-----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, CXb6nI3B3Tq4/WToxrpLrw1Kr0S+hbTIVqWws2G1/0Qk0/yTYynaUSF/ABY+WBGj zWw1/NDEffalhFSsHMd/UA== 0000060653-97-000016.txt : 19970814 0000060653-97-000016.hdr.sgml : 19970814 ACCESSION NUMBER: 0000060653-97-000016 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970813 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: COLONIAL GAS CO CENTRAL INDEX KEY: 0000060653 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS DISTRIBUTION [4924] IRS NUMBER: 041558100 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-10007 FILM NUMBER: 97658395 BUSINESS ADDRESS: STREET 1: 40 MARKET ST CITY: LOWELL STATE: MA ZIP: 01852 BUSINESS PHONE: 5084583171 FORMER COMPANY: FORMER CONFORMED NAME: LOWELL GAS CO DATE OF NAME CHANGE: 19811124 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 1997 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 0-10007 COLONIAL GAS COMPANY (Exact name of registrant as specified in its charter) Massachusetts 04-1558100 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 40 Market Street, Lowell, Massachusetts 01852 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (508) 322-3000 Former name, former address and former fiscal year, if changed since last report: Not applicable 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____ The number of shares of the registrant's common stock, $3.33 par value, outstanding as of July 1, 1997 was 8,601,590. COLONIAL GAS COMPANY INDEX PART I - FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Condensed Statements of Income - Three Months Ended June 30, 1997 and 1996 Six Months Ended June 30, 1997 and 1996 Twelve Months Ended June 30, 1997 and 1996 Consolidated Condensed Balance Sheets - June 30, 1997, December 31, 1996 and June 30, 1996 Consolidated Condensed Statements of Cash Flows - Six Months Ended June 30, 1997 and 1996 Twelve Months Ended June 30, 1997 and 1996 Notes to Consolidated Condensed Financial Statements Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K PART I - FINANCIAL INFORMATION Item 1. Financial Statements COLONIAL GAS COMPANY AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED) Three Months Ended June 30, 1997 1996 (In Thousands Except Per Share Amounts) Operating Revenues $27,212 $24,237 Cost of gas sold 16,317 13,899 Operating Margin 10,895 10,338 Operating Expenses: Operations 7,392 7,290 Maintenance 1,114 1,148 Depreciation and Amortization 2,973 2,765 Taxes, other than income 1,394 1,444 Total Operating Expenses 12,873 12,647 Income Taxes (1,431) (1,620) Utility Operating Loss (547) (689) Other Operating Income (Loss): Truck transportation revenues 451 2,670 Truck transportation expenses, including income taxes and interest 673 2,295 Truck transportation net (loss) income (222) 375 Other, net of income taxes 57 44 Total Other Operating (Loss) Income (165) 419 Non-Operating Income, Net 143 174 Loss Before Interest and Debt Expense (569) (96) Interest and Debt Expense 1,932 2,109 Net Loss $(2,501) $(2,205) Average Common Shares Outstanding 8,576 8,412 Loss per Average Common Share $ (0.29) $ (0.26) Dividends Paid per Common Share $ .335 $ .325 (See accompanying notes to consolidated condensed financial statements) COLONIAL GAS COMPANY AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED) Six Months Ended June 30, 1997 1996 (In Thousands Except Per Share Amounts) Operating Revenues $110,536 $101,815 Cost of gas sold 60,034 51,894 Operating Margin 50,502 49,921 Operating Expenses: Operations 15,119 16,407 Maintenance 2,260 2,266 Depreciation and Amortization 5,946 5,660 Taxes, other than income 2,775 2,839 Total Operating Expenses 26,100 27,172 Income Taxes 8,002 7,225 Utility Operating Income 16,400 15,524 Other Operating Income (Loss): Truck transportation revenues 1,790 6,247 Truck transportation expenses, including income taxes and interest 1,931 4,956 Truck transportation net (loss) income (141) 1,291 Other, net of income taxes 106 99 Total Other Operating (Loss) Income (35) 1,390 Non-Operating Income, Net 264 351 Income Before Interest and Debt Expense 16,629 17,265 Interest and Debt Expense 3,837 4,242 Net Income $12,792 $13,023 Average Common Shares Outstanding 8,554 8,395 Income per Average Common Share $ 1.50 $ 1.55 Dividends Paid per Common Share $ 0.660 $ 0.645 (See accompanying notes to consolidated condensed financial