-----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, OdjvMnxd47D5JVHhrhUHlwCgo4rIcz71DhWfDBEvQ9DBgaNAVKX8EyKft5i/o2b+ fvC4pbHn8e0kf0u0sj/MTA== 0000024751-99-000003.txt : 19990901 0000024751-99-000003.hdr.sgml : 19990901 ACCESSION NUMBER: 0000024751-99-000003 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990813 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CORNING NATURAL GAS CORP CENTRAL INDEX KEY: 0000024751 STANDARD INDUSTRIAL CLASSIFICATION: 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: 99689924 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 EX-27 1
UT 12-MOS 12-MOS 3-MOS 3-MOS SEP-30-1999 SEP-30-1998 JUN-30-1999 JUN-30-1998 JUN-30-1999 SEP-30-1998 JUN-30-1999 JUN-30-1998 PER-BOOK PER-BOOK PER-BOOK PER-BOOK 16,583,196 16,098,681 0 0 0 0 0 0 4,934,546 4,853,975 0 0 2,312,588 3,111,050 0 0 2,114,152 761,052 0 0 25,944,482 24,824,758 0 0 2,300,000 2,300,000 0 0 653,346 653,346 0 0 2,478,465 2,443,133 0 0 5,431,811 5,396,479 0 0 0 0 0 0 0 0 0 0 11,855,921 10,459,351 0 0 1,180,000 2,325,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 7,446,750 6,643,928 0 0 25,944,482 24,824,758 0 0 0 0 3,184,562 3,220,802 0 0 0 0 0 0 3,103,893 3,121,968 0 0 3,103,893 3,121,968 0 0 80,669 98,834 0 0 57,976 29,480 0 0 138,645 128,314 0 0 227,922 224,741 0 0 (89,277) (96,427) 0 0 0 0 0 0 (89,277) (96,427) 0 0 0 0 0 0 227,922 224,741 0 0 2,941,401 1,720,015 0 0 (0.194) (0.210) 0 0 0 0
10QSB 2 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, 1999 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 I.D. No. incorporation or organization) 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. As the Company's business is seasonal, the interim results should not be used as an indication of what results for the full twelve months of fiscal year 1999 may be. Net loss for the quarter ended June 30, 1999 was ($89,300), compared to a $96,400 loss in the same quarter the previous year. The quarter ended June 30 is part of the off season for the Company's gas business. Net income for the nine months ended June 30, 1999 was $562,900,a reduction of $158,300 from the previous year. Earnings from gas operations declined $82,000 due to a warm winter and increased overheads. The Foodmart Plaza and Tax Center International produced earnings that met forecasted levels, contributing an additional $65,000 to consolidated net income. The Appliance Company experienced a reduction in earnings due to the warm weather and a reduction in merchandise and service revenues. Corning Realty Assoc. experienced sales that exceeded forecasts, however that business is sesonal with the first nine months of the Company's fiscal year typically reflecting marginal or loss months. The Company's fourth quarter contains the most profitable months for the real estate business, which is normal for this industry in the northeast. On January 1, 1999 the Company adopted Financial Accounting Standards Board Statement No. 130, Reporting Comprehensive Income (Statement 130). Statement 130 established standards for reporting and presentation of comprehensive income and its components in a full set of financial statements. Comprehensive income consists of net income and net unrealized gains on marketable securities and is presented in a statement of comprehensive income. The statement requires only additional disclosures in the consolidated financial statements; it does not affect the Company's financial position or results of operations. Internal generation of funds should be sufficient to meet the needs of the Company coupled with some intermittent short-term borrowings. Year 2000 Readiness The year 2000 issue (Y2K) refers to the inability of certain computerized systems and technologies to recognize and/or correctly process dates beyond December 31, 1999. Corning Natural Gas Corporation has identified those areas within the Company where the potential exists for computer system failure or miscalculations by computer programs could cause a disruption in the Company's operations or services. A Y2K Coordinator, Thomas S. Roye, was assigned and a Y2K plan was developed. We expect to compete all phases of the plan by July 1, 1999. The Company's Y2K plan has been updated since 3/31/99, with the most significant being the contingency plan outlined below. Completion of the Plan as of 06/30/1999 The company has developed and put in place solutions for these areas: Computer Hardware and Software The AS/400 main frame computer Operating System provided by IBM. All software modules provided by Orcom Systems Inc. as follows: Customer Information Systems Meter Reading Billing for the Gas and Appliance Company Service Orders Accounting and Financial Statements Inventory and Purchase Orders Accounts Payable All of the systems are now believed to be Y2K Ready through upgrades we have received from our Software Provider and IBM. All personal computers BIOS has been tested with three test programs for Y2K readiness. Those identified as being not able to correctly rollover to the year 2000 have been replaced, while others have had their BIOS upgraded. The review of software contained on these computers is currently being conducted and the Company anticipates no problems with readiness in this area. No PC is being used in an