-----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, sB5FmJ4kcVEtk6GbaaZlX7lGso8d/YRHvdDHXymKreFGsRSiEoSQWhb8CSl56HPu VIO8g4tOuhiErcbDCzbWow== 0000107454-94-000001.txt : 19941122 0000107454-94-000001.hdr.sgml : 19941122 ACCESSION NUMBER: 0000107454-94-000001 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941114 DATE AS OF CHANGE: 19941114 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: WILSHIRE OIL CO OF TEXAS CENTRAL INDEX KEY: 0000107454 STANDARD INDUSTRIAL CLASSIFICATION: 1311 IRS NUMBER: 840513668 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04673 FILM NUMBER: 94560326 BUSINESS ADDRESS: STREET 1: 921 BERGEN AVE CITY: JERSEY CITY STATE: NJ ZIP: 07306-4204 BUSINESS PHONE: 2014202796 MAIL ADDRESS: STREET 2: 921 BERGEN AVENUE CITY: JERSEY CITY STATE: NJ ZIP: 07306 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For quarter ended September 30, 1994 Commission file number 1-467 WILSHIRE OIL COMPANY OF TEXAS (Exact name of registrants as specified in its charter) Delaware 84-0513668 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 921 Bergen Avenue - Jersey City, New Jersey 07306-4204 (Address of principal executive offices) (Zip Code) Registrant's telephone number - including area code (201) 420-2796 NO CHANGE Former name, former address and former fiscal year, if changed since last reports. 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. Yes x No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the close of the period by this report. Common Stock $1 Par Value -----9,858,141 WILSHIRE OIL COMPANY OF TEXAS INDEX Page No. Part I Financial Information Financial Information: Consolidated Balance Sheets - 1 September 30, 1994 and December 31, 1993 Consolidated Statements of Operations - 2 Nine months ended September 30, 1994 and 1993 Consolidated Statements of Operations - 3 Three months ended September 30, 1994 and 1993 Consolidated Statements of Cash Flows - 4 Nine months ended September 30, 1994 and 1993 Notes to Consolidated Financial Statements 5 Management's Discussion and Analysis 6, 7 & 8 of Financial Condition and Results of Operations Part II Other Information 9 WILSHIRE OIL COMPANY OF TEXAS AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (000's Omitted, Except Share Data) (Unaudited) ASSETS September 30, December 31, 1994 1993 CURRENT ASSETS: Cash and cash equivalents $ 1,659 $ 1,566 Accounts receivable 3,293 4,644 Marketable securities, stated at market value in 1993 and 1994 38,072 39,490 Prepaid expenses and other current assets 224 380 Total current assets 43,248 46,080 INVESTMENT IN PREFERRED STOCK OF THE TRUST COMPANY OF NEW JERSEY 6,000 3,000 PROPERTY AND EQUIPMENT Oil and gas properties, using the full cost method of accounting 127,678 125,135 Real estate properties 35,372 25,218 Other property and equipment 351 350 163,401 150,703 Less-Accumulated depreciation, depletion and amortization (98,899) 95,131 64,502 55,572 $113,750 $104,652 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Current portion of long-term debt $ 2,355 $ 1,839 Accounts payable 2,704 1,757 Accrued and other current liabilties 301 732 Total current liabilities 5,360 4,328 LONG - TERM DEBT, less current portion 50,871 40,721 DEFERRED INCOME TAXES 22,671 23,681 COMMITMENTS AND CONTINGENCIES (Note 2) SHAREHOLDERS' EQUITY Common stock, $1 par value, 15,000,000 shares authorized; issued 10,013,544 and 10,000,182 shares in 1994 and 1993 10,013 10,000 Capital in excess of par value 10,473 12,492 Unrealized gain on marketable securities ($27,101 in 1994 and $31,885 in 1993), net of deferred income taxes 14,905 17,537 Retained earnings (deficit) 2,774 ( 188) 38,165 39,841 Less - Treasury stock, 155,403 and 276,636 shares in 1994 and 1993, at cost 1,059 1,872 Cumulative foreign currency translation adjustment 2,258 2,047 34,848 35,922 $113,750 $104,652 WILSHIRE OIL COMPANY OF TEXAS AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (000's Omitted, Except Share Data) (Unaudited) FOR THE NINE MONTHS ENDED September 30, September 30, 1994 1993 REVENUES Oil & Gas $ 6,222 $ 6,554 Real Estate 5,814 4,704 Non-recurring gas settlement - 450 Total Revenues 12,036 11,708 COSTS AND EXPENSES Oil and Gas Production Expenses 1,977 2,021 Real Estate Operating Expenses 