-----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, NOWSchbGTVqHOQBtWJwdZ/4M7gBRPYRir+Iaz4ip0ckmG8ZuhkK5mUJedOvOVBBf fCQCEz7iFVYLYb/PioM1Ww== 0000941158-96-000002.txt : 19960216 0000941158-96-000002.hdr.sgml : 19960216 ACCESSION NUMBER: 0000941158-96-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960214 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: HIGH PLAINS CORP CENTRAL INDEX KEY: 0000317551 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL ORGANIC CHEMICALS [2860] IRS NUMBER: 480901658 STATE OF INCORPORATION: KS FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08680 FILM NUMBER: 96518793 BUSINESS ADDRESS: STREET 1: 200 W DOUGLAS STREET 2: STE 820 CITY: WICHITA STATE: KS ZIP: 67202 BUSINESS PHONE: 3162694310 MAIL ADDRESS: STREET 1: 200 W DOUGLAS STREET 2: STE 820 CITY: WICHITA STATE: KS ZIP: 67202 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN GASOHOL REFINERS INC DATE OF NAME CHANGE: 19830807 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the quarterly period ended December 31, 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 1-8680 HIGH PLAINS CORPORATION (Exact name of registrant as specified in its charter) Kansas #48-0901658 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 200 W. Douglas 67202 Suite #820 (Zip Code) Wichita, Kansas (Address of principal executive offices) (316)269-4310 (Registrant's telephone number) 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 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 Common Stock, Par Value $.10 per share, Outstanding at December 31, 1995 - 15,780,519 PART I FINANCIAL INFORMATION Item 1. CONSOLIDATED FINANCIAL STATEMENTS Consolidated Balance Sheets 3-4 Consolidated Statements of Operations 5 Consolidated Statements of Stockholders' Equity 6 Consolidated Statements of Cash Flows 7 Selected Notes to Consolidated Financial Statements 8 Item 2. MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 9-12 PART II OTHER INFORMATION Item 1. Legal Proceedings 13 Item 4. Submission of Matters to a Vote of Security Holders 13 HIGH PLAINS CORPORATION Balance Sheets (Unaudited) December 31, 1995 and June 30, 1995
December 31, June 30, Assets 1995 1995 (Unaudited) ** Current Assets: Cash $ 1,478,020 $ 600,381 Trade accounts receivable (less allowance of $100,000 and $110,000 respectively) 5,941,363 3,948,761 Inventories 3,240,345 2,645,277 Current portion of long-term notes receivable 101,502 96,691 Prepaid expenses 406,070 384,859 Total current assets 11,167,300 7,675,969 Property, plant and equipment, at cost: Land and land improvements 142,283 142,283 Ethanol plant 74,968,469 72,387,277 Other facilities and equipment 312,846 300,210 Office equipment 232,333 231,284 Leasehold improvements 48,002 48,002 75,703,933 73,109,056 Less accumulated depreciation 16,197,536 14,806,417 Net property, plant and equipment 59,506,397 58,302,639 Other assets: Property and equipment held for resale 792,263 798,763 Deferred loan costs (less accumulated amortization of $115,251 and $65,857 respectively) 362,216 411,610 Long-term notes receivable 213,680 265,711 Other 57,360 62,609 Total other assets 1,425,519 1,538,693 $72,099,216 $67,517,301 See accompanying notes to financial statements. ** From audited financial statements.
HIGH PLAINS CORPORATION Balance Sheets, Continued (Unaudited) December 31, 1995 and June 30, 1995
December 31, June 30, Liabilities and Stockholders' Equity 1995 1995 (Unaudited) ** Current liabilities: Current maturities of short-term debt $ 1,261,052 $ -0- Current maturities of long-term debt 3,572,444 3,876,972 Accounts payable 5,231,236 3,796,048 Accrued interest 185,191 185,163 Accrued payroll and property taxes 612,902 356,108 Total current liabilities 10,862,825 8,214,291 Long-term debt, excluding current maturities 17,266,807 19,052,272 Stockholders' equity: Common stock, $.10 par value, authorized 50,000,000 shares; issued 16,140,289 shares and 15,470,947 shares at December 31, 1995, and June 30, 1995, respectively, of which 359,770 and 289,770 shares were held as treasury stock at December 31, 1995 and June 30, 1995, respectively 1,614,029 1,547,095 Additional paid-in capital 36,486,564 34,738,760 Retained earnings 6,489,618 4,209,260 44,590,211 40,495,115 Less: Treasury stock - at cost (620,627) (244,377) Total stockholders' equity 43,969,584 40,250,738 $72,099,216 $67,517,301 See accompanying notes to financial statements. ** From audited financial statements.
