as "CRSS Constructors"
). These businesses provide comprehensive design, engineering and construction
management services to government and commercial customers in the pulp and
paper, micro-electronics, transportation and facilities markets, among others,
throughout the continental United States.
Management believes each of these acquisitions provides the Company
with long-term strategic growth opportunities. As a result of these
acquisitions, the Company now has established operations in new geographic
markets and added to the range of services it can provide its clients. The
Company has also added to its customer base, as well as to the industry groups
and markets to which it can provide its services.
Page 1
Following the acquisitions of Sirrine and CRSS Constructors, management
implemented, in the fourth quarter of fiscal 1994, a plan to consolidate certain
of its offices. Management also reviewed where certain projects were being
executed, particularly those projects in the area of bulk chemical processing,
and decided to transfer selected projects to other offices within the Company.
Concurrent with these actions, management undertook to evaluate the Company's
continuing business activities relating to a joint venture in the UK. Lastly,
management reviewed the realizability of certain assets the Company acquired in
recent years and wrote-down the carrying value of these assets to their
estimated net realizable values. As a result of these actions, the Company
recorded in the fourth quarter of 1994 a total after-tax charge of approximately
$10.2 million ($0.40 per share). Of the total charge recorded, approximately
$8.6 million ($0.34 per share) related to the consolidation and cost reduction
activities discussed above, and approximately $1.6 million ($0.06 per share)
related to certain third-party claims and litigation that were settled during
the fourth quarter of 1994. For further discussion of this charge, refer to
Management's Discussion and Analysis of Financial Condition and Results of
Operations included in Item 7., below.
SERVICES PROVIDED
- -----------------
The Company offers three broad categories of professional services:
engineering (which includes design, consulting and other related services);
construction and construction management; and plant maintenance. Often, Jacobs
establishes a relationship with a client where it is awarded a contract for the
initial phases of an engineering and/or construction project. These services
may include feasibility studies, consulting or design work. Because of the
range of technical expertise the Company possesses, it is often retained for
additional work as the project develops. The scope of services provided by the
Company, therefore, ranges from consulting to complete single-responsibility
contracts.
The following table sets forth the total revenues of the Company from
each of its three basic service categories for the five years ended September
30, 1994 (in thousands of dollars):
1990 1991 1992 1993 1994
------------ ------------ ------------ ------------ ------------
Engineering $241,187 $313,849 $355,483 $453,247 $476,491
Construction 414,980 499,081 503,406 424,259 456,750
Maintenance 225,590 223,359 247,538 265,420 232,513
------------ ------------ ------------ ------------ ------------
$881,757 $1,036,289 $1,106,427 $1,142,926 $1,165,754
============ ============ ============ ============ ============
Engineering
-----------
The Company employs all of the engineering and related disciplines to
engineer and design modern process plants (which include projects for clients in
such industries as refining, chemical, foods, pharmaceutical and biotechnology,
pulp and paper and minerals and fertilizers) and high technology facilities
(such as micro-electronics plants, specialized plants for clients in the food
industry, commercial and municipal buildings, research and development
facilities that require technically complex structures such as "clean rooms" and
other industrial projects).
With respect to the environmental area, the Company employs all of the
requisite engineering, scientific, public health and related skills to consult,
investigate, study, manage and provide remedial engineering for major
environmental programs. The Company's capabilities in process engineering and
construction combined with its environmental expertise allow it to offer its
clients a wide range of services from a single-source provider. Accordingly, the
Company has been awarded contracts requiring a combination of traditional
process engineering and environmental services.
Page 2
Additionally, the Company employs all of the professional and technical
expertise necessary to provide a broad range of consulting services including:
performing pricing studies, market analyses and financial projections necessary
in determining the feasibility of a project; performing gasoline reformulation
modeling; analyzing and evaluating layout and mechanical designs for complex
processing plants; analyzing automation and control systems; analyzing,
designing and executing biocontainment strategies; developing and performing
process protocols in respect of Federal Drug Administration mandated
qualification/validation requirements; and performing geological and
metallurgical studies.
Also included in the category of "Engineering" are all of the related
support services necessary for the proper and effective delivery of the
Company's engineering and related services. Among these are cost engineering,
planning, scheduling, procurement, estimating, project accounting, quality and
safety.
Construction
------------
The Company provides traditional field construction as well as
construction management services to private and public sector clients in many of
the process and facilities industries serviced by the Company. The Company can
also provide its clients with Advanced Construction Technology ( "ACT" )(R).
