-----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, Up5ToT6HuazooWRvk0WwP8O9IjTErWyEtbWSu/5Djoiwx5bd2G5qCzWM76DJLJoo cKxM9U16FpiFlCBnDaak1Q== 0000024751-98-000004.txt : 19980817 0000024751-98-000004.hdr.sgml : 19980817 ACCESSION NUMBER: 0000024751-98-000004 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980814 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CORNING NATURAL GAS CORP CENTRAL INDEX KEY: 0000024751 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS TRANSMISSION & DISTRIBUTION [4923] IRS NUMBER: 160397420 STATE OF INCORPORATION: NY FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-00643 FILM NUMBER: 98689482 BUSINESS ADDRESS: STREET 1: 330 W WILLIAM ST STREET 2: P O BOX 58 CITY: CORNING STATE: NY ZIP: 14830 BUSINESS PHONE: 6079363755 MAIL ADDRESS: STREET 1: 330 W WILLIAM STREET STREET 2: P O BOX 58 CITY: CORNING STATE: NY ZIP: 14830 10QSB 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended June 30, 1998 Commission File Number 0-643 Corning Natural Gas Corporation (Exact name of registrant as specified in its charter) New York 16-0397420 (State or other jurisdiction of (I.R.S. Employer Identification incorporation or organization) No.) 330 W. William Street, PO Box 58, Corning, New York 14830 607-936-3755 (Registrant's telephone number, including area code) Former name, former address and former fiscal year, if change since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 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 APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes No There were 460,000 shares of Common Stock outstanding at the end of the quarter. There is only one class of Common Stock and no Preference Stock outstanding. Net income (loss) for the quarter ended June 30, 1998 was ($96,427), a $61,449 reduction from the same quarter the previous year. The reduction results primarily from the decline in gas sales due to milder weather. Mcf deliveries of 1,281,804 were down 14 percent from the same quarter last year. In addition, capacity assignment revenues of $20,166 were down 40 percent from the previous year due to an increasingly competitive market. Subsidiary earnings were also down 18 percent for the quarter due to the expected beginning unprofitableness of the newly acquired businesses discussed below. As the Company's business is seasonal by quarters, results for the first nine months of fiscal year 1998 should not be used as an indication of what results for the full twelve months of fiscal year 1998 may be. Late in September, 1997, the Company completed a long-term debt financing in the amount of $4.7 million. These funds were obtained through a private placement of a senior note with interest at 7.9 percent over a 20 year term. This financing allowed the Company to reduce short-term debt in the amount of $3.1 million and to retire a 10 percent bond with a balance of $1.6 million. Savings of over $200,000 were estimated on the bond retirement while the entire package served to strengthen the capitalization structure. In April 1998 the Company's Appliance subsidiary completed the purchase of three local existing businesses. A shopping plaza in South Corning was purchased which has multi-year leases with eight businesses housed in 52,000 square feet of rentable space with a major grocery store as the anchor. Also purchased was a real estate management and brokerage organization and a tax and financial services company. The shopping plaza was purchased for $1,175,000 and financed primarily through a $940,000 twenty year note secured by a mortgage on the shopping center real estate. The real estate and finalncial service companies were purchased for $349,000, funded through a $180,000 eight year loan agreement with the sellers and the balance through operating funds. The real estate firm is a franchise of The Prudential Marketplace Realty and has twenty three agents operating out of offices in both the Corning and Elmira, New York market. The financial services business, Tax Center International, provides tax preparation, accounting and payroll services and currently serves over six hundred clients. These purchases are part of the Company's plan to aggressively explore new opportunities in non-traditional areas. Internal generation of funds should be sufficient to meet the needs of the Company coupled with some intermittent short-term borrowings. There has been no change in independent public accountants. The Company has not filed any reports on Form 8-K for the quarter ended June 30, 1998. The Information furnished herewith reflects all adjustments which are in the opinion of management necessary to a fair statement of the results for the period. Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to SEC rules and regulations, although the Company believes the disclosures which are made are adequate to make the information presented not misleading. The condensed financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's latest annual report on Form 10-KSB. The statements contained herein have not been examined or certified by a firm of certified public accountants. There were no sales of unregistered securities (debt or equity) during the fiscal quarter ending June 30, 1998. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CORNING NATURAL GAS CORPORATION Date July 31, 1998 THOMAS K. BARRY T homas K. Barry, Chairman of the Board, President and C.E.O. Date July 31, 1998 GARY K. EARLEY Gary K. Earley, Treasurer CORNING NATURAL GAS CORPORATION CONSOLIDATED STATEMENT OF INCOME UNAUDITED FORM 10 QSB FOR QUARTER ENDED NINE MONTHS ENDED June 30,1998 June 30,1997 June 30,1998 June 30, 1997 -------------- ------------ ------------ ------------- Operating Revenues $3,220,802 $3,756,539 $15,061,991 $16,271,835 Cost and Expense Operating Expenses 3,171,463 3,612,447 13,481,267 14,425,959 Interest Expense 224,741 201,039 701,862 651,714 Income Tax (52,942) 915 308,569 412,704 Other Deductions Net 3,447 218 8,603 1,432 ---------- ----------- ------------- - ----------- Total Costs and Exp 3,346,709 3,814,619 14,500,301 15,491,809 ---------- ---------- ------------ ---------- Operating Income (125,907) (58,080) 561,690 780,026 Other Income 10,672 100 10,773 988 Corning Natural Gas Appliance Corp.: Operating Revenues 519,007 428,209 1,791,714 1,683,001 Depreciation 61,254 58,462 182,289 180,679 Other Operating Exp 443,884 333,252 1,346,431 1,263,074 Federal Income Tax 19,340 13,493 100,879 85,653 Invest in Assoc. Cos. (13,337) 0 (13,337) 0 ----------- --------- ---------- ---------- Net Income of Appl Corp. 18,808 23,002 148,778 153,595 ----------- --------- --------- ---------- Net Income $ (96,427) $ (34,978) $ 721,241 $ 934,609 ======= ======= ======== ========= Earnings Per Share $ (.210) $ (.08) $ 1.568 $ 2.032 Dividends Per Share $ .650 $ .32 $ .975 $ .96 Dividends Declared $ 149,500 $ 147,200 $ 448,501 $ 441,600 Shares of common stock outstanding were 460,000 at June 30, 1998 Earnings per share = Net Income as shown above divided by 460,000 shares. Dividends per share = Dividends declared divided by shares outstanding at the time. See Management's Discussion & Analysis on Page 5. CORNING NATURAL GAS CORPORATION CONSOLIDATED STATEMENT OF CASH FLOW FORM 10-QSB - UNAUDITED JUNE 30, 1998 JUNE 30, 1997 CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 721,241 $ 934,609 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation 561,900 538,450 Allowance for Funds Used During Const. 0 0 Changes in Assets and Liabilities: (Increase) Decrease in: Accounts Receivable (97,819) (360,926) Materials, Supplies & Appl Inventory (228,660) 559,030 Other Deferred Charges 1,445,628 1,469,088 Prepaid and Other Assets (52,890) 106,756 Increase (Decrease) in: Accounts Payable (412,039) 355,275 Accrued General Taxes 71,970 74,455 Accrued Federal Income Tax 173,096 39,249 Deferred Federal Income Tax (151,997) (201,976) Other Liabilities and Deferred Credits (310,415) (872,813) Net Cash Provided (used) by ---------- ----------- Operating Activities 1,720,015 2,641,197 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of Marketable Securities (109,500) ( 525,340) Capital Expenditures ( 2,388,039) (621,769) Allowance for Funds Used During Const. 0 0 ------------ ---------- Net Cash Used in Investing Activities ( 2,497,539) (1,147,109) CASH FLOWS FROM FINANCING ACTIVITIES: Net Borrowings (Repayments) Under Line-of-Credit Agreement 275,000 (650,000) Dividends Paid (448,501) (441,600) Repayment of Long-Term Debt 1,104,983 (100,000) Net Cash Provided (used in) ---------- ------------ Financing Activities 931,482 (1,191,600) ---------- ----------- NET INC. (DEC.) IN CASH AND CASH EQUIV. 