-----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, TxlRzkrB1zdJWCEtzAgjevHXzgCFr+ob4Z1s3dxicZxyFy9HjEmR+sMolxFXhh2B I6qo4R3tGIbHWJ0emHlgvQ== 0000941158-99-000014.txt : 19990222 0000941158-99-000014.hdr.sgml : 19990222 ACCESSION NUMBER: 0000941158-99-000014 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19990219 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/A SEC ACT: SEC FILE NUMBER: 001-08680 FILM NUMBER: 99545825 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/A 1 FORM 10-Q/A 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 September 30, 1998 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 September 30, 1998 - 15,999,444 PART I FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS Balance Sheets 3 - 4 Statements of Operations 5 Statements of Stockholders' Equity 6 Statements of Cash Flows 7 Selected Notes to Financial Statements 8 - 9 Item 2. MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 9 - 13 PART II OTHER INFORMATION Item 1. Legal Proceedings 14 Item 5. Other Information 14 Item 6. Exhibits and Reports on Form 8-K 14 HIGH PLAINS CORPORATION Balance Sheets (Unaudited) September 30, 1998 and June 30, 1998
September 30, June 30, Assets 1998 1998 (Unaudited) ** Current Assets: Cash and cash equivalents $ 739,880 $ 674,894 Accounts Receivable Trade (less allowance of $75,000) 6,547,627 4,500,579 Production credits and incentives 758,692 829,849 Inventories 3,692,801 6,328,232 Current portion of long-term notes receivable 7,919 31,307 Prepaid expenses 1,081,018 85,168 Refundable income tax -0- 30,000 Total current assets 12,827,937 12,480,029 Property, plant and equipment, at cost: Land and land improvements 433,496 433,496 Ethanol plants 93,538,533 92,906,633 Other equipment 631,226 473,345 Office equipment 289,280 279,278 Leasehold improvements 48,002 48,002 94,940,537 94,140,754 Less accumulated depreciation (24,747,067) (23,819,484) Net property, plant and equipment 70,193,470 70,321,270 Other assets: Equipment held for resale 202,321 264,554 Deferred loan costs (less accumulated amortization of $46,796 and $38,095, respectively) 115,923 117,890 Other 32,196 65,886 Total other assets 350,440 448,330 $83,371,847 $83,249,629
[FN] See accompanying notes to financial statements. ** From audited financial statements. HIGH PLAINS CORPORATION Balance Sheets Continued (Unaudited) September 30, 1998 and June 30, 1998
September 30, June 30, Liabilities and Stockholders' Equity 1998 1998 (Unaudited) ** Current liabilities: Revolving lines-of-credit $ 9,900,000 $ 9,000,000 Current maturities of capital lease obligations 510,569 500,852 Accounts payable 8,235,048 8,364,074 Accrued interest 225,344 223,722 Accrued payroll and property taxes 910,881 822,971 Deferred income taxes payable 75,000 -0- Total current liabilities 19,856,842 18,911,619 Revolving line-of-credit 8,850,000 9,700,000 Capital lease obligations, less current maturities 1,871,190 2,002,623 Other 405,240 364,240 11,126,430 12,066,863 Stockholders' equity: Common stock, $.10 par value, authorized 50,000,000 shares; issued 16,410,622 shares at September 30, 1998 and June 30, 1998, of which 411,178 shares were held as treasury stock at September 30, 1998 and June 30, 1998 1,641,062 1,641,062 Additional paid-in capital 37,457,167 37,457,167 Retained earnings 14,300,310 14,170,697 53,398,539 53,268,926 Less: Treasury stock - at cost (863,911) (863,911) Deferred compensation (146,053) (133,868) Total Stockholders' equity 52,388,575 52,271,147 $83,371,847 $83,249,629
[FN] See accompanying notes to financial statements. ** From audited financial statements. HIGH PLAINS CORPORATION Statements of Operations (Unaudited) Three Months Ended September 30, 1998 and 1997
Three Months Three Months Ended Ended September 30, September 30, 1998 1997 Net sales and revenues $26,389,859 $22,570,837 Cost of products sold 25,679,801 20,506,099 Gross profit 710,058 2,064,738 Selling, general and administrative expenses 457,461 450,128 Operating income (loss) 252,597 1,614,610 Other income (expense): Interest and other income 251,615 30,937 Interest expense (442,599) (342,588) Gain on sale of equipment 143,000 -0- (47,984) (311,651) Net earnings before income taxes 204,613 1,302,959 Income tax (expense) benefit (75,000) 67,922 Net earnings $ 129,613 $ 1,370,881 Basic and diluted earnings per share: $ .01 $ .09
[FN] See accompanying notes to financial statements. HIGH PLAINS CORPORATION Statement of Stockholders' Equity (Unaudited) Three Months Ended September 30, 1998
Common Stock Additional Number Paid-in Retained Treasury Deferred of Shares Amount Capital Earnings Stock Compensation Total Balance, June 30, 1998 16,410,622 $ 1,641,062 $ 37,457,167 $ 14,170,697 $ (863,911) $ (133,868) $ 52,271,147 Employee Stock purchase (23,351) (23,351) Amortization of deferred compensation 11,166 11,166 Net Earnings for the Quarter 129,613 129,613 Balance, September 30, 1998 16,410,622 $ 1,641,062 $ 37,457,167 $ 14,300,310 $ (863,911) $ (146,053) $ 52,388,575
[FN] See accompanying notes to financial statements. HIGH PLAINS CORPORATION Statements of Cash Flows (Unaudited) Three Months Ended September 30, 1998 and 1997