3,267 2,668 Depreciation, depletion and amortization 3,795 4,651 General and Administrative 1,066 825 Total Costs and Expenses 10,105 10,165 Income from Operations 1,931 1,543 INTEREST INCOME 5 66 OTHER INCOME 387 206 GAIN ON SALES OF MARKETABLE SECURITIES (Note 1) 5,457 5,161 INTEREST EXPENSE (2,469) (2,022) Income before provision for income taxes 5,311 4,954 PROVISION FOR INCOME TAXES Federal Current 542 652 Deferred 1,190 719 Foreign Current 106 124 Deferred ( 47) 87 1,791 1,582 Net income $ 3,520 $ 3,372 AVERAGE NUMBER OF SHARES OF COMMON STOCK OUTSTANDING: 9,959,924 10,217,985 INCOME PER COMMON SHARE $ .35 $ .33 WILSHIRE OIL COMPANY OF TEXAS AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (000's Omitted, Except Share Data) (Unaudited) FOR THE THREE MONTHS ENDED September 30, September 30, 1994 1993 REVENUES Oil & Gas $ 2,201 $ 2,138 Real Estate 2,029 1,728 Total Revenues 4,230 3,866 COSTS AND EXPENSES Oil and Gas Production Expenses 646 744 Real Estate Operating Expenses 1,193 948 Depreciation, depletion and amortization 1,382 1,847 General and Administrative 354 357 Total Costs and Expenses 3,575 3,896 Income from Operations 655 (30) INTEREST INCOME 3 27 OTHER INCOME 208 38 GAIN ON SALES OF MARKETABLE SECURITIES (Note 1) 1,646 2,065 INTEREST EXPENSE ( 923) (710) Income before provision for income taxes 1,589 1,390 PROVISION FOR INCOME TAXES Federal Current (130) 1 Deferred 789 336 Foreign Current 60 57 Deferred ( 81) 50 638 444 Net income $ 951 $ 946 AVERAGE NUMBER OF SHARES OF COMMON STOCK OUTSTANDING: 9,911,376 10,201,238 INCOME PER COMMON SHARE $ .10 $ .09 WILSHIRE OIL COMPANY OF TEXAS AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (000's Omitted) (Unaudited) For The Nine Months Ended September 30, September 30, 1994 1993 CASH FLOWS FROM OPERATING ACTIVITIES Net Income $ 3,520 $ 3,372 Adjustments to reconcile net income to net cash provided by operating activities - Depreciation, depletion and amortization 3,795 4,651 Deferred income tax provision 1,143 806 Amortization (adjustment) of deferred and unearned compensation in connection with non-qualified stock option plan, net (55) (335) Gain on sales of marketable securities (5,457) (5,161) Foreign currency transactions - (455) Changes in operating assets and liabilities - (Increase) decrease in receivables 1,933 (1,451) (Increase) in prepaid expenses and other current assets 156 (489) Increase (decrease) in income taxes payable 117 (2,012) Increase (decrease) in accounts payable, accrued and other liabilities 1,243 55 Net cash provided by (used in) operating activities $ 6,395 $ (1,019) CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures, net (12,698) (4,874) Purchase of marketable securities ( 3,809) (125) Purchase of Preferred Stock ( 3,000) - Proceeds from sales of marketable securities 5,318 6,131 Net cash provided by (used in) investing activities ($14,189) $ 1,132 CASH FLOWS FROM FINANCING ACTIVITIES Purchase of Treasury Stock (1,137) (411) Cash Dividends ( 580) (483) Proceeds from issuance of long term debt 22,804 3,208 Principal payment of long term debt (13,011) (602) Exercise of stock options 22 - Other (192) 33 Net cash provided by (used in) financing activities $ 7,906 $ 1,745 EFFECT OF EXCHANGE RATE CHANGES ON CASH (19) (32) Net increase (decrease) in cash and cash equivalents 93 1,826 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,566 3,051 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,659 $ 4,877 SUPPLEMENTAL DISCLOSURES TO THE STATEMENTS OF CASH FLOWS: Cash paid during the period for - Interest, net of amounts capitalized $ 2,296 $ 1,937 Income taxes, net 517 2,013 WILSHIRE OIL COMPANY OF TEXAS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1994 (Unaudited) 1. FINANCIAL STATEMENTS The condensed financial statements included herein have been prepared by the Registrant, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Registrant believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these condensed financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's latest annual report on Form 10-K. This condensed financial information reflects, in the opinion of management, all adjustments necessary to present fairly the results for the interim periods. The results of operations for such interim periods are not necessarily indicative of the results for the full year. 2. GAIN ON SALES OF MARKETABLE SECURITIES The Company realized gains from the sales of shares of Jacobs Engineering Group, Inc. of $5,457,000 and $ 5,161,000 for the nine months ended September 30, 1994 and 1993, respectively, and $1,646,000 and $2,065,000 for the three months ended September 30, 1994 and 1993, respectively . 