ACT is an advanced form of modular engineering, design, off-site fabrication and
assembly, and field erection. ACT provides clients with an alternative approach
to traditional methods of engineering and construction which can significantly
reduce new plant costs. In the environmental area recent contract awards from
clients in the public sector require the Company to provide environmental
remedial construction services. The Company believes the environmental remedial
construction market will continue to grow in the future as more resources are
committed to actual site clean-up.
The Company's field construction activities are focused primarily on
process plant and facilities construction projects for which the Company has
performed the engineering and design work. By focusing its construction efforts
on such projects, the Company avoids the risk of constructing complex plants
based on designs prepared by others. The financial risk to the Company of
constructing complex plants based on designs prepared by third parties may be
particularly significant on fixed-price contracts. On the other hand, the
Company believes the integration of its services (i.e., providing design,
engineering and construction services on the same project) provides the Company
greater opportunity to price its services more competitively and can enhance its
overall contract profitability. From the customers' perspective, the Company
believes that the integration of its services provides them with a competitive
advantage as they can look to the Company as a single-source provider of
design/build services. However, the Company will continue to pursue
construction-only projects where it can negotiate pricing and other contract
terms acceptable to the Company.
In the area of construction management, the Company can provide a wide
range of services to its customers. The Company may act as the program director,
whereby it oversees, on behalf of the owner of the project, the complete
planning, design and construction phases of the project. Or, its services may be
limited to providing construction consulting, estimating, scheduling or value
engineering services. The Company believes its capabilities in the area of
construction management were greatly enhanced during 1994 when it completed the
acquisition of CRSS Constructors. As a result of this acquisition, the Company
has broadened its geographic presence and expanded both its client base and the
industry groups to which it can provide and market its construction management
services.
Maintenance
-----------
Maintenance generally refers to all of the tasks required to keep a
plant in day-to-day operations, including the repair and replacement of pumps,
piping, heat exchangers and other equipment. It also includes "turnaround" work
which involves major refurbishment which can only be performed when the plant is
shut down. Since shutdowns are expensive to the owners of the plant, turnaround
work will often require maximizing the number of craftsmen that can work
efficiently on a project on a 24 hours per day, seven days per week basis. The
Company employs sophisticated computer scheduling and programming to complete
turnaround projects quickly and it maintains contact with a large pool of
skilled craftsmen it can hire as needed on maintenance and turnaround projects.
Page 3
Although the profit margins that can be realized from maintenance
services are generally less than engineering and construction services, the
costs to support maintenance activities are also generally lower than
engineering and construction services. The Company remains active in this
business because it sometimes leads to contracts to provide engineering and/or
construction services. Furthermore since maintenance contracts are normally
cost-reimbursable in nature, they present less risk to the Company.
Additionally, although engineering and construction projects may be of a short-
term nature, maintenance services often result in long-term relationships with
clients. For example, the Company has been providing maintenance services at
several major process plants for over 25 years. This aspect of maintenance
services greatly reduces the selling costs in respect of such services.
INDUSTRY GROUPS AND MARKETS
- ---------------------------
The Company has chosen to focus its efforts on the following industry
groups and markets: environmental, refining, chemical and pharmaceutical,
facilities, and minerals and fertilizers. With the acquisition of Sirrine in
1994, the Company now provides engineering and construction management services
to the pulp and paper industry. The Company believes these industry groups and
markets have sufficient common needs to permit cross-utilization of the
Company's resources which help to mitigate the negative effects of a downturn in
a single industry.
The following table sets forth the total revenues of the Company from
each of these industry groups and markets for the five years ended September 30,
1994 (in thousands of dollars):
1990 1991 1992 1993 1994
-------- ---------- ---------- ---------- ----------
Environmental $39,407 $67,940 $105,608 $161,964 $175,846
Refining 172,705 216,865 362,005 404,462 372,769
Chemical and
pharmaceutical 388,813 419,311 351,336 386,522 415,062
Facilities 250,136 308,805 224,822 158,217 177,193
Minerals and
fertilizers 30,696 23,368 62,656 31,761 24,884
-------- ---------- ---------- ---------- ----------
$881,757 $1,036,289 $1,106,427 $1,142,926 $1,165,754
======== ========== ========== ========== ==========
The Company historically has provided primarily engineering services to
the environmental group. However, certain of the more recent contracts awarded
to the Company also include management services for the remediation of hazardous
wastes. Maintenance services are provided primarily to the chemical and refining
industries.
Environmental
-------------
The Company believes it is one of the leading providers in the United
States of environmental engineering and consulting services, including hazardous
waste management and cleanup. The environmental business currently represents an
important part of the Company's operations and, as a result of growing public
concern over the nation's environment, combined with increased legislation
regarding the environmental obligations of companies in the private sector, the
Company believes demand for environmental services will continue to grow.