153,958 302,488 CASH AND CASH EQUIV. AT BEG. OF PERIOD 262,752 180,595 --------- ----------- CASH AND CASH EQUIV. AT END OF PERIOD $ 416,710 $ 483,083 ======== ========= Supplemental Disclosures of Cash Flow Information: Cash paid During the Year for: Interest (Net of Amount Capitalized) $ 683,910 $ 710,336 Income Taxes $ 310,000 $ 553,246 CORNING NATURAL GAS CORPORATION Consolidated Balance Sheet At June 30, 1998 and September 30, 1997 Form 10-QSB Unaudited Assets 06/30/98 09/30/97 --------- ---------- Gas Utility Plant $ 21,118,142 $ 20,378,449 Non-Utility-Principally Rented Gas App. 4,083,424 2,533,498 ------------ ------------ 25,201,566 22,911,947 Less: Accum. Provision for Depreciation (8,941,926) (8,478,446) ----------- ------------- $ 16,259,640 $ 14,433,501 Current Assets: Cash and Equivalents 416,710 262,752 Marketable Securities Available For Sale 770,637 641,899 Accounts Receivable 1,093,034 995,215 Materials, Supplies and Inventories 2,218,058 1,989,398 Prepayments and Other 1,099,572 1,046,682 ---------- --------- Total Current Assets 5,598,011 4,935,946 Non-Current Assets Def. Tax Assets 553,975 62,000 Def. Debits - Acctg. for Income Taxes 866,802 1,016,661 Deferred Debits (198,230) 1,247,398 --------- ---------- Total Non-Current Assets 1,222,547 2,326,059 Total Asset $23,080,198 $21,695,506 =========== =========== Capitalization & Liabilities Capitalization: Common Stock 2,300,000 2,300,000 Premium on Capital Stock - Common 653,346 653,346 Retained Earnings 2,484,573 2,211,833 Net Unrealized Gain on Securities For Sale (net of FIT of 22,799) 63,496 44,258 ---------- --------- 5,501,415 5,209,437 Long Term Debt 10,504,983 9,400,000 ---------- ---------- Total Capitalization 16,006,398 14,609,437 Current Liabilities: Short Term Notes Payable 1,050,000 775,000 Accounts Payable 1,418,301 1,830,340 Customer Deposits and Accrued Interest 241,416 673,114 Accrued Federal Income Tax 173,096 0 Other Accrued Taxes 184,337 112,367 Current Maturities of Long Term Debt 0 0 Other Current and Accrued Liabilities 612,363 624,790 --------- --------- Total Current Liabilities 3,679,513 4,015,611 Accumulated Deferred FIT 2,635,085 2,444,966 Reserves and Other Liabilities 759,202 625,492 --------- --------- Total Liab. and Capitalization $23,080,198 $21,695,506 =========== =========== See Management's Discussion & Analysis on Page 5 EX-26 2 [ARTICLE] UT [PERIOD-TYPE] 12-MOS 12-MOS 3-MOS 3-MOS [FISCAL-YEAR-END] SEP-30-1998 SEP-30-1998 SEP-30-1998 SEP-30-1998 [PERIOD-END] JUN-30-1998 JUN-30-1998 JUN-30-1998 JUN-30-1998 [BOOK-VALUE] PER-BOOK PER-BOOK PER-BOOK PER-BOOK [TOTAL-NET-UTILITY-PLANT] 13716232 1326313 13716232 13236313 [OTHER-PROPERTY-AND-INVEST] 2543408 1069146 0 0 [TOTAL-CURRENT-ASSETS] 5598011 4367017 0 0 [TOTAL-DEFERRED-CHARGES] 1222547 1080009 0 0 [OTHER-ASSETS] 0 0 0 0 [TOTAL-ASSETS] 23080198 19752485 0 0 [COMMON] 2300000 2300000 0 0 [CAPITAL-SURPLUS-PAID-IN] 653346 653346 0 0 [RETAINED-EARNINGS] 2484573 2687391 0 0 [TOTAL-COMMON-STOCKHOLDERS-EQ] 5437919 5640737 0 0 [PREFERRED-MANDATORY] 0 0 0 0 [PREFERRED] 0 0 0 0 [LONG-TERM-DEBT-NET] 10504983 6200000 0 0 [SHORT-TERM-NOTES] 1050000 2075000 0 0 [LONG-TERM-NOTES-PAYABLE] 0 0 0 0 [COMMERCIAL-PAPER-OBLIGATIONS] 0 0 0 0 [LONG-TERM-DEBT-CURRENT-PORT] 0 100000 0 0 [PREFERRED-STOCK-CURRENT] 0 0 0 0 [CAPITAL-LEASE-OBLIGATIONS] 0 0 0 0 [LEASES-CURRENT] 0 0 0 0 [OTHER-ITEMS-CAPITAL-AND-LIAB] 6087296 5736748 0 0 [TOT-CAPITALIZATION-AND-LIAB] 23080198 19752485 0 0 [GROSS-OPERATING-REVENUE] 0 0 3220802 3756539 [INCOME-TAX-EXPENSE] 0 0 (52942) 915 [OTHER-OPERATING-EXPENSES] 0 0 3174910 3612665 [TOTAL-OPERATING-EXPENSES] 0 0 3121968 3613580 [OPERATING-INCOME-LOSS] 0 0 98834 142959 [OTHER-INCOME-NET] 0 0 29480 23102 [INCOME-BEFORE-INTEREST-EXPEN] 0 0 128314 166061 [TOTAL-INTEREST-EXPENSE] 0 0 224741 201039 [NET-INCOME] 0 0 (96427) (34978) [PREFERRED-STOCK-DIVIDENDS] 0 0 0 0 [EARNINGS-AVAILABLE-FOR-COMM] 0 0 (96427) (34978) [COMMON-STOCK-DIVIDENDS] 0 0 149500 147200 [TOTAL-INTEREST-ON-BONDS] 0 0 96223 143258 [CASH-FLOW-OPERATIONS] 0 0 1720015 2641197 [EPS-PRIMARY] 0 0 (.21) (.08) [EPS-DILUTED] 00 0 0 0
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