General Physics Corp., a Columbia-based supplier of training programs and simulators to the nuclear-power industry and the Navy, has filed with the Securities and Exchange Commission its first public offering of common stock.
The shares are expected to be offered to the public late next month. According to the prospectus, the 590,000 shares in the offer are expected to be priced at $12 to $14 apiece.
The offering will consist of 230,000 new shares of stock to be offered by the company and 360,000 shares from existing shareholders. The company says it plans to use its proceeds from the stock sale for expansion and possible acquisitions.
Following the offering, the now-closely held company will have 3.7 million shares outstanding. More than half would be held by Burns and Roe Holdings, a subsidiary of Burns and Roe Inc., an international design and engineering firm specializing in power plants. Burns and Roe now holds 59 percent of General Physics.
Founded in 1966, General Physics derives most of its revenues from training operators of nuclear power plants. It builds and operates simulators of power-plant control rooms and provides other training programs for a number of utilities. Since the accident at the Three-Mile Island nuclear plant in 1979, demand for the company's services has grown, according to the prospectus for the stock offering.
"Since the accident, electric power companies that operate nuclear power plants have committed significant additional resources to insure efficient and safe operations of these plants. Regulatory requirements have increased, particularly in the area of operator training," the prospectus says."
General Physics' earnings and revenues have increased dramatically over the past few years. Last year, the company earned $2.2 million (64 cents a share) on sales of $23.7 million. Through the first nine months of this year, the company had virtually matched those figures, earning $2.4 million (69 cents) on sales of $23.2 million. Five years ago, earnings were $541,000 (16 cents) on sales of $6.97 million.
Although General Physics' business is to minimize risks, the business is not without risks of its own. "By providing services to the nuclear power industry, the company is engaged in an industry in which there are substantial risks of potential liability," the prospectus says, adding that the company's exposure to such potential liabilities is limited by government- and industry-provided insurance.
Hembrecht & Quist and Johnston, Lemon & Co. are the brokerage houses managing the stock offering.