statements) COLONIAL GAS COMPANY AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED) Twelve Months Ended June 30, 1997 1996 (In Thousands Except Per Share Amounts) Operating Revenues $179,650 $173,351 Cost of gas sold 95,328 87,445 Operating Margin 84,322 85,906 Operating Expenses: Operations 30,095 32,017 Maintenance 4,471 4,430 Depreciation and Amortization 11,515 10,840 Taxes, other than income 5,307 5,237 Total Operating Expenses 51,388 52,524 Income Taxes 9,865 9,826 Utility Operating Income 23,069 23,556 Other Operating Income (Loss): Truck transportation revenues 6,575 11,175 Truck transportation expenses, including income taxes and interest 5,980 9,223 Truck transportation net income 595 1,952 Other, net of income taxes 216 150 Total Other Operating Income 811 2,102 Non-Operating Income, Net 672 924 Income Before Interest and Debt Expense 24,552 26,582 Interest and Debt Expense 8,305 8,961 Net Income $16,247 $17,621 Average Common Shares Outstanding 8,511 8,361 Income per Average Common Share $ 1.91 $ 2.11 Dividends Paid per Common Share $ 1.31 $ 1.285 (See accompanying notes to consolidated condensed financial statements) COLONIAL GAS COMPANY AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS ASSETS June 30, December 31, June 30, 1997 1996 1996 (Unaudited) (Unaudited) (In Thousands) Utility Property: At original cost $345,572 $333,319 $318,828 Accumulated depreciation (88,447) (82,336) (78,434) Net utility property 257,125 250,983 240,394 Non-Utility Property - Net 6,873 5,925 5,497 Net property 263,998 256,908 245,891 Capital Leases - Net 2,392 1,811 1,886 Current Assets: Cash and cash equivalents 100 3,541 8,416 Accounts receivable 16,629 17,719 15,073 Allowance for doubtful accounts (3,429) (2,715) (3,079) Accrued utility revenues 739 6,333 500 Unbilled gas costs 8,902 19,238 6,869 Fuel and other inventories 10,321 11,958 9,447 Prepayments and other current assets 5,946 11,484 5,068 Total current assets 39,208 67,558 42,294 Deferred Charges and Other Assets: Unrecovered deferred income taxes 9,386 9,774 10,174 Unrecovered Demand Side Management - costs 8,242 7,075 4,507 Unrecovered environmental expenses - incurred 3,397 4,011 3,457 Unrecovered environmental expenses - accrued 900 1,183 2,116 Unrecovered transition costs - accrued 4,500 4,500 3,600 Other 11,697 11,592 12,419 Total deferred charges and other assets 38,122 38,135 36,273 Total Assets $343,720 $364,412 $326,344 (See accompanying notes to consolidated condensed financial statements) COLONIAL GAS COMPANY AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS LIABILITIES AND CAPITALIZATION June 30, December 31, June 30, 1997 1996 1996 (Unaudited) (Unaudited) (In Thousands) Capitalization: Common equity: Common Stock - par value $3.33 per share Authorized - 15,000 shares Issued and outstanding - 8,602, 8,518 and 8,436 shares $28,643 $28,366 $28,092 Premium on common stock 55,669 54,221 52,719 Retained earnings 38,464 31,319 33,368 Total Common equity 122,776 113,906 114,179 Long-term debt 100,185 95,266 80,343 Total capitalization 222,961 209,172 194,522 Capital Lease Obligations 1,471 930 1,097 Current Liabilities: Current maturities of long-term debt 15,158 5,152 5,147 Current capital lease obligations 921 881 789 Notes payable 12,700 50,400 41,300 Gas inventory purchase obligations 6,477 13,039 5,133 Accounts payable 7,615 14,544 8,762 Other 15,504 10,153 10,118 Total current liabilities 58,375 94,169 71,249 Deferred Credits and Reserves: Deferred income taxes-funded 37,794 35,886 33,679 Deferred income taxes- unfunded 9,386 9,774 10,174 Accrued environmental expenses 900 1,183 2,116 Accrued transition costs 4,500 4,500 3,600 Other 8,333 8,798 9,907 Total deferred credits and reserves 60,913 60,141 59,476 Total Capitalization and Liabilities $343,720 $364,412 $326,344 (See accompanying notes to consolidated condensed financial statements) COLONIAL GAS COMPANY AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) Six Months Ended June 30, 1997 1996 (In Thousands) Cash Flows From Operating Activities: Net income $12,792 $13,023 Adjustments to reconcile net income to net cash 7,601 11,664 Changes in current assets and liabilities 24,176 16,512 Net cash provided by operating activities 44,569 41,199 Cash Flows From Investing Activities: Capital expenditures (13,443) (11,324) Change in deferred accounts (1,233) (1,052) Net cash used in investing activities (14,676) (12,376) Cash Flows From Financing Activities: Dividends paid on Common Stock (5,647) (5,415) Issuance of Common Stock 1,725 1,501 Issuance of long-term debt, net of issuance costs 14,925 9,777 Retirement of long-term debt (75) (6,069) Change in notes payable (37,700) (20,535) Change in gas inventory purchase obligations (6,562) (7,207) Net cash used in financing activities (33,334) (27,948) Net (decrease) increase in cash and cash equivalents (3,441) 875 Cash and cash equivalents at beginning of period 3,541 7,541 Cash and cash equivalents at end of period $ 100 $8,416 Supplemental Disclosures of Cash Flow Information: Cash paid during the period for: Interest - net of amount capitalized $4,645 $4,396 Income and franchise taxes $3,809 $ 649 (See accompanying notes to consolidated condensed financial statements) COLONIAL GAS COMPANY AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) Twelve Months Ended June 30, 1997 1996 (In Thousands) Cash Flows From Operating Activities: Net income $16,247 $17,621 Adjustments to reconcile net income to net cash 19,088 17,968 Changes in current assets and liabilities (3,625) (2,933) Net cash provided by operating activities 31,710 32,656 Cash Flows From Investing Activities: Capital expenditures (30,360) (25,922) Change in deferred accounts (4,406) (2,372) Net cash used in investing activities (34,766) (28,294) Cash Flows From Financing Activities: Dividends paid on Common Stock (11,152) (10,742) Issuance of Common Stock 3,502 2,734 Issuance of long-term debt, net of issuance costs 34,935 26,810 Retirement of long-term debt (5,289) (27,499) Change in notes payable (28,600) 8,800 Change in gas inventory purchase obligations 1,344 (3,318) Net cash provided by financing activities (5,260) (3,215) Net (decrease) increase in cash and cash equivalents (8,316) 1,147 Cash and cash equivalents at beginning of period 8,416 7,269 Cash and cash equivalents at end of period $ 100 $8,416 Supplemental Disclosures of Cash Flow Information: Cash paid during the period for: Interest - net of amount capitalized $9,398 $9,231 Income and franchise taxes $7,867 $ 690 (See accompanying notes to consolidated condensed financial statements) COLONIAL GAS COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED) 1. In the opinion of the Company, the accompanying unaudited consolidated condensed financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position as of June 30, 1997 and 1996 and results of operations for the three, six and twelve month periods ended June 30, 1997 and 1996 and cash flows for the six and twelve month periods ended June 30, 1997 and 1996. 2. Due to the significant impact of gas used for space heating during the heating season (November-April) and the Company's seasonal rate structure, the results of operations for the three month and six month periods ending June 30, 1997 and 1996 are not necessarily indicative of the results to be expected for the full year. 3. During the six months ended June 30, 1997, the Company issued 84,000 shares of Common Stock, $3.33 par value, under a Dividend Reinvestment and Common Stock Purchase Plan and under an Employee Savings Plan. As a result, Common Stock, $3.33 par value, increased $277,000 and Premium on Common Stock increased $1,448,000. 4. Contingencies Reference is made to Note I/Contingencies of the Notes to Consolidated Financial Statements contained within the Company's 1996 Annual Report to Stockholders. 5. Reclassifications are made periodically to previously issued financial statements to conform to the current year presentation. Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition Results of Operations Three Months Ended June 30, 1997 and June 30, 1996 The Company's net loss for the three months ended June 30, 1997 was $2,501,000, which is 13% or $296,000 more than the $2,205,000 loss reported for the same period last year. Although utility operations showed improvement, the increase in net loss resulted from a $597,000 decrease in net income for Transgas Inc., Colonial's energy trucking subsidiary. The Company typically incurs losses for the second and third quarters while reporting profits for the first and fourth quarters. This is due to significantly higher natural gas sales throughout the colder months to meet customers' heating