-----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, VeFucRsFgZuvwFMdtN5SdgiVXjQ+3QX+0Lun03eF1lJdovzz1TauAo2K16MKVeQi c9AaazbJY/r9Vt1UthPKBw== 0000948830-96-000141.txt : 19960813 0000948830-96-000141.hdr.sgml : 19960813 ACCESSION NUMBER: 0000948830-96-000141 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960812 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: METEOR INDUSTRIES INC CENTRAL INDEX KEY: 0000912875 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-AUTO & HOME SUPPLY STORES [5531] IRS NUMBER: 841236619 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-27968 FILM NUMBER: 96608217 BUSINESS ADDRESS: STREET 1: 216 16TH ST STE 730 CITY: DENVER STATE: CO ZIP: 80202 MAIL ADDRESS: STREET 1: 216 16TH ST STREET 2: STE 730 CITY: DENVER STATE: CO ZIP: 80202 10-Q 1 UNITED STATES 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, 1996 Commission File Number: 0-27968 METEOR INDUSTRIES, INC. (Exact Name of Issuer as Specified in its Charter) COLORADO 84-1236619 (State or Other Jurisdiction of (I.R.S. Employer Identification Number) Incorporation or Organization) 216 SIXTEENTH STREET, SUITE 730 DENVER, COLORADO 80202 (Address of Principal Executive Offices) (303) 572-1137 (Registrant's Telephone Number, Including Area Code) Check whether the Issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the Issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No___ There were 3,294,903 shares of the Registrant's $.001 par value common stock outstanding as of June 30, 1996. METEOR INDUSTRIES, INC. CONSOLIDATED BALANCE SHEET ASSETS June 30, 1996 December 31, (Unaudited) 1995 CURRENT ASSETS Cash and cash equivalents $ 705,137 $ 95,150 Restricted Cash 317,338 541,964 Accounts receivable-trade, net of allowance 5,085,821 4,232,071 Notes receivable 180,953 156,962 Inventory 1,370,624 1,332,642 Deferred tax asset 140,614 149,824 Other current assets 134,354 151,103 Total current assets 7,934,841 6,659,716 Property, plant and equipment, net 8,816,211 8,568,392 Other assets Notes receivable, related party 2,236,023 2,202,210 Investments in closely held businesses 1,038,758 759,141 Other assets 745,696 661,737 Total other assets 4,020,477 3,623,088 TOTAL ASSETS $20,771,529 $18,851,196 The accompanying notes are an integral part of the financial statements. -2- METEOR INDUSTRIES, INC. CONSOLIDATED BALANCE SHEET (Continued) LIABILITIES AND SHAREHOLDERS' EQUITY June 30, 1996 December 31, (Unaudited) 1995 CURRENT LIABILITIES Accounts payable, trade $ 3,758,869 $ 2,870,045 Bank overdraft -- 71,657 Current portion, long-term debt 576,823 561,048 Accrued expenses 168,296 196,909 Taxes payable 887,207 898,102 Revolving credit facility 2,032,532 2,275,512 Total current liabilities 7,423,727 6,873,273 Long-term debt 2,504,485 2,194,773 Deferred tax liability 1,686,126 1,893,579 Minority interest in subsidiary 3,901,030 3,615,398 Total liabilities 15,515,368 14,577,023 SHAREHOLDERS' EQUITY Common stock, $.001 par value; authorized 10,000,000 shares, 3,294,903 shares issued and outstanding 3,295 3,025 Paid-in capital 3,331,688 2,640,063 Retained earnings 1,921,178 1,631,085 Total shareholders' equity 5,256,161 4,274,173 TOTAL LIABILITIES AND SHARE- HOLDERS' EQUITY $20,771,529 $18,851,196 The accompanying notes are an integral part of the financial statements. -3- METEOR INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS For the Three Months Ended June 30, 1996 and 1995 (UNAUDITED) Pro Forma June 30, June 30, June 30, 1996 1995 1995 Net sales $15,993,019 $ 268,856 $14,737,222 Cost of sales 13,430,437 -- 12,493,711 Gross profit 2,562,582 