1998 1997 Cash flows from operating activities: Net earnings $ 129,613 $ 1,370,881 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 936,283 850,868 Amortization of deferred compensation 11,166 17,713 Gain on sale of equipment (143,000) -0- Debt forgiveness (231,359) -0- Compensation expense on stock options granted -0- 39,131 Payments received on notes receivable 23,388 28,294 Deferred income taxes 75,000 -0- Changes in operating assets and liabilities: Accounts receivable (1,975,891) (673,607) Inventories 2,635,431 1,035,447 Refundable income tax 30,000 145,328 Prepaid expenses (995,850) (290,845) Accounts payable 102,333 (1,121,354) Accrued liabilities 89,532 (97,589) Net cash provided by operating activities 686,646 1,304,267 Cash flows from investing activities: Proceeds from sale of equipment 205,233 4,679 Acquisition of property, plant and equipment (799,783) (1,442,512) Decrease in other non-current assets 26,957 -0- Net cash used in investing activities (567,593) (1,437,833) Cash flows from financing activities: Proceeds from revolving lines-of-credit 900,000 -0- Payment on revolving line-of-credit (850,000) (550,000) Payments on capital lease obligations (121,716) (127,619) Increase in other non-current liabilities 17,649 7,079 Net cash provided by financing activities (54,067) (670,540) Increase in cash and cash equivalents 64,986 (804,104) Cash and cash equivalents: Beginning of quarter 674,894 2,389,758 End of quarter $ 739,880 $ 1,585,654
[FN] See accompanying notes to financial statements. HIGH PLAINS CORPORATION Selected Notes to 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 period ended September 30, 1998 are not necessarily indicative of the operating results for the entire year. (2) Debt Forgiveness The Company recorded $231,359 in debt forgiveness related to funds advanced by a customer to the Company for the acquisition and installation of certain process equipment. The debt forgiveness results from the renegotiation of an existing supply agreement between the Company and the customer. (3) Revolving-lines-of-credit At September 30, 1998 the Company failed to meet certain financial covenant ratios as required under the Company's existing lending agreement. However, on November 10, 1998 the lender waived its rights to declare the debt due and payable based on these covenant violations at September 30, 1998. The Company is currently negotiating with the lender for the expansion of the Company's existing lines-of-credit and reset certain covenant requirements to potentially avoid future violations. (4) Stock-Based Compensation The Company continues to account for stock-based compensation for employees using the intrinsic value method prescribed in APB No. 25. Accordingly, compensation cost for stock options is measured as the excess, if any, of the quoted market price of the Company's stock at the date of grant over the amount an employee must pay to acquire the stock. Had compensation cost for stock-based compensation been determined based on the fair value grant date, consistent with the provisions of FAS 123, the Company's net earnings and earnings per share above would have been reduced to the proforma amounts below:
For the quarters ending September 30, 1998 1997 Net earnings As reported $129,613 $1,370,881 Pro forma 113,242 1,240,957 Diluted earnings per share: As reported $ .01 $ .09 Pro forma .01 .08
The Company's basic earnings per share for the pro forma information noted above are the same as the Company's diluted earnings per share for all the periods disclosed. (5) Earnings Per Share The Company, as required under FASB Statement No. 128 Earnings Per Share (FAS 128) has replaced the presentation of primary earnings per share (EPS) with Basic EPS and Diluted EPS. Under FAS 128 both the basic and diluted must be presented in the financial statements. Also, under the FAS 128 all prior period EPS data presented in the financial statements must be restated for comparative purposes. The diluted earnings per share for the three months ended September 30, 1998 and 1997 have been calculated based on 16,181,721 and 16,009,802 diluted shares outstanding, respectively, The Company's diluted earnings per share in the financial statements contained herein are the same as the basic earnings per share for each of the periods disclosed. Part I MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Item 2. Forward-looking Statements Forward-looking statements in this Form 10Q, future filings including but not limited to, the Company's annual 10K, Proxy Statement, and 8K filings by the Company with the Securities and Exchange Commission, the Company's press releases and oral statements by authorized officers of the Company are intended to be subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements involve risks and uncertainty, including without limitation, the risk of a significant natural disaster, the inability of the Company to ensure against certain risks, the adequacy of its loss reserves, fluctuations in commodity prices, change in market prices or demand for motor fuels and ethanol, legislative changes regarding air quality, fuel