area critical to our operations. Transmission and Distribution System We have only two controllers with embedded chips on our pipeline system. One has been tested and is Y2K compliant. The other has yet to be tested. We anticipate no problem delivering gas on our system due to Y2K issues since it is a manual system. Telemetering System The telemetering system is Y2K ready and we anticipate no interruption in the flow of gas to our customers due to our computer system. The personal computer that controls the system reporting and monitoring functions has been replaced. Phone System The internal telephone system for the Company is now Y2K ready. We will be able to receive emergency calls and generate the proper service orders for all phases of our operations. We do not require the use of PC's in handling our customer's calls and creating orders. The company uses "Dumb Terminals" in the customer service and dispatch areas. Third Parties and Identified Risks The Company is primarily concerned with insuring that we continue to deliver natural gas safely and reliably. We must be able to respond to our customers requests for service and emergency calls. Based on our efforts to date the Company expects to be able to operate its own facilities without interruption and continue normal operations in the Year 2000 and beyond. However, the Company is dependent upon third party products and services,such as utilities and programming uplinks, for the operation of its businesses. As part of its Y2K program the Company has contacted these third party product and service providers to ascertain whether Y2K compliance issues may exist. While many of these companies may give us assurances that they are fully Y2K compliant the Company does not have the ability to verify such information. If critical third party systems fail as a result of Y2K issues the ability of the Company to provide services to its customers may be interrupted. While the Company intends to consider contingency plans to address those risks, although no such plans have been identified, there can be no assurance that any such plan would resolve such problems in a satisfactory manner. Security System The Security System is Y2K ready. Heating and Cooling System The heating and cooling systems do not rely on a computer system. Sprinkler System The building sprinkler system does not rely on a computer system. Contingency Plan The contingency plan was completed on July 1, 1999. The Company has begun responding to all inquiries from suppliers, critical customers and other outside entities with a mailed response as to our progress in completing our Year 2000 plan immediately. The Company has completed a bill stuffer to notify our customers on our progress in completing our Year 2000 Readiness Plan. The stuffer was mailed in our March Billing. We have completed working on a website and have included this Y2K Readiness Disclosure on the site. The address for the site is www.corninggas.com. This will be updated monthly. The Company has notified the Board of Directors, all employees and our Auditors of our position regarding Y2K readiness. This Year 2000 Readiness Disclosure is for informational purposes only and is not a warranty or guarantee of any sort. It does not create any legal obligations, or change or amend any agreement between Corning Natural Gas Corporation or its subsidiaries and any third party. Contingency Plan for the period 12/31/99-01/3/99 Identification of Risk and Critical Systems Scenario:Loss of Electricity to Main Office, Loss of Electricity at Major Connections Points (Measuring and Regulating Stations) Failure of RTU units in Regulating Stations, Loss of Phone Service in entire area, Handling of Emergency Calls. Main Office Critical systems that may be affected would be the main frame computer system which contains all customer information, the mapping system, our internal phone system, inability of customers to report emergency situations, failure of gas being delivered due to power failures at major connections points. Standby Generator at the Main Office will provide electricity if a power interruption occurs. It will only provide electricity to certain areas of the shop and office. Computer System will be plugged into an outlet powered by the standby generator. We will be able to produce service orders and get meter inform- ation, service addresses, phone no. and emergency info on all customers. Complete list of customer's info such as name, service address, meter number, meter notes, and phone no. will be printed out in case the AS/400 fails. Currently the Telemetering (SCADA) and Mapping Systems, Dispatcher's office and Inventory Clerks office are on the standby generator and will serve as our operations center for the period. Our internal phone system and main switchboard is also on the standby generator and is operational in the event of a complete power failure. Inventory of available equipment on standby generator: 1-Computer terminal and printer (Customer Information and Service Order (System) 2-Personal computers and printers (SCADA and Mapping Systems, Customer Info and Mapping Systems) 1-Fax Machine Company 2 way Radio System Emergency Scanner (Monitoring Fire and Police Calls) Entire Company Phone System Communications