-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, P6/dVT1TjsgqbUZDIWHbEL0cveNLdYO5Zg3Amqyo6woiUuu9CmnrOe4l8FAsjibf MlJDZ+tlgfTk0zpZOch0Ww== 0000060653-95-000008.txt : 19950807 0000060653-95-000008.hdr.sgml : 19950807 ACCESSION NUMBER: 0000060653-95-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950804 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: 95559034 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 x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 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 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) 458-3171 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 August 1, 1995 was 8,306,857. COLONIAL GAS COMPANY INDEX PART I - FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Condensed Statements of Income - Three Months Ended June 30, 1995 and 1994 Six Months Ended June 30, 1995 and 1994 Twelve Months Ended June 30, 1995 and 1994 Consolidated Condensed Balance Sheets - June 30, 1995, December 31, 1994 and June 30, 1994 Consolidated Condensed Statements of Cash Flows - Six Months Ended June 30, 1995 and 1994 Twelve Months Ended June 30, 1995 and 1994 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 5. 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, 1995 1994 (In Thousands Except Per Share Amounts) Operating Revenues $22,760 $19,073 Cost of gas sold 13,219 10,328 Operating Margin 9,541 8,745 Operating Expenses: Operations 7,448 8,149 Maintenance 1,021 1,245 Depreciation and Amortization 2,523 2,283 Taxes, other than income 1,396 1,380 Total Operating Expenses 12,388 13,057 Income Taxes (1,922) (2,463) Utility Operating Loss (925) (1,849) Other Operating Income (Loss): Truck transportation revenues 886 3,430 Truck transportation expenses, including income taxes and interest (1,066) (2,925) Truck transportation net income (loss) (180) 505 Other, net of income taxes (14) (45) Total Other Operating Income (Loss) (194) 460 Non-Operating Income, Net 145 155 Loss Before Interest and Debt Expense (974) (1,234) Interest and Debt Expense 2,309 2,104 Net Loss $(3,283) $(3,338) Average Common Shares Outstanding 8,279 8,104 Loss per Average Common Share $ (0.40) $ (0.41) Dividends Paid per Common Share $ .320 $ .315 (See accompanying notes to consolidated condensed financial statements) COLONIAL GAS COMPANY AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED) Six Months Ended June 30, 1995 1994 (In Thousands Except Per Share Amounts) Operating Revenues $93,113 $105,156 Cost of gas sold 48,080 56,537 Operating Margin 45,033 48,619 Operating Expenses: Operations 15,699 18,141 Maintenance 2,237 2,540 Depreciation and Amortization 5,045 4,567 Taxes, other than income 2,752 2,642 Total Operating Expenses 25,733 27,890 Income Taxes 5,758 6,821 Utility Operating Income 13,542 13,908 Other Operating Income (Loss): Truck transportation revenues 2,648 7,278 Truck transportation expenses, including income taxes and interest (2,705) (6,115) Truck transportation net income (loss) (57) 1,163 Other, net of income taxes (59) (91) Total Other Operating Income (Loss) (116) 1,072 Non-Operating Income, Net 291 177 Income Before Interest and Debt Expense 13,717 15,157 Interest and Debt Expense 4,551 4,096 Net Income $ 9,166 $ 11,061 Average Common Shares Outstanding 8,260 8,069 Income per Average Common Share $ 1.11 $ 1.37 Dividends Paid per Common Share $ 0.635 $ 0.625 (See accompanying notes to consolidated condensed financial statements) COLONIAL GAS COMPANY AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED) Twelve Months Ended June 30, 1995 1994 (In Thousands Except Per Share Amounts) Operating Revenues $154,216 $172,704 Cost of gas sold 79,000 92,752 Operating Margin 75,216 79,952 Operating Expenses: Operations 30,563 33,775 Maintenance 4,770 5,036 Depreciation and Amortization 9,713 8,093 Taxes, other than income 5,032 4,762 Restructuring charge 3,185 - Total Operating Expenses 53,263 51,666 Income Taxes 4,801 8,336 Utility Operating Income 17,152 19,950 Other Operating Income (Loss): Truck transportation revenues 7,436 12,388 Truck transportation expenses, including income taxes and interest (7,170) (10,491) Truck transportation net income 266 1,897 Other, net of income taxes (120) (188) Total Other Operating Income 146 1,709 Non-Operating Income, Net 679 856 Income Before Interest and Debt Expense 17,977 22,515 Interest and Debt Expense 8,863 8,231 Net Income $ 9,114 $ 14,284 Average Common Shares Outstanding 8,213 8,022 Income per Average Common Share $ 1.11 $ 1.78 Dividends Paid per Common Share $ 1.265 $ 1.245 (See accompanying notes to consolidated condensed financial statements) COLONIAL GAS COMPANY AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS ASSETS June 30, December 31, June 30, 1995 1994 1994 (Unaudited) (Unaudited) (In Thousands) Utility Property: At original cost $297,259 $287,158 $269,511 Accumulated depreciation (70,666) (65,473) (62,590) Net utility property 226,593 221,685 206,921 Non-Utility Property - Net 4,642 3,479 3,007 Net property 231,235 225,164 209,928 Capital Leases - Net 2,948 2,948 3,276 Current Assets: Cash and cash equivalents 7,269 9,026 8,487 