The Company is currently providing environmental services for a number of
U.S. federal government agencies including the Department of Energy; the
Department of Defense; and the Environmental Protection Agency. In the private
sector, the Company provides consulting, environmental studies, remedial design
and project management services, such as the design and construction of waste
minimization programs relating to existing process plants, and the design and
construction of waste and wastewater treatment facilities. Additionally, the
Company provides engineering, design and related technical services for large,
complex water purification systems.
Page 4
Typical projects for the U.S. government include the preparation of
feasibility studies and performing remedial investigation, engineering and
design services on several national programs. Many of the Company's contracts
relate to the Comprehensive Environmental Response Compensation and Liability
Act of 1980 ("CERCLA" or "Superfund") and the related Superfund Amendments and
Reauthorization Act of 1986 ("SARA"), as reauthorized in 1990. More recently,
the Company has been awarded multi-year contracts from the U.S. Air Force to
provide full-service remedial action services for the U.S. Air Force Center for
Environmental Excellence ("AFCEE") at several bases located in the U.S., as well
as a "nationwide" award to provide services under the U.S. Base Realignment and
Closure ("BRAC") program. The Company also provides project management services
over site cleanup activities at various government installations, as well as
detailed scientific and support services, groundwater restoration management and
action plans, and services relating to the decommissioning of nuclear production
and armament facilities.
Many of the projects for the U.S. government span several years. For
larger programs, the scope of services are such that the Company sometimes teams
with other companies in order to execute the project.
Within the private sector, the Company provides consulting, design,
engineering, procurement, construction and project management services to
clients on projects involving waste minimization programs, waste treatment and
other facilities.
The Company believes the acquisition of Humphreys & Glasgow greatly
enhanced its capabilities in the area of environmental engineering and waste
management. Its experience includes both government and private-sector projects
in the areas of facility decommissioning, waste packaging, robotics,
solidification and encapsulation. Recent awards to Humphreys & Glasgow require
developing the process design of plants to vitrify certain types of contaminated
wastes. Such applications of vitrification technology is currently planned for
use by certain of the Company's clients in the United States.
Refining
--------
The Company provides its full line of services to its clients in the
refining industry. Typical projects in the refining area include retrofits,
revamps or expansion of existing plants, upgrading individual process units
within refineries, new construction and maintenance services. The Company also
provides a broad range of consulting services to its clients, including
feasibility and multi-client studies.
Over the past several years, the Company has experienced a significant
increase in contract awards for plants producing oxygenates and other high-
octane fuel blending components for gasoline (such components are required by
the Clean Air Act of 1990 in reformulated gasolines in order to reduce the
emissions of unburned hydrocarbons and carbon monoxide from automobiles), as
well as plants that hydrotreat various fuel fractions to reduce the sulfur
content of blended products. The Company has completed several major projects to
design, engineer, procure and construct methyl tertiary butyl ether ("MTBE")
units and tertiary amyl butyl ether ("TAME") units for a number of major
refiners at facilities located throughout the United States. The Company has
also utilized its modular construction capabilities in the construction and
installation of these units. The use of modular construction can help decongest
the construction site and allow for parallel construction to proceed
simultaneously with the modular activity.
A significant aspect of the Company's service to this industry is in the
area of contract maintenance. The Company has contracts with several major oil
refiners for on-site maintenance and turnaround activities. Many of these
contracts are evergreen in nature and tend to be extended over many years.
Page 5
The Company believes its capabilities in the refining area in the West
Coast market were greatly enhanced during 1993 when it completed the acquisition
of the Wolder Group. As a result of the acquisition, the Company has broadened
its geographic presence with access to both new and existing clients.
Chemical and pharmaceutical
---------------------------
The Company furnishes its full line of services to its clients operating
in the chemical, pharmaceutical and biotechnology industries. Typical projects
in the chemical area include bulk chemical production facilities involving
various petrochemicals, aromatics and derivatives, monomers and polymers. In the
pharmaceutical and biotechnology area, typical projects include sterile fill,
pharmaceutical manufacturing facilities and biotechnology laboratories and pilot
plants. Also included in this category of business are process projects for
clients in the food industry and, beginning August 1, 1994, the pulp and paper
industry. The Company's capabilities in the pulp and paper industry result from
the acquisition of Sirrine. The Company believes Sirrine to be one of the
leading providers of engineering and design services to U.S. customers in the
pulp and paper industry.