specifications or incentive programs, as well as general market conditions, competition and pricing. The Company believes that forward-looking statements made by it are based upon reasonable expectations. However, no assurances can be given that actual results will not differ materially from those contained in such forward- looking statements. The words "estimate", "anticipate", "expect", "predict", "believe" and similar expressions are intended to identify forward-looking statements. THREE MONTHS ENDED SEPTEMBER 30, 1998 and 1997 Net Sales and Revenues and Operating Expenses and Results of Operations. During the three months ended September 30, 1998, approximately 17.1 million gallons of fuel grade ethanol were sold at an average price of $1.05 per gallon, compared to approximately 12.6 million gallons sold during the same period ended September 30, 1997, at an average price of $1.13 per gallon. Industrial grade ethanol sold during the three months ended September 30, 1998 totaled approximately .8 million gallons at an average price of $1.38 per gallon, compared to approximately .84 million gallons sold during the same period ended at September 30, 1997 at an average price of $1.31 per gallon. Additionally, the Company purchased and sold approximately 1.0 million gallons of fuel grade ethanol with no significant gain or loss on the transactions. Higher net sales and revenues for the three months ended September 30, 1998 compared to the same period ended September 30, 1997 were primarily due to the 2.9 million gallons of fuel ethanol sold at the Portales, Mew Mexico plant during the three months ended September 30, 1998. The Portales facility was acquired in December, 1997 and became operational in March, 1998. The increased net sales and revenues for the period ending September 30, 1998 were off set by a 7% decline in the average sale price for fuel grade ethanol experienced in the Company's fiscal 1999 first quarter compared to the average sale price for fuel grade ethanol in same period in fiscal 1998. Cost of products sold as a percentage of net sales and revenues was 97.3% and 90.9% for the three month periods ended September 30, 1998 and 1997, respectively. The increase in cost of products sold as a percentage of net sales and revenues was due to decreased per gallon revenues as described above, offset by lower average costs per bushel of grain. Average grain costs for the period ended September 30, 1998 were $2.29 per bushel compared to an average cost of $2.44 per bushel for the period ended September 30, 1997. Selling, general and administrative expenses were slightly higher for the three months ended September 30, 1998, compared to the same period ended September 30, 1997. The slight increase is a result of increased staffing for the period ended September 30, 1998 compared to staffing for the period ended September 30, 1997. Net earnings decreased from 6.1% as a percentage of net sales and revenues for the three months ended September 30, 1997 to net earnings of 0.5% as a percentage of net sales and revenues for the same period ended September 30, 1998. The decrease in net earnings as a percentage of net sales and revenues results primarily from a decrease in gross profits for the 1999 period from 1998. Liquidity and Capital Resources The Company's primary source of funds during the first fiscal quarter of 1999 was cash flow from operations and advances from revolving lines-of- credit. At September 30, 1998, the Company had negative working capital of approximately ($7.0) million. Working capital decreased compared to the June 30, 1998 negative working capital of ($6.4) million. This decrease is the net effect of a decrease in inventories, increase in accounts receivables and the increase in borrowings on the Company's revolving lines-of-credit. Capital expenditures in the first three months of fiscal 1999 amounted to $0.8 million compared to $1.4 million, for the same period in fiscal 1998. These expenditures were primarily for modifications at the three plants. 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, seek additional funding through sale of stock, exercise of options held by directors and officers, or issue debt and/or equity securities as additional sources of financing are needed. Seasonality Ethanol prices increased as expected towards the end of the first fiscal quarter for 1999. Prices for ethanol sold in mandated oxygen markets historically increase during the months September through March due to the Federal Oxygen Program. Although these seasonal price increases have occurred, both gasoline and ethanol prices are somewhat lower than those experienced in the summer and fall of 1997. Since ethanol replaces gasoline, changes in gasoline have historically resulted in similar changes in the price paid for ethanol. Gasoline prices have recently trended lower, and levels of on-hand finished ethanol inventory appear to be slightly higher than normal, which could lead to some softening of the ethanol market during the third fiscal quarter for 1999. The Company has contracted to sell virtually all of the Company's ethanol production volume into January 