-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, BO2J7f034TZaCnpnIBXxzJpr8hq7xq3BU2UHei/szBlQa86JbiOUpoSHJwqCuAtC E7TFoBxyz/r1o9D6oimKMg== 0000102710-95-000006.txt : 19950417 0000102710-95-000006.hdr.sgml : 19950417 ACCESSION NUMBER: 0000102710-95-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950228 FILED AS OF DATE: 19950412 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: VALLEY RESOURCES INC /RI/ CENTRAL INDEX KEY: 0000102710 STANDARD INDUSTRIAL CLASSIFICATION: 4924 IRS NUMBER: 050384723 STATE OF INCORPORATION: RI FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07924 FILM NUMBER: 95528416 BUSINESS ADDRESS: STREET 1: 1595 MENDON RD CITY: CUMBERLAND STATE: RI ZIP: 02864 BUSINESS PHONE: 4013341188 MAIL ADDRESS: STREET 1: PO BOX 7900 CITY: CUMBERLAND STATE: RI ZIP: 02864-7900 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended February 28, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-7924 VALLEY RESOURCES, INC. (Exact name of registrant as specified in its charter) Rhode Island 05-0384723 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1595 Mendon Road 02864 Cumberland, Rhode Island (Zip Code) (Address of principal executive offices) (401) 334-1188 (Registrant's telephone number, including area code) Not Applicable (Former name, former address and former fiscal year, if changed since last report) 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, and (2) has been subject to such filing requirements for the past 90 days. YES X . NO . Indicate the number of shares outstanding of each of the issuer's classes of Common Stock, as of the latest practicable date. Outstanding at Class of Common Stock February 28, 1995 $1 Par Value 4,217,599 VALLEY RESOURCES, INC. FORM 10-Q FEBRUARY 28, 1995 Page of Form 10-Q PART I: FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Condensed Statements of Operations--for the three- and six-months ended February 28, 1995 and 1994..................................................... 3 Consolidated Condensed Balance Sheets-February 28, 1995 and August 31, 1994................................. 4 & 5 Consolidated Condensed Statements of Cash Flows--for the six months ended February 28, 1995 and 1994.............. 6 Notes to Consolidated Condensed Financial Statements......... 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.......................... 8 PART II: OTHER INFORMATION Item 6. ............................................................. 9 VALLEY RESOURCES, INC. AND SUBISIDIARIES Consolidated Condensed Statements of Operations (Unaudited)
3 Months Ended 6 Months Ended Feb. 28, Feb. 28, Feb. 28, Feb. 28, 1995 1994 1995 1994 (in thousands except share and per share numbers) Operating Revenues: Utility Gas Revenues $ 21,838 $ 26,893 $ 31,818 $ 37,918 Nonutility Revenues 5,127 4,692 9,921 9,423 Total 26,965 31,585 41,739 47,341 Operating Expenses: Cost of Gas Sold 12,384 16,347 18,167 22,796 Operations 7,847 7,149 15,353 14,551 Maintenance 429 383 813 758 Depreciation and Amortization 671 631 1,352 1,263 Taxes-Other Than Income 1,276 1,411 2,152 2,403 -Federal Income 1,198 1,608 730 1,271 Total 23,805 27,529 38,567 43,042 Operating Income 3,160 4,056 3,172 4,299 Other Income-Net of Tax 35 39 39 98 Total Income 3,195 4,095 3,211 4,397 Interest Charges: Long-Term Debt 490 501 999 1,013 Other 323 186 565 352 Total 813 687 1,564 1,365 Net Income $ 2,382 $ 3,408 $ 1,647 $ 3,032 Average Number of Common Shares Outstanding 4,216,727 4,202,842 4,216,667 4,205,195 Earnings Per Average Common Share Outstanding $0.56 $0.81 $0.39 $0.72 Dividends Declared on Common Stock $0.175 $0.17 $0.35 $0.34 The accompanying Notes are an integral part of these statements.
- 3 - VALLEY RESOURCES, INC. AND SUBSIDIARIES Consolidated Condensed Balance Sheets
(Unaudited) Feb. 28, Aug. 31, 1995 1994 (in thousands) ASSETS Utility Plant - Net $44,972 $44,207 Leased Property-Net 2,182 2,436 Nonutility Property-Net 3,617 3,519 Other Investments 1,479 1,466 Current Assets: Cash 1,970 587 Accounts Receivable - Net 16,729 10,348 Deferred Unbilled Gas Costs 1,467 430 Fuel and Other Inventories (Note 3) 4,783 5,887 Prepayments 388 1,087 Common Stock held for Dividend Reinvestment-amounting to 4,856 and 1,496 shares respectively (Note 4) 55 19 Total 25,392 18,358 Deferred Debits: Recoverable Postretirement Benefits 548 441 Recoverable Vacations Accrued 774 803 Unamortized Debt Discount and Expense 1,610 1,639 Prepaid Pensions 5,259 4,973 Recoverable Deferred FIT 5,608 5,744 Recoverable Transition Obligation 1,325 3,172 Other 4,229 4,311 19,353 21,083 Total $96,995 $91,069 The accompanying Notes are an integral part of these statements.