3. COMMITMENTS AND CONTINGENCIES Federal income tax returns of the Company and its subsidiaries for the years 1975 through 1983 are under review by the Internal Revenue Service. The Company believes that final settlement of its Federal tax liability for those years will not have a significant effect on its consolidated financial position. The Company is a defendant in a lawsuit by a co-owner on one of its oil and gas properties. The lawsuit seeks an unspecified amount of royalties and interest for prior year production at the property. While the ultimate outcome of this litigation cannot be predicted at this time, management believes that this matter will not have a material adverse effect on the Company's consolidated financial position or its results of operations. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Net income for the nine months ended September 30 increased from $3,372,000 in 1993 to $3,520,000 in 1994. Net income for the quarter ended September 30 increased from $946,000 in 1993 to $951,000 in 1994. Consolidated revenues increased from $11,708,000 in the first nine months of 1993 to $12,036,000 in 1994. Oil and gas revenues decreased by $332,000 in the first nine months of 1994 as compared to 1993 due to declines in crude oil prices. Revenues in 1993 included a non-recurring gas settlement of $450,000. Real estate revenues increased from $4,704,000 in the first nine months of 1993 to $5,814,000 in 1994. This increase was attributable to the operations of the income producing real estate properties acquired June 30, 1993 and March 31, 1994 as well as generally higher rents and occupancy. Oil and gas production expense decreased slightly in the first nine months of 1994 as compared with 1993. Real estate operating expenses increased in the first nine months of 1994 over 1993 principally due to the newly acquired properties in 1993 and 1994. Depreciation, depletion, and amortization expense decreased in the first nine months of 1994 compared with 1993 primarily as a result of the increase in the estimated value of the Company's oil and gas reserves. This increase in reserves is due to the Company's successful horizontal oil drilling program. The gain on sales of marketable securities is derived from sales of shares of Jacobs Engineering Group, Inc. Interest expense increased in the first nine months of 1994 over 1993 principally due to the addition of the new real estate properties in 1993 and 1994 and to an increase in the prime rate. The provision for income taxes includes Federal and Canadian taxes. Differences between the effective tax rate and the statutory income tax rates are due to foreign resource tax credits in Canada and the dividend exclusion in the United States. Accounting for Income Taxes Statement of Financial Accounting Standard No. 109- "Accounting for Income Taxes" became effective for the Company beginning in the first quarter of 1993. SFAS 109 requires, among other things, an asset and liability approach to accounting for income taxes. SFAS 109 did not have a material impact on the Company's consolidated financial statements. Accounting for Certain Investments in Debt and Equity Securities On December 31, 1993 the Company adopted Statement of Financial Accounting Standards No. 115 "Accounting for Certain Investments in Debt and Equity Securities" (SFAS 115). The investments of the Company are principally equity securities, held for indefinite periods of time. These securities are carried at fair value and the difference between cost and fair value is charged/credited directly to shareholders' equity net of income taxes. As of September 30, 1994, the gross unrealized gain on marketable securities was $27.1 million. This amount, net of related deferred income taxes of $12.2 million, is included as a credit to shareholders' equity in