needs. Approximately 90% of the Company's residential customers are heating accounts. The Company's operating margin increased 5.4% or $557,000 during the second quarter due to a 6.4% increase in firm gas sales. Firm gas sold for the three months ended June 30 rose to 3,317 MMcf in 1997 from 3,117 MMcf in 1996. Total operating expenses increased by 1.8% or $226,000 mainly due to a $208,000 increase in depreciation and amortization expense. Other operating income decreased $584,000 primarily due to a $597,000 decrease in the net income of Transgas. Second quarter financial results of Transgas were driven by warmer than normal weather in the fourth quarter of 1996 and the first quarter of 1997. As a result, Transgas had a significant decrease in the demand for the truck transportation of liquefied natural gas (LNG). Transgas hauls of LNG decreased 86% for the second quarter of 1997 compared to the same period last year. Six Months Ended June 30, 1997 and 1996 Net income for the six months ended June 30, 1997 was $12,792,000 compared to $13,023,000 for the same period in 1996. This $231,000 or 1.8% decrease resulted primarily from a $1,432,000 decrease in net income for Transgas offset by a $876,000 increase in utility operating income. Total operating expenses decreased by 3.9% or $1,072,000. Operations and maintenance expenses decreased by $1,294,000 or 7.9%, primarily due to the expiration of certain deferred charges and lower insurance expense. Income taxes increased $876,000 or 6% due to a higher level of pre-tax income. Other operating income decreased $1,425,000 primarily due to a $1,432,000 decrease in net income for Transgas. Hauls of LNG decreased 78% for the reasons described above. Twelve Months Ended June 30, 1997 and 1996 Net income for the twelve month period ended June 30, 1997 was $16,247,000, or $1.91 per share. This was an 8% decrease over the $17,621,000 net income, or $2.11 per share, reported for the same period in 1996. The decrease in net income for the twelve month period ended June 30, 1997 resulted primarily from lower net income for Transgas due to warmer weather. The 1.8% or $1,584,000 decrease in the Company's operating margin was due to weather that was 4.6% warmer than the preceding twelve months. Total operating expenses decreased by 2.2% or $1,136,000. Operations expenses decreased by $1,922,000 or 6% due to lower bad debts, expiration of the amortization of certain deferred charges and lower insurance and legal expenses. Offsetting these decreases was an increase of $675,000 in depreciation and amortization expense. Other operating income decreased $1,291,000 due to a $1,357,000 decrease in net income for Transgas. The warmer winter of 1996-1997 reduced the demand for energy trucking services. PART II - OTHER INFORMATION Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K a. Exhibits None b. Reports on Form 8-K On July 22, 1997, the Company filed a Form 8-K which reported that the Massachusetts Department of Public Utilities (DPU) had not approved a contract relating to the Company's proposed joint venture with Cabot LNG Corporation. The proposed joint venture was contingent upon that DPU approval, and would have involved long- term joint utilization of the Company's Tewksbury, Massachusetts LNG facility and Cabot LNG Corporation's purchase of a 50% interest in the Company's wholly- owned LNG trucking subsidiary, Transgas Inc. The Company and Cabot LNG Corporation are discussing alternative arrangements in which they can work together to provide additional LNG trucking, storage and related services to the energy market in the Northeast United States. SIGNATURES 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. COLONIAL GAS COMPANY (Registrant) Date: August 13, 1997 s/F.L.Putnam, III F.L. Putnam, III President and Chief Executive Officer Date: August 13, 1997 s/Nickolas Stavropoulos Nickolas Stavropoulos Executive Vice President - Finance, Marketing and Chief Financial Officer [END OF FORM 10-Q FOR PERIOD ENDING JUNE 30, 1997] EX-27 2
UT 1,000 3-MOS DEC-31-1997 JUN-30-1997 PER-BOOK 257,125 9,265 39,208 26,425 11,697 343,720 28,643 55,669 38,464 122,776 0 0 100,185 19,177 0 0 15,158 0 1,471 921 84,032 343,720 110,536 8,002 76,602 94,136 16,400 229 16,629 3,837 12,792 0 12,792 5,647 3,911 20,393 1.50 1.50
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