- 4 - VALLEY RESOURCES, INC. AND SUBSIDIARIES Consolidated Condensed Balance Sheets (Continued)
(Unaudited) Feb. 28, Aug. 31, 1995 1994 (in thousands) CAPITALIZATION & LIABILITIES Capitalization: Common Stock $ 4,222 $ 4,213 Paid In Capital 17,757 17,695 Retained Earnings 7,443 7,270 Less: Accounts Receivable from ESOP (3,142) (3,142) Total Common Stock Equity 26,280 26,036 Long-Term Debt (Less Current Maturities): 8% First Mortgage Bonds, Series Due 2022 21,225 22,405 9% Notes Payable, Due 1999 2,725 2,725 Note Payable 1,905 1,905 Total Long-Term Debt 25,855 27,035 Total Capitalization 52,135 53,071 Obligation Under Capital Lease 1,473 1,747 Current Liabilities: Current Maturities of Long-Term Debt 450 450 Obligation Under Capital Lease 709 690 Notes Payable 12,100 8,900 Accounts Payable 4,761 4,596 Security Deposits & Refund Obligations 3,039 1,131 Taxes Accrued 1,035 640 Deferred Fuel Costs 3,090 522 Deferred Federal Income Taxes 328 -0- Accrued Interest 539 631 Other 993 970 Total 27,044 18,530 Commitments and Contingencies Deferred Credits 6,627 8,204 Deferred Federal Income Taxes 9,716 9,517 $96,995 $91,069 The accompanying Notes are an integral part of these statements.
- 5 - VALLEY RESOURCES, INC. AND SUBSIDIARIES Consolidated Condensed Statements of Cash Flows (Unaudited)
For the 6 Months Ended Feb. 28, Feb. 28, 1995 1994 (in thousands) Cash Flows from Operating Activities: Net Income $1,647 $3,032 Adjustments to Reconcile Net Income to Net Cash used in Operating Activities: Depreciation and Amortization 1,352 1,263 Provision for Uncollectibles 601 474 Deferred Federal Income Taxes 663 836 Change in Assets and Liabilities: Accounts Receivable (6,981) (8,979) Deferred Fuel Costs 2,568 2,054 Unbilled Gas Costs (1,037) (1,756) Fuel and Other Inventories 1,104 1,629 Other Current Assets 376 154 Accounts Payable, Accrued Expenses and Current Liabilities 2,468 2,463 Other - Net 233 54 Net Cash provided by Operating Activities 2,994 1,224 Cash Flows from Investing Activities: Utility Capital Expenditures (1,840) (2,245) Nonutility Capital Expenditures (375) (324) Other Investments (13) (18) Net Cash (Used) by Investing Activities (2,228) (2,587) Cash Flows from Financing Activities: Dividends Paid (1,474) (1,429) Capital Stock Transactions 71 (27) Retirement of Long-Term Debt (1,180) -0- Increase in Notes Payable 3,200 3,300 Net Cash Provided by Financing Activities 617 1,844 Net Increase in Cash 1,383 481 Cash - Beginning 587 940 Cash - Ending $ 1,970 $ 1,421 Supplemental Disclosures of Cash Flow Information Cash Paid During the Period for: Interest $ 1,656 $ 1,395 Federal Income Taxes $ 130 $ 57 Capital Lease Obligations Incurred $ 111 $ 496 The accompanying Notes are an integral part of these statements.