HIGH PLAINS CORPORATION Statements of Operations (Unaudited) Three Months Ended December 31, 1995 and 1994 and Six Months Ended December 31, 1995 and 1994
Three Months Ended Six Months Ended December 31, December 31, 1995 1994 1995 1994 Net sales and revenues $23,594,686 $9,028,515 $43,656,631 $17,099,441 Cost of sales 20,776,632 6,195,835 39,491,705 13,208,945 Gross profit 2,818,054 2,832,680 4,164,926 3,890,496 Selling, general and administrative expenses 408,490 338,908 715,281 727,783 Operating income 2,409,564 2,493,772 3,449,645 3,162,713 Other income (deductions): Interest expense (540,593) -0- (1,164,231) -0- Gain on sale of equipment -0- -0- -0- 73,592 Interest and other income 25,558 18,908 41,204 20,273 (515,035) 18,908 (1,123,027) 93,865 Net earnings before income taxes 1,894,529 2,512,680 2,326,618 3,256,578 Income tax expense 37,757 58,367 46,260 73,246 Net earnings $ 1,856,772 $2,454,313 $ 2,280,358 $ 3,183,332 Earnings per common and dilutive common equivalent share $ .12 $ .16 $ .15 $ .21 Weighted average shares outstanding 16,022,106 15,884,127 15,715,761 15,489,338 See accompanying notes to financial statements.
HIGH PLAINS CORPORATION Statements of Stockholders' Equity (Unaudited) Six Months Ended December 31, 1995
Common Stock Additional Number Amount Paid-in Retained Treasury Total of Shares Capital Earnings Stock Balance, June 30, 1995 15,470,947 $1,547,095 $34,738,760 $4,209,260 $(244,377) $40,250,738 Exercise of options 525,342 52,534 1,589,717 1,642,251 Net earnings for the quarter 423,586 423,586 Balance, September 30, 1995 15,996,289 $1,599,629 $36,328,477 $4,632,846 $(244,377) $42,316,575 Exercise of options 144,000 14,400 158,087 172,487 Common stock surrender (376,250) (376,250) Net earnings for the quarter 1,856,772 1,856,772 Balance, December 31, 1995 16,140,289 $1,614,029 $36,486,564 $6,489,618 $(620,627) $43,969,584 See accompanying notes to financial statements.
HIGH PLAINS CORPORATION Statements of Cash Flows (Unaudited) Six Months Ended December 31, 1995 and 1994
1995 1994 Cash flows from operating activities: Net earnings $ 2,280,358 $ 3,183,332 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,440,513 657,156 Provision for bad debt (10,000) 0 (Gain) on sale of equipment 0 (73,592) Payments received on notes receivables 47,220 0 Changes in operating assets and liabilities: Trade accounts receivable (1,982,602) (3,692,432) Short-term investments 0 (240,434) Inventories (595,068) (532,343) Refundable income taxes 0 107,825 Prepaid expenses (21,211) 174,507 Accounts payable 1,435,188 1,405,340 Accrued liabilities (119,428) 200,160 Net cash provided by operating activities 2,474,970 1,189,519 Cash flows from investing activities: Proceeds from sale of equipment 56,500 144,685 Acquisition of property, plant and equipment (2,644,877) (12,988,057) (Increase) decrease in other non-current assets 5,249 (227,312) Net cash used in investing activities (2,583,128) (13,070,684) Cash flows from financing activities: Proceeds from short-term debt 2,261,052 0 Payments on short-term debt (1,000,000) 0 Proceeds from long-term debt 0 12,668,328 Payments on long-term debt (2,089,993) (595,238) Proceeds from exercise of stock options 1,814,738 35,478 Net cash provided by financing activities 985,797 12,108,568 Increase in cash and cash equivalents 877,639 227,403 Cash and cash equivalents: Beginning of period 600,381 131,105 End of period $ 1,478,020 $ 358,508 See accompanying notes to financial statements.