1999, and substantial amounts thereafter, at prices which management believes to be favorable. The Company's feedstock prices continued to decline significantly from fiscal 1998, as the corn markets reached a ten year low near the end of this first fiscal quarter for 1999. After a slight rebound in October, grain prices again declined and are expected to weaken further as harvest continues due to the anticipated near record harvest. While weather, carryouts, exports and other factors can still significantly affect grain prices, the U.S. Department of Agriculture crop reports predict the second largest corn crop in the last ten years along with a large carryout. As part of a risk management program, the Company has contracted grain deliveries for all three plants for a substantial portion of fiscal year 1999. The Company locked in prices for virtually all grain deliveries into January 1999. However, the Company has reserved the right to price most of the remainder of the contracted purchases in anticipation of potentially lower prices. Prices for the Company's distillers grain by-products (DDGS), which historically fluctuate with the price of corn, are also currently lower than prices received during fiscal 1998. These fluctuations in the price of DDGS are expected to provide some hedge for the Company against the possibility of an increase in grain prices. However, an oversupply of competing feed ingredients currently exists in the marketplace, and if this oversupply continues, it could lessen the ability of DDGS to offset the impact of higher corn prices. Year 2000 Issues The Company continues to assess its exposure to Year 2000 (Y2K) compliance issues. In the manufacturing process, preliminary tests have demonstrated that the main computer process systems continue to operate without interruption and with no identifiable disruption to processing controls. The cost of purchasing Y2K upgrades for this software, which the Company may acquire as part of its routine upgrades and maintenance contracts is approximately $11,000. In addition, diagnostic procedures are on going at the plant level to identify and test any imbedded technologies, which may also require some type of upgrade or replacement due to the Y2K issue. This phase of the Company's Y2K compliance program is expected to be completed during the first quarter of calendar 1999. Due to insufficient information, the Company is currently unable to estimate the impact on operations, if any, or estimate the cost for potential Year 2000 issues related to imbedded chips and similar technologies. During fiscal 1998, the Company upgraded its existing financial reporting software to a Y2K compliant version, at a cost of approximately $5,000. Upgrades to other existing financial software packages and PC hardware for compliance with Year 2000 are estimated not to exceed approximately $10,000. The Company has also begun the process of making inquiries and gathering information regarding Y2K compliance exposures faced by its vendors and customers. Management has insufficient information at this time to assess the degree to which vendors and customers have addressed or are addressing Y2K compliance issues, and to fully evaluate the risk of disruption to operations that those businesses might face as a result of Year 2000 issues. At September 30, 1998, the Company had not developed any contingency plans to handle the most reasonably likely "worst case" scenarios. Due to the risk of loss of certain utilities and the currently unknown status of the ability of the utility companies to continue to supply needed services, the Company expects to develop a contingency plan by mid-1999. Except for the services previously noted, no major part or critical operation of any segment of the Company's business is reliant on a single source for raw materials, supplies, or services. Nonetheless, there can be no assurance that the Company will be able to identify all Y2K compliance risks, or, that all contingency plans will assure uninterrupted business operations across the millennium. PART II OTHER INFORMATION Item 1. LEGAL PROCEEDINGS No new legal proceedings were instigated during the quarter ended September 30, 1998 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 Not applicable. Item 5. SUBSEQUENT EVENTS. None. Item 6. EXHIBITS AND REPORTS ON FORM 8-K a). Exhibit 27-1 Financial Data Schedule b). Reports on Form 8-K and 8-KA. During the quarter for which this report is filed, the Company filed the following Form 8-K's: July 1, 1997 Announcement of formation of a new four- person senior management team. August 14, 1998 Company announced fiscal year end earnings and earnings per share at June 30, 1998. 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 11, 1999 /s/Gary R. Smith President Chief Executive Officer EX-27 2
5 3-MOS JUN-30-1999 SEP-30-1998 739,880 0 7,389,238 75,000 3,692,801 12,827,937 93,538,533 24,747,067 83,371,847 19,856,842 18,750,000 0 0 1,641,062 50,747,513 83,371,847 26,389,859 26,389,859 25,679,801 25,679,801 457,461 0 442,599 204,613 75,000 0 0 0 0 129,613 .01 .01
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