In the case of complete communication failure we will use two way radio's to communicate with our men and emergency services such as police, fire, ambulance and the Steuben County Office of Emergency Services. We have requested and had approved programming three of our radios with the Steuben County Fire frequencies to facilitate communication between Corning Natural Gas and the county emergency services. We will direct customers to report emergencies to the nearest fire department or our Main Office, which will be open for emergency service, if the phones are out. We are planning to meet with the Steuben and Chemung County Emergency Services in July to facilitate these arragements. We are in the process of setting up two-way radio communication with Consolidated, our major transmission company. Personnel Personnel required to be stationed at main pipeline connection points. 1-Person at Whiskey Creek Station 1-Person at Bradley Station 1-Person at Harrington Station 2-Dispatch Office - one to act as dispatcher, one to handle service calls We will designate 1 line crew for emergencies from 10:00 PM to 6:00 AM on 12/31-01/01 and have them take fully equipped vehicles and radios home and be on call. They would need to call in or radio at 1-hour intervals to monitor the situation. If the emergency situation lasts beyond 1/01 the on-call assignment will be rotated amoung the line crews as directed until notified by Senior Vice President-Operations. 1-Person in Main Office to handle walk-in emergency situations All Operation Supervisors including: Senior Vice President-Operations Gas Construcion Manager Gas Control Manager Gas Supply Manager Gas Service Manager Vice President-Administration (Computer Operations and Customer Service) Training of Personnel Corning's personnel are already fully trained in handling and following emergency procedures. Specific procedures for the weekend will be reviewed with all personnel and our Contingency planning group will continue to meet to facilitate this effort. Testing of Contingency Plan On June 19, 1999 we conducted a test by cutting all electricity to our Main Office. The results of the tests are attached. We will have our base radio operational, our SCADA and Mapping System will be operational and our entire phone system. The Main Frame computer will be connected to the standby generator and we will have all of our customer information available. On April 6, 1999 we witnessed a test of our Bradley Station by NYSEG which serves the Elmira portion of our system. When power was cut the backup system operated with no problems. The batteries were discovered to be low and were replaced. Documentation of our tests of our RTU's and our other stations will be forthcoming with our final monthly report. Since our distribution system is primarily a manual system we do not anticipate any problems with the system due to Y2K issues. Instructions to the Public We will be attending a meeting with the Steuben County Emergency Services to discuss notification of the public of contingency plans in case of emergency. They are attempting to consolidate any message to the public so they do not receive mixed messages. These meetings involve all Utilities and Emergency Services and we will cooperate fully with the agency. We anticipate an early notification of the plan in October with a follow-up the last week of December. The plan in it's entirety will be posted on our web site at www.corninggas.com and we will notify our customers with a bill stuffer and newspaper ad, after the format and text are agreed upon by the participants in the group. 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 quarter ending June 30, 1999. 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, 1999. CORNING NATURAL GAS CORPORATION Consolidated Balance Sheets Form 10-QSB Unaudited June 30, 1999 Sept 30, 1999 -------------- ------------- Assets Property, plant and equipment, at original cost: Utility $21,921,127 21,396,130 Non-Utility-principally rented appl and plaza property 4,095,926 3,782,327 ------------ ------------ 26,017,053 25,178,457 Less accumulated depreciation (9,433,857) (9,079,776) ------------- ------------- 16,583,196 16,098,681 ------------- ------------- Current assets: Cash 259,965 284,426 Marketable securities available for sale, at fair value 1,022,322 785,361 Accounts receivable, less allowance for uncollectibles 1,141,407 1,038,524 Gas stored underground, at average cost 796,382 1,539,727 Gas and appliance inventories 571,684 581,765 Prepaid income taxes 0 55,534 Deferred income tax assets 519,773 57,000 Prepaid expenses 623,014 511,638 ------------ ------------ 4,934,546 4,853,975 ----------- ------------ Deferred charges: Pension and other 919,221 1,509,695 Deferred debits-accounting for income taxes 1,016,661 1,016,661 Unrecovered gas costs 0 191,819 Long-term debt issuance costs, net of amort 376,706 392,875 ---------- ---------- 2,312,588 3,111,050 Goodwill, net of amortization 1,683,794 348,235 Other assets 430,358 412,817 ---------- ----------- $ 25,944,482 24,824,758 =========== =========== Capitalization and Liabilities Common stock 2,300,000 2,300,000 Additional paid-in capital 653,346 653,346 Accumulated Comprehensive Income Net unrealized gain on