HIGH PLAINS CORPORATION Selected Notes to Consolidated Financial Statements (1) BASIS OF PRESENTATION The accompanying financial statements have been prepared by High Plains Corporation ("Company") without audit. In the opinion of management, all adjustments (which include only normally recurring adjustments) necessary to present fairly the financial position, results of operations and changes in financial position for the periods presented, have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principals have been condensed or omitted. The results of operations for the six months ended December 31, 1995 are not necessarily indicative of the operating results for the entire year. CHANGE IN ACCOUNTING ESTIMATE Effective July 1, 1994, the Company revised its estimate of the useful lives of certain production facilities, machinery and equipment. Previously, these assets were in one class and depreciated over 20 years. These assets have now been componentized and assigned estimated useful lives of 5 to 40 years. These revisions were made to more properly reflect the true economic lives of the assets and to better align the Company's depreciable lives with the predominant practice in the industry. The effect of this change was to reduce depreciation and thus increase net income by approximately $165,657 or $.01 per share for the three months ended December 31, 1995 and 1994. (2) STOCK OPTIONS On October 11, 1995, 86,400 options were exercised at $.6076 per share, with corresponding reloads granted for 86,400 options at $5.625 per share. Additionally, on October 19, 1995, 57,600 options were exercised at $2.083 per share and were not subject to reload provisions. (3) STOCK SURRENDER On December 1, 1995, 70,000 shares of Common Stock were surrendered to the Company at the then fair market value of $5.375 per share, by several employees. These shares were accepted in lieu of cash, in satisfaction of certain employee withholding tax obligations the Company was required to collect as a result of compensation arising from the exercise of stock options in calendar 1995. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Item 2. Six Months Ended December 31, 1995 and 1994 Net Sales and Operating Expenses. Net sales and revenues for the six months ended December 31, 1995, were higher than net sales for the same period ended December 31, 1994. During the six months ended December 31, 1995, 26,754,314 gallons of ethanol were sold at an average price of $1.18 per gallon compared to 9,415,324 gallons sold at an average price of $1.34, for the same period ending December 31, 1994. Gallons sold increased 184% due to the increase in production resulting from the York plant operating at near capacity for the entire period ending December 31, 1995 compared to production of 1,813,339 gallons from trial production runs during the final construction phase in late November and December of 1994. Cost of sales as a percentage of net sales was 90.5% and 77.2% for the six month periods ended December 31, 1995, and 1994, respectively. The increase in the cost of sales as a percentage of net sales was primarily due to the increase in average grain prices and the decline in the average sale price for ethanol. Average cost of grain increased to $2.73 per bushel for the six months ended December 31, 1995, up from $2.24 per bushel for the same period in 1994. Selling, general and administrative expenses decreased 1.7% for the six months ended December 31, 1995, compared to the same period ended December 31, 1994. This decrease is the result of the elimination of selling expenses related to the Company's in-house marketing of its by-products in fiscal 1994. Net Earnings. Net earnings decreased 28% for the six months ended December 31, 1995, compared to the same period in 1994. Net earnings decreased from 18.6% to 5.2% of net sales and revenues, due to the increase in cost of sales, combined with a decrease in revenues in the 1995 period compared to the same period in 1994. Earnings per share at December 31, 1995, were 28.5% lower than earnings per share for the same period in 1994 due to the decline in net earnings. MATERIAL CHANGES IN RESULTS AND OPERATIONS Three Months Ended December 31, 1995 and 1994 Net Sales and Operating Expenses and Results of Operations. Net sales and revenues for the three months ended December 31, 1995, decreased slightly compared to the same period in 1994. During the quarter ended December 31, 1995, 17,520,259 gallons of ethanol were sold at average price of $1.21 per gallon compared to 4,842,576 gallons sold during the same period in 1994 at an average price of $1.38 per gallon. Gallons sold increased 262% due to the increase in production from the York plant operating at near capacity for the three months ended December 31, 1995 compared to production of 1,813,339 gallons from trial production runs during the final construction phase in late November and December of 1994. Cost of sales as a percentage of net sales and revenues was 88.1% and 68.6% for the three month periods ended December 31, 1995 and 1994, respectively. The increase in cost of sales as a percentage of sales is primarily due to an increase in the cost of grain and the decline in the average sale price for ethanol. The average cost of grain increased 34.1% to $2.79 per bushel for the three months ended December 31, 1995, up from $2.08 per bushel for the same period ended December 31, 1994. Selling, general and administrative expenses increased 20.5% for the three months ended December 31, 1995, compared to the period ended December 31, 1994. The increase was primarily the net effect of a decrease in selling expenses related to the elimination of the Company's in-house marketing of its DDG's and solubles in fiscal 1994 and increases in administrative overhead related to the York plant operations. Net Earnings. Net earnings declined 24.3% for the three months ended December 31, 1995 