The Company also enhanced its capabilities in the pharmaceutical and
biotechnology area as a result of the acquisition of the Sigel Group in June
1993. When combined with the Company's traditional process engineering and
project management skills and the technical and other capabilities acquired as a
result of the acquisition of Triad Technologies, Inc. in 1991, the Company
believes it is now capable of executing multi-million dollar, single-
responsibility projects in the areas of pharmaceuticals and biotechnology.
Accordingly, the Company believes it is a national leader in providing not only
engineering, design and construction services, but also conceptual design
services with emphasis on production strategy, current good manufacturing
practices ("cGMP") compliance, regulatory compliance and
qualification/validation services for pharmaceutical and biotechnology research,
development and production facilities.
Facilities
----------
"Facilities" refers to those contracts requiring the Company to provide
comprehensive architectural, engineering, design, construction and/or
construction management services for projects such as high technology
manufacturing operations in the electronics, micro-electronics and aerospace
industries, specialized plants for clients in the food industry, research and
development facilities that require technically complex structures such as
"clean rooms", correctional facilities, health care facilities and
transportation systems, as well as multi-purpose buildings for industrial,
commercial and government clients.
The Company believes its capabilities in the facilities area were greatly
enhanced during 1994 when it completed the acquisition of Sirrine and CRSS
Constructors. Sirrine's experience in the domestic, U.S. micro-electronics
industry complemented the Company's experience in foreign markets. CRSS
Constructors greatly expanded the Company's capabilities to provide construction
management services for customers in the health care, transportation,
correctional and civic industries/markets.
Minerals and fertilizers
------------------------
For over 25 years, the Company has been a leading provider of
engineering, design and construction services on projects for phosphatic and
potassium fertilizer plants, coal handling facilities, and facilities for the
mining and processing of a wide range of minerals. Additionally, the Company
provides a broad range of consulting services to the fertilizers industry world
wide and believes it possesses the world's leading process technology in the
area of phosphatic fertilizers. The Company believes that demand for services by
companies in this industry will grow in the future.
BACKLOG
- -------
For information regarding the Company's backlog, reference should be made
to Item 7. - Management's Discussion and Analysis of Financial Condition and
Results of Operations, incorporated by reference in this report.
Page 6
CUSTOMERS
- ---------
For the years ended September 30, 1990, 1991, 1992, 1993 and 1994,
revenues from federal government agencies accounted for 4.9%, 6.3%, 9.4%, 14.1%
and 15.4%, respectively, of total revenues. Due to the amount of pass-through
costs (see "Contracts" below) that may be incurred on construction projects,
it is not unusual for a customer in the private sector to account for more than
ten percent of revenues in any given year. For the years ended September 30,
1990, 1991 and 1992, one customer in the private sector accounted for 14.7%,
11.4% and 12.5%, respectively, of total revenues (a second customer accounted
for 10.8% of total revenues in 1992). No single customer in the private sector
accounted for ten percent or more of total revenues in 1993, and a different
customer accounted for 11.6% of total revenues in 1994.
The Company's success in obtaining more than one contract from its
clients significantly minimizes its selling and related management expenses.
Over the past five years, a significant portion of the Company's revenues has
represented work for clients for which the Company has performed at least one
prior contract. The Company believes that the amount of repeat business
demonstrates that a majority of the Company's clients have a high level of
satisfaction with the Company's services.
FOREIGN OPERATIONS
- ------------------
For the years ended September 30, 1990, 1991, 1992, 1993 and 1994,
revenues from projects outside of North America were approximately 7.1%, 8.4%,
16.3%, 10.8% and 5.6%, respectively, of total revenues. For the years ended
September 30, 1992 and prior, substantially all such revenues related to the
Company's offices in Ireland. For the year ended September 30, 1993, such
revenues related primarily to the Company's offices in the UK and Ireland.
The increase in revenues from projects outside North America from 1991 to
1992 was due primarily to a large construction project executed out of the
Company's Dublin office and included a substantial portion of "pass-through"
costs (see "Contracts" below). That project was completed early in fiscal 1993.
CONTRACTS
- ---------
While there is considerable variation in the pricing provisions of the
contracts undertaken by the Company, they can generally be grouped into three
broad categories: Cost-plus; guaranteed maximum price and fixed-price. The
following table sets forth the percentages of total revenues represented by
these types of contracts during the five years ended September 30, 1994:
1990 1991 1992 1993 1994
---- ---- ---- ---- ----
Cost-plus 69% 79% 87% 90% 83%
Guaranteed maximum price 11 2 4 3 8
Fixed-price 20 19 9 7 9
In accordance with industry practice, most of the Company's contracts are
subject to termination at the discretion of the client. Contracts typically
provide for reimbursement of costs incurred and payment of fees earned through
the date of such termination.