securities available for sale 117,230 39,644 (net of income taxes of $51,145 as of 3/31/99 and $20,422 as of 9/31/98) Retained earnings 2,361,235 2,403,489 ------------ ----------- 5,431,811 5,396,479 Long-term debt, less current installments 11,885,921 10,459,351 ----------- ----------- Total capitalization 17,317,732 15,855,830 ----------- ----------- Current liabilities: Notes payable 1,180,000 2,325,000 Accounts payable 1,473,504 1,266,918 Current installments of long-term debt 35,450 36,830 Customers' deposits and accrued interest 234,770 728,645 Accrued general taxes 257,800 145,170 Supplier refunds due customers 0 70,731 Accrued expenses 2,841 502,755 Other 624,092 29,035 ---------- ---------- Total current liabilities 3,808,457 5,105,084 ---------- ---------- Deferred credits: Deferred income tax liabilities 2,329,991 2,353,665 Def compensation,postretirement benefits,and other 2,488,302 1,510,179 ----------- ----------- 4,818,293 3,863,844 ----------- ---------- $25,944,483 24,824,758 ============ ============ CORNING NATURAL GAS CORPORATION Consolidated Statements of Income Unaudited Form 10 QSB Quarter Ended Nine Months Ended 06/30/99 06/30/98 06/30/99 06/30/98 --------------------------------------------- Operating Revenues $3,184,562 3,220,802 14,833,765 15,061,991 ---------- --------- ---------- ---------- Cost and Expense Operating Expenses 3,102,333 3,171,463 13,359,010 13,481,267 Interest Expense 227,921 224,741 726,873 701,862 Income Tax 104 (52,942) 266,975 308,569 Other Deductions, Net 1,755 3,447 2,741 8,603 ----------- ---------- ---------- ---------- Total Costs and Expenses 3,331,814 3,346,709 14,355,600 14,500,301 Operating Income (147,252) (125,907) 478,165 561,690 ----------- ---------- ---------- --------- Other Income 19,748 10,672 12,036 10,773 ----------- --------- ---------- --------- Corning Natural Gas Appliance Corp. Operating Revenues 506,928 519,007 1,658,841 1,791,714 Depreciation 58,563 61,254 176,034 182,289 Operating Expense 396,794 406,268 1,294,725 1,346,431 Federal Income Tax 19,351 19,340 69,100 100,879 Equity in Assoc. Cos. 6,007 (13,337) (46,290) (13,337) ---------- ---------- --------- --------- Net Income of Appliance Corp. 38,228 18,808 72,693 148,778 ---------- --------- --------- --------- Net Income $ (89,277) (96,427) 562,893 721,241 ============ =========== ========= ========= Earnings Per Share- basic & diluted (0.194) (0.210) 1.224 1.568 Dividends Per Share 0.650 0.650 1.300 0.975 Dividends Declared 299,000 299,000 598,000 448,501 Shares of common stock outstanding were 460,000 at June 30, 1999. 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. CORNING NATURAL GAS CORPORATION Consolidated Statements of Cash Flows For Six Months Ended June 30, 1999 and 1998 Form 10-QSB-Unaudited June 30, 1999 June 30, 1998 -------------- ------------- Cash flows from operating activities: Net Income $ 562,893 721,241 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 643,219 561,900 Gain on Sale of marketable securities 18,237 10,572 Changes in assets and liabilities: (Increase)decrease in: Accounts receivable (102,883) (97,819) Gas stored underground 743,345 (295,278) Gas and appliance inventories 10,081 66,618 Prepaid expenses (111,376) 52,890 Unrecovered gas costs 191,819 (227,221) Prepaid income taxes 55,534 175,712 Deferred charges-pension and other 590,474 1,049,868 Other assets (1,372) (42,924) Increase(decrease) in: Accounts payable 206,586 (412,039) Accrued general taxes 112,630 245,066 Supplier refunds due customers (70,731) 75,853 Deferred income taxes (486,447) (151,997) Other liabilities and deferred credits 579,391 (12,427) ------------ ----------- Net cash provided by operating activities 2,941,401 1,720,015 Cash flows from investing activities: Purchase of marketable securities, net (74,033) (109,500) Acquisitions of businesses, net of cash acquire (468,334) 0 Capital expenditures, net of minor disposals (1,049,019) (2,388,039) ------------ ------------ Net cash used in investing activities (1,591,386) (2,497,539) Cash flows from financing activities: Net borrowings (repayments)under line-of-credit agreements (1,145,000) 275,000 Dividends paid (598,000) (448,501) Borrowings(repay) under long-term debt agreements 368,524 1,104,983 ------------ ------------ Net cash provided by financing activities (1,374,476) 931,482 Net increase(decrease) in cash (24,461) 153,958 Cash at beginning of period 284,426 262,752 ------------ -------------- Cash at end of period $ 259,965 416,710 ------------ ------------- Supplemental disclosures of cash flow information: Cash paid during period for: Interest 857,131 683,910 Income taxes 221,357 310,000 Non cash investing and financing activities: Acquisition of business financed by seller 1,056,666 0 CORNING NATURAL GAS CORPORATION Statement of Comprehensive Income(Loss) Unaudited Form 10 QSB Quarter Ended Nine Months Ended 06/30/99 06/30/98 06/30/99 06/30/98 ------------------ ----------------- Net Income(loss) $ (89,277) (96,427) 562,893 721,241 Other comprehensive income(loss), net of tax: Unrealized gains(losses) on securities: 2,588 (12,360) 77,587 6,878 ------------------ ------------------ Comprehensive Income(loss) $ (86,689) (108,787) 640,480 728,119 -----END PRIVACY-ENHANCED MESSAGE-----