from the prior period in 1994. Net earnings decreased from 27.2% to 7.9% of net sales, due to the decline in gross profit in the 1995 period compared to the 1994 level. Earnings per share for the three months ended December 31, 1995 decreased 25% compared to earnings per share for the three months ending December 31, 1994, as a result of the decrease in net earnings. Liquidity and Capital Resources The Company's primary sources of funds during the last fiscal quarter were advances totaling $2,261,052 on it's revolving loan with Bank One, Indianapolis, N.A. and cash flow from operations. At December 31, 1995, the Company had a working capital of $304,475 compared to a working capital deficit of $(538,322) at June 30, 1995. The increase in the working capital was primarily as a result of an increase in trade accounts receivables. Cash flow from operating activities amounted to $2,474,970 in the first six months of fiscal 1995 compared to $1,189,519 for the same period in fiscal 1994. The increase in cash flow was a result of the increase in trade accounts receivables. Capital expenditures in the first six months of fiscal 1995 amounted to $2,644,877 compared with $12,988,057 for the same period in fiscal 1994. These expenditures were made for minor modifications and completion of the facility in York, Nebraska. This facility was virtually complete and operational at December 31, 1994. In the opinion of management, funds expected to be generated from future operations and the Company's ability to rely upon future secured borrowings will provide adequate liquidity for the foreseeable future. The Company may, however, issue debt and equity securities as additional sources of financing as needed. Seasonality Ethanol prices on products sold into oxygen markets, mandated under the Federal Oxygen Program did not begin their seasonal increase until early October due to increased competition and larger inventories carried through the summer months. However, upward price movements leveled off below price levels experienced for the same period in fiscal 1994 due to these same factors. Beginning in March, 1996, the Company anticipates demand for ETBE, a low vapor pressure oxygenate, to increase in response to Federal and State air quality program requiring gasoline fuels to have a low vapor pressure. Consequently, it is anticipated that ethanol, a major component of ETBE will experience a similar increase in demand. Additionally, the Company believes that the upcoming summer months will experience stronger ethanol prices compared to previous summers due to indications from competitors of plans for reduced ethanol production and from the anticipated stronger ethanol demand discussed above. Future Operating Results The Company has continued to forward contract for its anticipated feedstock requirements to minimize the effect of rising grain prices. At this time, the Company has forward contracted for approximately 80% of its expected grain requirements through May, 1997, at price levels which should allow the Company to operate profitably. The Company's DDG prices historically have moved in the same direction as grain prices, and accordingly are now providing the Company with additiional revenue. Higher DDG prices have made it possible for the Company to cover approximately 40% of the grain cost increases. As grain prices continue to rise, the Company is evaluating on an ongoing basis, profit margins at 100% of plant production capacities versus reduced production levels which would not exceed the forward contracted grain supplies. Due to uncertainties in the price movement of grain feedstock and ethanol, future trends for revenues and profitability are difficult to predict. Should the Company determine that gross profitability would be positively impacted by avoiding cash grains prices on the remaining grain requirements not covered under forward contracts, the Company may option to temporarily produce below plant capacities. PART II OTHER INFORMATION Item 1. LEGAL PROCEEDINGS No new legal proceedings were instigated during the quarter ended December 31, 1995 which would be considered other than in the ordinary course of the Company's business. Item 2. CHANGES IN SECURITIES Not applicable. Item 3. DEFAULTS UPON SENIOR SECURITIES Not applicable. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The Company held its Annual Meeting of Stockholders on November 17, 1995. The meeting involved the election of two directors, Daniel O. Skolness, and H.T. Ritchie. Voting results:
BROKER FOR AGAINST ABSTENTIONS NONVOTES D.O. Skolness 11,489,770 126,424 -0- -0- H.T. Ritchie 11,488,378 127,816 -0- -0-
The following details the issues which were presented to stockholders for vote and the results of that vote at the aforementioned annual meeting: (1) Approve the adoption of an Employee Stock Purchase Plan for key managment employees. (2) Ratify the appointment of Allen, Gibbs & Houlik, LC as the Company's independent public accountants.
BROKER RESULTS FOR AGAINST ABSTENTIONS NONVOTES (1) 10,553,655 931,689 130,850 2,497,292 (2) 11,485,928 72,732 57,534 2,497,382
Item 5. OTHER INFORMATION None. Item 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibit 27-1 Financial Data Schedule b) Reports on Form 8-K. During the quarter for which this report is filed, the Company filed a Form 8-K on November 10, 1995. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report be signed on its behalf by the undersigned thereunto duly authorized. HIGH PLAINS CORPORATION Date February 9, 1996 /s/Raymond G. Friend Executive Vice President Chief Financial Officer EX-27 2
5 3-MOS SEP-30-1996 DEC-31-1995 1,478,020 0 6,142,865 100,000 3,240,345 11,167,300 75,703,933 16,197,536 72,099,216 10,862,825 17,266,807 0 0 1,614,029 42,355,555 72,099,216 23,594,686 23,594,686 20,776,632 20,776,632 408,490 0 540,593 1,894,529 37,757 1,856,772 0 0 0 1,856,772 .12 .12
-----END PRIVACY-ENHANCED MESSAGE-----