When the Company is directly responsible for engineering, design,
procurement and construction of a project or the maintenance of a process plant,
the Company reflects the cost of materials and equipment, craft labor and
subcontracts in both revenues and costs. On other projects, where the client
elects to pay for such items directly, these amounts are not reflected in either
revenues or costs. The approximate amounts of such pass-through costs included
in revenues for the years ended September 30, 1990, 1991, 1992, 1993 and 1994
were $560.3 million, $641.9 million, $659.2 million, $610.7 million and $629.0
million, respectively.
Page 7
Cost-plus contracts
-------------------
Cost-plus contracts provide for reimbursement of costs incurred by the
Company plus a predetermined fee, or a fee based on a percentage of the costs
incurred. The Company prefers this type of contract since it believes that the
primary basis for its selection should be its technical expertise and
professional qualifications rather than price considerations.
Guaranteed maximum price contracts
----------------------------------
Guaranteed maximum price contracts are performed in the same manner as
cost-plus contracts; however, the total actual cost plus the fee cannot exceed
the guaranteed price negotiated with the customer. If the total actual cost of
the contract exceeds the guaranteed maximum price, then the Company will bear
all or a portion of the excess. In those cases where the total actual cost and
fee are less than the guaranteed price, the Company will share the savings on a
predetermined basis with the client.
Fixed-price contracts
---------------------
Fixed-price contracts include both "negotiated fixed-price" contracts
and "lump sum bid" contracts. Under a negotiated fixed-price contract, the
Company is first selected as the contractor, and then the contract price is
negotiated. Negotiated fixed-price contracts frequently exist in single-
responsibility arrangements where the Company has the opportunity to perform
engineering and design work before negotiating the price. Under lump sum bid
contracts, the Company must bid against other contractors based upon
specifications furnished by the customer. This type of pricing presents certain
inherent risks, including the possibility of ambiguities in the specifications,
problems with new technologies and economic and other changes that may occur
over the contract period, that are reduced by the negotiation process. Thus,
although both types of contracts involve a firm price for the customer, the lump
sum bid contract provides the greater degree of risk to the Company. However,
because of economies that may be realized during the contract term, both
negotiated fixed-price and lump sum bid contracts may offer greater profit
potential than the other types of contracts.
COMPETITION
- -----------
The Company is engaged in a highly competitive business. Some of its
competitors are larger than the Company, or are subsidiaries of larger
companies, and possess greater resources than the Company. Furthermore, because
the engineering aspect of the business does not usually require large amounts of
capital, there is relative ease of market entry for a new potential entrant
possessing acceptable professional qualifications. Accordingly, the Company
competes with both national and international firms in sizes ranging from very
large to a wide variety of small, regional and specialty firms.
The extent of the Company's competition varies according to the
industries and markets it serves, as well as the regions in which the Company is
located. The Company's largest competitors for engineering, construction and
maintenance services for process plants include such well-known companies as
Bechtel Group, Inc., Fluor Corp., Foster-Wheeler Corp., M.W. Kellogg, Parsons
Co., Brown & Root, Inc. and Morrison Knudsen Corp. The Company's principal
competitors for facilities work include Turner Construction Co., The Austin Co.,
ADP/Marshall and IDC.
In the area of environmental engineering and hazardous waste cleanup, the
Company's competitors include a number of the companies listed above and other
specialized companies such as IT Corporation, ICF Kaiser, Metcalf & Eddy, CDM,
OHM, Rust Engineering, Montgomery Engineers, Ogden Environmental and Roy F.
Weston, Inc.
EMPLOYEES
- ---------
At September 30, 1994, the Company had approximately 6,940 full-time
employees. Additionally, as of September 30, 1994, there were also approximately
6,200 persons employed in the field on a short-term or project basis by the
Company. The number of such field employees varies in relation to the number and
size of the maintenance and construction projects in progress at any particular
time.