the Company's September 30, 1994 consolidated balance sheet. Liquidity and Capital Resources At September 30, 1994 the Company had approximately $10.9 million in marketable securities at cost, with a market value of approximately $38 million. The current ratio at September 30, 1994 was 8 to 1 on a market basis, which management considers adequate for the Company's current business. The Company's working capital was approximately $38 million at September 30, 1994. The Company anticipates that cash provided by operating activities, principally from oil and gas sales as well as investing activities, will be sufficient to meet its capital requirements to acquire oil and gas properties and to drill and evaluate these and other oil and gas properties presently held by the Company. The level of oil and gas capital expenditures will vary in future periods depending on market conditions, including the price of oil and the demand for natural gas, and other related factors. As the Company has no material long-Term commitments with respect to its oil and gas capital expenditure plans, the Company has a significant degree of flexibility to adjust the level of its expenditures as circumstances warrant. The Company plans to actively continue its exploration and production activities as well as search for the acquisition of oil and gas producing properties and of companies with desirable oil and gas producing properties. There can be no assurance that the Company will in fact locate any such acquisitions. On March 31, 1994 the Company acquired various real estate properties at an aggregate purchase price of $10,240,000 from The Trust Company of New Jersey, which also provided the long-term financing of $8,704,000. The Company will explore other real estate acquisitions as they arise. The timing of any such acquisition will depend on, among other things, economic conditions and the favorable evaluation of specific opportunities presented to the Company. Accordingly, while the Company anticipates that it will actively explore real estate acquisition opportunities, no assurance can be given that any such acquisition will occur. Net cash provided by ( used in) operating activities was $6,395,000 and ($1,019,000) in the first nine months of 1994 and 1993, respectively. The increase in 1994 was due to the payment in 1993 of Canadian tax liabilities settled in 1992 as well as changes in accounts receivable and accounts payable. Net cash provided by (used in) investing activities was ($14,189,000) and $1,132,000 in the first nine months of 1994 and 1993, respectively. The Company acquired $10.2 million of real estate properties during the first nine months of 1994 and $3.8 million during the first nine months of 1993. Additionally, the Company acquired approximately $3.8 million of marketable securities and $3 million of preferred stock in 1994. Net cash provided by financing activities was $7,906,000 and $1,745,000 in the first nine months of 1994 and 1993, respectively. The variation principally relates to the issuance of long-term debt in connection with purchases of real estate properties during 1993 and 1994. During the first nine months of 1994 the Company renegotiated all of its secured bank loans (other than mortgage notes). Among other things, more favorable principal amortization was obtained and the maturity dates of these loans were extended. The Company believes it has adequate capital resources to fund operations for the foreseeable future. PART II - OTHER INFORMATION Item 1, 2, 3, 4, 5 - Not applicable Item 6 - Exhibits and Reports on Form 8-K No Form 8-K was filed during the quarter ended September 30, 1994. S I G N A T U R E S 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. WILSHIRE OIL COMPANY OF TEXAS (Registrant) /s/Sherry Wilzig Izak By: Sherry Wilzig Izak Chairman of the Board and Chief Executive Officer (Duly Authorized Officer and Chief Financial Officer) Date: November 14, 1994 S I G N A T U R E S 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. WILSHIRE OIL COMPANY OF TEXAS (Registrant) By: Sherry Wilzig Izak Chairman of the Board and Chief Executive Officer (Duly Authorized Officer and Chief Financial Officer) Date: November 14, 1994 -----END PRIVACY-ENHANCED MESSAGE-----