Accounts receivable 11,456 13,846 12,346 Allowance for doubtful accounts (2,273) (1,670) (3,159) Accrued utility revenues 624 6,148 619 Unbilled gas costs - 12,178 4,159 Fuel and other inventories 13,485 16,496 13,877 Prepayments and other current assets 6,826 9,544 6,458 Total current assets 37,387 65,568 42,787 Deferred Charges and Other Assets: Unrecovered deferred income taxes 11,083 11,471 12,301 Unrecovered environmental expenses - incurred 3,982 4,577 4,028 Unrecovered environmental expenses - accrued 3,222 3,800 5,300 Unrecovered transition costs - accrued 4,700 4,700 2,000 Other 13,303 13,120 11,921 Total deferred charges and other assets 36,290 37,668 35,550 Total Assets $307,860 $331,348 $291,541 (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, 1995 1994 1994 (Unaudited) (Unaudited) (In Thousands) Capitalization: Common equity: Common Stock - par value $3.33 per share Authorized - 15,000 shares Issued and outstanding - 8,304, 8,227 and 8,118 shares $ 27,652 $ 27,397 $ 27,032 Premium on common stock 50,424 49,211 47,369 Retained earnings 26,490 22,567 27,763 Total Common equity 104,566 99,175 102,164 Long-term debt 75,035 77,923 82,364 Total capitalization 179,601 177,098 184,528 Capital Lease Obligations 2,236 2,237 2,538 Current Liabilities: Current maturities of long-term debt 7,954 8,449 3,318 Current capital lease obligations 711 712 738 Notes payable 32,500 49,500 18,000 Gas inventory purchase obligations 8,451 13,860 7,723 Accounts payable 6,481 9,635 8,453 Other 9,286 9,226 11,520 Total current liabilities 65,383 91,382 49,752 Deferred Credits and Reserves: Deferred income taxes-funded 30,745 29,373 24,726 Deferred income taxes-unfunded 11,083 11,471 12,301 Accrued environmental expenses 3,222 3,800 5,300 Accrued transition costs 4,700 4,700 2,000 Other 10,890 11,287 10,396 Total deferred credits and reserves 60,640 60,631 54,723 Total Capitalization and Liabilities $307,860 $331,348 $291,541 (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, 1995 1994 (In Thousands) Cash Flows From Operating Activities: Net income $ 9,166 $11,061 Adjustments to reconcile net income to net cash 5,876 8,160 Changes in current assets and liabilities 22,293 24,290 Net cash provided by operating activities 37,335 43,511 Cash Flows From Investing Activities: Capital expenditures (11,472) (9,091) Change in deferred accounts 1,947 (1,057) Net cash used in investing activities (9,525) (10,148) Cash Flows From Financing Activities: Dividends paid on Common Stock (5,244) (5,043) Issuance of Common Stock 1,468 1,863 Issuance of long-term debt - - Retirement of long-term debt (3,382) (5,068) Change in notes payable (17,000) (14,600) Change in gas inventory purchase obligations (5,409) (7,510) Net cash used in financing activities (29,567) (30,358) Net (decrease) increase in cash and cash equivalents (1,757) 3,005 Cash and cash equivalents at beginning of period 9,026 5,482 Cash and cash equivalents at end of period $ 7,269 $ 8,487 Supplemental Disclosures of Cash Flow Information: Cash paid during the period for: Interest - net of amount capitalized $ 5,033 $ 4,580 Income and franchise taxes $ 3,402 $ 4,287 (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, 1995 1994 (In Thousands) Cash Flows From Operating Activities: Net income $ 9,114 $14,284 Adjustments to reconcile net income to net cash 10,842 11,899 Changes in current assets and liabilities (792) 1,890 Net cash provided by operating activities 19,164 28,073 Cash Flows From Investing Activities: Capital expenditures (31,734) (25,566) Change in deferred accounts 5,529 179 Net cash used in investing activities (26,205) (25,387) Cash Flows From Financing Activities: Dividends paid on Common Stock (10,387) (9,987) Issuance of Common Stock 3,675 4,021 Issuance of long-term debt 741 - Retirement of long-term debt (3,434) (5,068) Change in notes payable 14,500 11,300 Change in gas inventory purchase obligations 728 734 Net cash provided by financing activities 5,823 1,000 Net (decrease) increase in cash and cash equivalents (1,218) 3,686 Cash and cash equivalents at beginning of period 8,487 4,801 Cash and cash equivalents at end of period $ 7,269 $ 8,487 Supplemental Disclosures of Cash Flow Information: Cash paid during the period for: Interest - net of amount capitalized $ 9,736 $ 9,064 Income and franchise taxes $ 7,074 $ 6,753 (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, 1995 and 1994 and results of operations for the three, six and twelve month periods ended June 30, 1995 and 1994 and cash flows for the six and twelve month periods ended June 30, 1995 and 1994. 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, 1995 and 1994 are not necessarily indicative of the results to be expected for the full year. 3. During the six months ended June 30, 1995, the Company issued 76,677 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 $255,000 and Premium on Common Stock increased $1,213,000. 