Page 8
EXECUTIVE OFFICERS OF THE COMPANY
Pursuant to the requirements of Item 401(b) and 401(e) of Regulation S-K,
the following information is being furnished with respect to the Company's
executive officers:
Year Joined
the Registrant
or a Company
Acquired by
Name Age Position with the Company the Registrant
- ------------------------ --- ----------------------------------- ------------------
Joseph J. Jacobs 78 Director and Chairman of the Board 1947
Noel G. Watson 58 President, Chief Executive Officer
and Director 1965
Robert M. Barton 72 Secretary and Director 1957
William R. Kerler 65 Executive Vice President, Operations 1980
James E. Berkley 61 Executive Vice President, Operations 1962
Donald J. Boutwell 57 Group Vice President, Field Services 1984
Andrew E. Carlson 61 Group Vice President, Field Services 1990
Socrates S. Christopher 59 President, Jacobs - Sirrine Engineers
(a Division of Jacobs Engineering
Group Inc.) 1994
Arlan C. Emmert 49 Group Vice President, Western Region 1985
Thomas R. Hammond 43 Group Vice President, Central Region 1975
John McLachlan 48 Group Vice President, Northern Region 1974
Richard J. Slater 48 Group Vice President, European Region 1980
Roger L. Williams 56 Group Vice President, Southern Region 1983
Gregory J. Landry 46 Senior Vice President, Quality and Safety 1984
Craig L. Martin 45 Senior Vice President, Operations 1994
Paul A. Miskimin 54 Senior Vice President, Federal Programs 1987
John W. Prosser, Jr. 49 Senior Vice President, Finance and 1974
Administration and Treasurer
Gerald L. Stevenson 57 Senior Vice President, General Sales
and Marketing 1984
Nazim G. Thawerbhoy 47 Senior Vice President and Controller 1979
William C. Markley, III 49 Vice President, Law 1981
All of the officers listed in the preceding table serve in their
respective capacities at the pleasure of the Board of Directors and, with the
exception of Messrs. Carlson, Christopher and Martin, have served in executive
capacities with the Company or have been part of its senior management for more
than five years. Prior to joining the Company, Mr. Carlson served as President
of Continental Heller Corporation from November 1986 to May 1990. Prior to
joining the Company, Messrs. Christopher and Martin had been part of the senior
management of CRSS Inc. or one of its subsidiaries for at least five years.
Page 9
ITEM 2. PROPERTIES
The Company maintains offices for its professional, technical and
administrative staff consisting of a total of approximately 1.4 million square
feet, in Pasadena, Long Beach and Martinez, California; Cincinnati, Ohio;
Lakeland, Florida; Somerset, New Jersey; Houston, Texas; Baton Rouge, Louisiana;
Greenville and Orangeburg, South Carolina; Raleigh, North Carolina; Portland,
Oregon; Phoenix, Arizona; New Castle, Delaware; Washington, D.C.; Albuquerque,
New Mexico; Denver and Golden, Colorado; Philadelphia, Pennsylvania; Dublin and
Cork, Ireland; London, Manchester, and Glasgow, United Kingdom; and project
offices throughout the United States. The Company maintains sales offices at
many of its principal locations. The Company's equipment yards are located in
Houston, Texas and Baton Rouge, Louisiana.
The majority of the Company's offices are leased. The Company also rents
its project offices and a portion of its construction equipment on a short-term
basis.
ITEM 3. LEGAL PROCEEDINGS
The Company is a defendant in numerous workers' compensation, personal
injury and other lawsuits arising in the normal course of its business. These
matters are covered by either insurance provided by third parties, the Company's
self-insurance programs, or a combination thereof. The Company believes that the
results of this litigation will not have a material adverse effect on its
consolidated financial condition. However, there can be no assurance that this
will be the case.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The information required by this Item is hereby incorporated by reference
from the Financial Statements section of the Company's 1994 Annual Report to
Shareholders, copies of which financial statements section is being delivered to
the Commission (but not filed with, except to the extent incorporated herein) as
an Exhibit to this report.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this Item is hereby incorporated by reference
from the Financial Statements section of the Company's 1994 Annual Report to
Shareholders, copies of which are being delivered to the Commission (but not
filed with, except to the extent incorporated herein) as an Exhibit to this
report.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information required by this Item is hereby incorporated by reference
from the Financial Statements section of the Company's 1994 Annual Report to
Shareholders, copies of which are being delivered to the Commission (but not
filed with, except to the extent incorporated herein) as an Exhibit to this
report.
Page 10
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item is hereby incorporated by reference
from the Financial Statements section of the Company's 1994 Annual Report to
Shareholders, copies of which are being delivered to the Commission (but not
filed with, except to the extent incorporated herein) as an Exhibit to this
report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON FINANCIAL AND
DISCLOSURE MATTERS
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by Paragraph (a) and Paragraphs (c) through (g)
of Item 401 and by Item 405 of Regulation S-K is hereby incorporated by
reference from the Company's definitive proxy statement to be filed with the
Commission pursuant to Regulation 14A within 120 days after the close of the
Company's fiscal year.