- 6 - NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS Note 1 The Corporation computes earnings per average common share based on the weighted average number of shares outstanding during the period. Note 2 In the opinion of the Corporation, the accompanying unaudited consolidated condensed financial statements contain all adjustments (consisting of only normal recurring accruals and matters discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations") necessary to present fairly the financial position as of February 28, 1995 and August 31, 1994 the results of operations for the three- and six-months ended February 28, 1995 and 1994, and Statement of Cash Flows for the six-months ended February 28, 1995 and 1994. The results of operations for the three- and six-month periods ended February 28, 1995 and 1994 are not necessarily indicative of the results to be expected for the full year. Note 3 Inventories - Fuel and Other Inventories: (in Thousands)
February 28 August 31 1995 1994 Fuels (at average cost) $2,394 $3,813 Merchandise and Other (at average cost) 1,024 1,075 Merchandise (at LIFO) 1,365 999 $4,783 $5,887
Note 4 Pursuant to the dividend reinvestment plan, stockholders can reinvest dividends and make limited additional investments in shares of Common Stock. Shares issued through dividend reinvestment can be acquired on the open market or original issue. - 7 - PART 1 - ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Utility gas revenues totaled $21,838,500 and $31,818,200, respectively, for the three- and six-months ended February 28, 1995. Utility gas revenues decreased 19 percent for the three-month period and 16 percent for the six- month period when compared to the same periods in fiscal 1994. Utility gas revenues are generated from sales to firm, seasonal and transportation customers, as well as, miscellaneous gas revenues. Revenues generated from firm customers were $20,737,400 and $29,411,400 for the three- and six-months ended February 28, 1995. Firm revenues decreased 22 percent and 19 percent, respectively, when compared to the same period in fiscal 1994. Firm revenues decreased as a result of the weather impact on gas sales and decreased PGPA revenues. Weather, as measured by degree days, was 16 percent warmer than the prior six-month period and 15 percent warmer than the quarter ended February 28, 1994. Firm gas sales were 3,068,200 Mcf and 4,195,700 Mcf for the three- and six-months ended February 28, 1995, a decrease of 12 percent and 11 percent from the prior three- and six-month periods, respectively. PGPA revenues declined due to the reductions in gas sales and decreases in the cost of natural gas. Seasonal and dual-fuel Mcf sales increased 90 percent and 64 percent for the three- and six-month periods when compared to the prior year. Seasonal sales increase and decrease depending on availability of gas and the price of competitive fuels. Valley Gas' margin on seasonal sales are passed through to firm customers through the purchased gas price adjustment clause. Valley Gas transports natural gas owned by customers on their behalf. The revenues generated from the transportation of natural gas for others increased $7,200 for the three-month period but were $3,000 less for the six-month period when compared with the results from the prior year. Nonutility revenues totaled $5,126,500 and $9,920,900, respectively, for the three- and six-months ended February 28, 1995. Nonutility revenues increased 9 percent for the three-month period and 5 percent for the six-month period when compared to the prior year. The increase in nonutility revenues was the result of improvements in the merchandising and wholesaling operations offset by decreased propane operations. The improvement in merchandise and wholesale operations was the result of sales volume increases and improvements in service contract and rental revenues as a result of increased sales and price increases. Propane revenues decreased 18 percent and 12 percent for the three- and six-month periods, respectively, when compared to the prior year. The decline in propane revenues is the direct result of decreased gallons sold due to the warmer weather. Gallons sold decreased 20 percent and 15 percent for the three- and six-month periods, respectively, when compared to the prior year. - 8 - Operating expenses for the three- and six-month periods were affected primarily by the cost of gas sold and operation expenses. The cost of gas sold decreased 24 percent and 20 percent, respectively, for the three- and six-month periods when compared with the results of the prior year. The cost of gas sold decreased due to decreased commodity prices and decreased usage of peak supplemental fuels. Other operation expenses increased 10 percent and 6 percent, respectively, for the three- and six-month periods when compared to the prior year. Other operation expenses increased as a result of increased uncollectible expenses and cost of sales associated with the increased nonutility sales. Interest expense totaled $813,000 and $1,563,600 for three- and six-months ended February 28, 1995, an increase of 18 percent and 15 percent, respectively, when compared to the same periods in fiscal 1994. The increase in interest expense was the result of increased short-term borrowings, PGPA interest, interest on consulting contracts, and increases in interest rates. Liquidity and Capital Resources The liquidity position of the Corporation improved during the second fiscal quarter due to increased revenues from colder weather during the winter period, and the reversal of the lag in receivable experienced in the first quarter. Management believes the available financings are sufficient to meet cash requirements. The available borrowings under lines of credit at February 28, 1995 were $11,400,000. Construction expenditures declined during the second fiscal quarter due to the constraints caused by the weather, thereby adding favorably to liquidity. The liquidity position of the Corporation should improve during the third quarter as a result of a $1.9 million refund from one of Valley's natural gas suppliers. This refund will be disbursed as credits against Valley's customer bills. Cash expended on the construction program will increase, however, this should be offset by cash flows from the reversal of the receivable lag from the winter period. PART II Item 6 - Exhibits and Reports on Form 8-K (a) None. (b) The Company did not file a Form 8-K. - 9 - SIGNATURES 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. VALLEY RESOURCES, INC. AND SUBSIDIARIES K. W. Hogan Senior Vice President, Chief Financial Officer and Secretary April 12, 1995 - 10 - -----END PRIVACY-ENHANCED MESSAGE-----