4. Contingencies Reference is made to Note J/Contingencies of the Notes to Consolidated Financial Statements contained within the Company's 1994 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, 1995 and June 30, 1994 The Company's net loss for the three months ended June 30, 1995 was $3,283,000, which is 1.6% or $55,000 less than the $3,338,000 loss reported for the same period last year. The principal reasons for this change are described below. 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 9.1% or $796,000 during the second quarter due to higher firm gas sales resulting from weather which was 18% colder than the comparable period last year and 13% colder than normal. Total operating expenses decreased by 5.1% or $669,000 primarily due to a $925,000 or 10% decrease in operations and maintenance expenses primarily as a result of cost saving initiatives and lower bad debts due to lower gas revenues. Income taxes credit decreased $541,000 or 22% due to a decrease in operating loss. Other operating income declined $654,000 due to a $685,000 decrease in the net income of Transgas Inc., the Company's energy trucking subsidiary. Transgas' 1994 financial results were driven by extremely cold weather in the first quarter of 1994 which generated a significant increase in demand for the truck transportation of liquefied natural gas (LNG) and propane throughout the first three quarters of 1994. Transgas hauls of LNG and propane decreased 64% for the second quarter of 1995 compared to the same period last year. Six Months Ended June 30, 1995 and 1994 Net income for the six months ended June 30, 1995 was $9,166,000, compared to $11,061,000 for the comparable 1994 period. This $1,895,000 or 17% decline is due to warmer weather. The 7.4% or $3,586,000 decrease in the Company's operating margin during the period was due to lower firm gas sales resulting from weather which was 11.5% warmer than the comparable period last year and 1.1% warmer than normal. Total operating expenses decreased by 7.7% or $2,157,000. Operations and maintenance expenses decreased by $2,745,000 or 13% primarily as a result of cost saving initiatives and lower bad debts due to lower gas revenues. Depreciation and amortization expense increased $478,000, due to an increase in utility property. Income taxes decreased $1,063,000 or 16% due to a lower level of income subject to tax. Other operating income decreased $1,188,000 due to a $1,220,000 decrease in net income for Transgas. Hauls of LNG and propane decreased 59% for the reasons described above. Twelve Months Ended June 30, 1995 and 1994 Net income before a restructuring charge was $11,079,000 or $1.35 per share for the twelve months ended June 30, 1995 down from $14,284,000 or $1.78 per share for the comparable 1994 period, for a decrease of 24% per share. A restructuring charge recorded in December 1994 relating to a voluntary early retirement program and the closing of retail appliance sales operations amounted to $1,965,000 after-tax or $0.24 per share. After taking into account the restructuring charge, earnings for the twelve months ended June 30, 1995 were $1.11 per share or $0.67 per share less than the comparable 1994 period. The 5.9% or $4,736,000 reduction in the Company's operating margin during the period was due to weather that was 11.5% warmer than the comparable period last year and 3.2% warmer than normal. This warmer weather resulted in a 9% reduction in firm gas sales volumes. Total operating expenses increased by 3.1% or $1,597,000. This increase was due to the restructuring charge of $3,185,000 as described above and an increase in depreciation and amortization expense of $1,620,000 or 20% due to higher depreciation rates approved with the Company's November, 1993 rate increase and additions to utility property, partially offset by a $3,478,000 or 9% reduction in operations and maintenance expenses resulting from cost saving initiatives and lower bad debts due to lower gas revenues. Income taxes decreased $3,535,000 or 42% due to a lower level of income subject to tax. Other operating income decreased $1,563,000 due to a $1,631,000 decrease in net income for Transgas. The milder winter of 1995 adversely affected Transgas' performance as compared to the twelve-month period ended June 30, 1994, which included the strong 1994 first two quarters. Liquidity and Capital Resources On June 23, 1995, the Company applied for approval from the Massachusetts Department of Public Utilities for authority to issue and sell up to $75 million of first mortgage bonds pursuant to a medium term note (MTN) program. It is anticipated that these bonds will be issued in several series over the next two years. 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 None 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 4, 1995 F.L. Putnam, III President and Chief Executive Officer Date: August 4, 1995 Nickolas Stavropoulos Executive Vice President -Finance, Marketing and Chief Financial Officer [END OF FORM 10-Q FOR PERIOD ENDED JUNE 30, 1995] EX-27 2
UT 1,000 6-MOS DEC-31-1995 JUN-30-1995 PER-BOOK 226,593 7,590 37,387 22,987 13,303 307,860 27,652 50,424 26,490 104,566 0 0 75,035 40,951 0 0 7,954 0 2,236 711 76,407 307,860 93,113 5,758 73,813 79,571 13,542 175 13,717 4,551 9,166 0 9,166 5,244 3,880 15,042 1.11 1.11
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