See the information under the caption " Executive Officers of the
Company " in Part I of this report for information required by Paragraph (b) of
Item 401 of Regulation S-K.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item is hereby incorporated by reference
from the Company's definitive proxy statement to be filed with the Commission
pursuant to Regulation 14A within 120 days after the close of the Company's
fiscal year.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item is hereby incorporated by reference
from the Company's definitive proxy statement to be filed with the Commission
pursuant to Regulation 14A within 120 days after the close of the Company's
fiscal year.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item is hereby incorporated by reference
from the Company's definitive proxy statement to be filed with the Commission
pursuant to Regulation 14A within 120 days after the close of the Company's
fiscal year.
Page 11
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) See accompanying Index to Financial Statements and Supporting
Schedules.
(b) Reports on Form 8-K: On August 5, 1994, the Registrant filed a
Current Report on Form 8-K reporting the acquisition of the
engineering and construction management services businesses of CRSS
Inc. On October 6, 1994, the Registrant filed Report 8-K/A to file
with the Commission certain audited financial statements and pro
forma financial information relating to said acquisition.
(c) Exhibits and Index to Exhibits:
2.1 Purchase Agreement dated July 29, 1994 between Jacobs
Engineering Group Inc. and CRSS Inc. including a schedule
of annexes and exhibits. Filed as Exhibit 1. to the
Registrant's Current Report on Form 8-K dated August 5,
1994 and incorporated herein by reference.
3.1 Certificate of Incorporation of the Registrant, as amended.
Filed as Exhibit 3.1 to the Registrant's 1993 Annual Report
on Form 10-K and incorporated herein by reference.
3.2 Bylaws of the Registrant, as amended. Filed as Exhibit 3.2
to the Registrant's 1992 Annual Report on Form 10-K and
incorporated herein by reference.
4.1 See Sections 5 through 18 of Exhibit 3.1.
4.2 See Article II, Section 3.03 of Article III, Article VI and
Section 8.04 of Article VIII of Exhibit 3.2.
4.3 Specimen Certificate for Common Stock. Filed as Exhibit 4.3
to the Registrant's 1991 Annual Report on Form 10-K and
incorporated herein by reference.
4.4 Rights Agreement dated as of December 20, 1990 by and
between Registrant and First Interstate Bank, Ltd. as
Rights Agent. Filed as Exhibit (1) to Registrant's Report
on Form 8-K dated December 20, 1990 and incorporated herein
by reference.
10.1 The Jacobs Engineering Group Inc. 1981 Executive Incentive
Plan (As Amended and Restated). Filed as Exhibit 10.1 to
the Registrant's 1993 Annual Report on Form 10-K and
incorporated herein by reference.
10.2 The Jacobs Engineering Group Inc. Incentive Bonus Plan for
Officers and Key Managers. Filed as Exhibit 10.2 to the
Registrant's 1993 Annual Report on Form 10-K and
incorporated herein by reference.
10.3 Agreement dated as of November 30, 1993 between the
Registrant and Dr. Joseph J. Jacobs. Filed as Exhibit 10.3
to the Registrant's 1993 Annual Report on Form 10-K and
incorporated herein by reference.
10.4 The Executive Security Program of Jacobs Engineering Group
Inc. Filed as Exhibit 10.4 to the Registrant's 1993 Annual
Report on Form 10-K and incorporated herein by reference.
Page 12
10.5 Jacobs Engineering Group Inc. and Subsidiaries 1991
Executive Deferral Plan, effective June 1, 1991. Filed as
Exhibit 10.5 to the Registrant's 1993 Annual Report on Form
10-K and incorporated herein by reference.
10.6 Jacobs Engineering Group Inc. and Subsidiaries 1993
Executive Deferral Plan, effective December 1, 1993. Filed
as Exhibit 10.6 to the Registrant's 1993 Annual Report on
Form 10-K and incorporated herein by reference.
10.9 The Jacobs Engineering Group Inc. 1989 Employee Stock
Purchase Plan. Filed as Exhibit 4.1 to the Registrant's
Form S-8 dated February 24, 1992 (File No. 33-45927) and
incorporated herein by reference.
10.10 Form of Indemnification Agreement entered into between the
Registrant and its officers and directors. Filed as Exhibit
10.10 to the Registrant's 1992 Annual Report on Form 10-K
and incorporated herein by reference.
(S) 11. Statement of computation of net income per outstanding
share of common stock is hereby incorporated by reference
from the Financial Statements section of the Company's 1994
Annual Report to Shareholders, copies of which are being
delivered to (but not filed with, except to the extent
incorporated herein) the Commission as an exhibit to this
report.
(S) 13. Financial Statements section of Jacobs Engineering Group
Inc. Annual Report to Shareholders for the fiscal year
ended September 30, 1994.
(S) 21. List of Subsidiaries of Jacobs Engineering Group Inc.
(S) 23. Consent of Independent Auditors.
(S) 27.1 Financial Data Schedules.
__________________________________________
(S) Being filed herewith.
Page 13
JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS AND SUPPORTING SCHEDULES
SEPTEMBER 30, 1994
PAGE
- ---------------------------------------------------------------------------------------------
Financial Statements:
The Company's consolidated financial statements at September 30, 1994 and
1993 and for each of the three years in the period ended September 30,
1994, together with the report of the independent auditors on those
consolidated financial statements are hereby incorporated by reference
from the Financial Statements section of the Company's 1994 Annual Report
to Shareholders, copies of which are being delivered to (but not filed
with, except to the extent incorporated herein) the Commission as an
exhibit to this report.
Schedules Supporting the Financial Statements:
(All schedules except those listed below have been omitted since they are
either not applicable, not required, or the required information is
included in the consolidated financial statements or notes thereto.)
II Amounts receivable from related parties and underwriters,
promoters, and employees other than related parties for
the years ended September 30, 1993 and 1994.............................. 15
Page 14
JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
SCHEDULE II - AMOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS,
PROMOTERS, AND EMPLOYEES OTHER THAN RELATED PARTIES
FOR THE YEARS ENDED SEPTEMBER 30, 1993 AND 1994
Balance at end
Balance Deductions of period
Name of at Beginning (amounts -----------------------------
Debtor of Period Additions collected) Current Noncurrent
---------------- ------------ ------------- ----------- -------------- ----------
September 30, 1993:
P.A. Miskimin $115,133 $ -- $3,488 $111,645 $ --
K.D. Wolder -- 344,978 -- 18,178 326,800
------------ ------------- ----------- -------------- ----------
Totals $115,133 $344,978 $ 3,488 $129,823 $326,800
============ ============= =========== ============== ==========
September 30, 1994:
P.A. Miskimin $111,645 $ -- $111,645 $ -- $ --
K.D. Wolder 344,978 -- 18,178 19,633 307,166
S.S. Christopher -- 150,000 -- -- 150,000
------------ ------------- ----------- -------------- ----------
Totals $456,623 $150,000 $129,823 $129,823 $457,166
============ ============= =========== ============== ==========
Note - The loans to K.D. Wolder and S.S. Christopher were acquired by the
Registrant as part of the assets of businesses it acquired in 1993 and
1994.
Page 15
UNDERTAKINGS
For the purposes of complying with the amendments to the rules governing
Form S-8 (effective July 13, 1990) under the Securities Act of 1933, the
undersigned Registrant hereby undertakes as follows, which undertaking shall be
incorporated by reference into the Registrant's Registration Statements on Form
S-8 Nos. 33-45914 (filed February 21, 1992) and 33-45927 (filed February 24,
1992):
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by final adjudication of such issue.
Page 16
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
JACOBS ENGINEERING GROUP INC.
Dated: December 28, 1994 By: NOEL G. WATSON
------------------------------------
Noel G. Watson
President, Chief Executive
Officer and Director
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the Company
and in the capacities and on the dates indicated:
SIGNATURE TITLE DATE
NOEL G. WATSON Director and December 28, 1994
-------------------------------- Principal Executive Officer
Noel G. Watson
JOSEPH J. JACOBS Director December 28, 1994
--------------------------------
Joseph J. Jacobs
JOSEPH F. ALIBRANDI Director December 28, 1994
--------------------------------
Joseph F. Alibrandi
ROBERT M. BARTON Director December 28, 1994
--------------------------------
Robert M. Barton
PETER H. DAILEY Director December 28, 1994
--------------------------------
Peter H. Dailey
LINDA K. JACOBS Director December 28, 1994
--------------------------------
Linda K. Jacobs
J. CLAYBURN LAFORCE Director December 28, 1994
--------------------------------
J. Clayburn LaForce
DALE R. LAURANCE Director December 28, 1994
--------------------------------
Dale R. Laurance
Director December 28, 1994
--------------------------------
David M. Petrone
JAMES L. RAINEY, JR. Director December 28, 1994
--------------------------------
James L. Rainey, Jr.
J.W. SIMMONS Director December 28, 1994
--------------------------------
J.W. Simmons
JOHN W. PROSSER, JR. Senior Vice President December 28, 1994
-------------------------------- Finance and Administration and
John W. Prosser, Jr. Treasurer (Principal
Financial Officer)
NAZIM G. THAWERBHOY Senior Vice President and December 28, 1994
-------------------------------- Controller (Principal Accounting
Nazim G. Thawerbhoy Officer)
Page 17