268,856 2,243,511 Selling, general and adminis- trative expenses 2,037,756 224,606 2,278,795 Depreciation 212,489 15,000 172,189 Total expenses 2,250,245 239,606 2,450,984 Income (loss) from operations 312,337 29,250 (207,473) Other income and (expenses) Interest income 132,213 -- 73,962 Interest expense (122,253) -- (138,277) Gain (loss) on sale of assets -- -- 138,702 Total other income 9,960 -- 74,387 Income (loss) before income taxes and minority interest 322,297 29,250 (133,086) Provision for income taxes 110,176 -- (45,453) Income (loss) from continuing oper- ations before minority interest 212,121 29,250 (87,633) Minority interest 95,316 -- 95,316 Income (loss) from continuing operations 116,805 29,250 (182,949) Discontinued operations: Income from discontinued operations -- 154,315 -- Net income (loss) $ 116,805 $ 183,565 $ (182,949) Income (loss) per common share from continuing operations $ .04 $ .01 $ (.10) Net income per common share $ .04 $ .10 $ (.10) The accompanying notes are an integral part of the financial statements. -4- METEOR INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS For the Six Months Ended June 30, 1996 and 1995 (UNAUDITED) Pro Forma June 30, June 30, June 30, 1996 1995 1995 Net sales $29,378,558 $433,889 $29,016,060 Cost of sales 24,260,360 -- 24,152,214 Gross profit 5,118,198 433,889 4,863,846 Selling, general and adminis- trative expenses 3,998,806 481,763 4,815,685 Depreciation 433,578 15,000 320,101 Total expenses 4,432,384 496,763 5,135,786 Income (loss) from operations 685,814 (62,874) (271,940) Other income and (expenses) Interest income 186,914 -- 144,271 Interest expense (249,953) -- (282,604) Gain (loss) on sale of assets 31,105 -- 276,095 Total other income (31,934) -- 137,762 Income (loss) before income taxes and minority interest 653,880 (62,874) (134,178) Provision for income taxes 173,155 -- (47,920) Income (loss) from continuing oper- ations before minority interest 480,725 (62,874) (86,258) Minority interest 190,632 -- 190,632 Income (loss) from continuing operations 290,093 (62,874) (276,890) Discontinued operations: Income from discontinued operations -- 232,986 -- Net income (loss) $ 290,093 $170,112 $ (276,890) Income (loss) per common share from continuing operations $ .09 $ (.03) $ (.15) Net income per common share $ .09 $ .09 $ (.15) The accompanying notes are an integral part of the financial statements. -5- METEOR INDUSTRIES, INC. CONSOLIDATED STATEMENT OF CASH FLOWS For the Six Months Ended June 30, 1996 and 1995 (UNAUDITED) June 30, June 30, 1996 1995 Cash flows from operating activities Net income (loss) $ 290,093 $ 170,112 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 433,578 15,000 Gain (loss) on disposal of property & equipment (31,105) -- Deferred income taxes (198,243) -- Minority interest 190,632 -- Changes in assets and liabilities, net of effects from reverse acquisition (Increase) decrease in accounts receivable (853,750) (20,664) (Increase) in inventories (37,982) -- (Increase) decrease in other current assets 16,749 776 Increase in accounts payable 888,818 55,269 Increase (decrease) in accrued liabilities (28,613) -- Increase (decrease) in taxes payable (10,895) -- (Increase) in other assets (83,959) -- Discontinued operations -- (232,986) Net cash provided by operating activities 575,323 (12,493) Cash flows from investing activities Purchases of property, equipment and investment (834,909) (2,666) Net cash used by investing activities (834,909) (2,666) Cash flows from financing activities Payments on revolving credit facilities (242,980) -- Decrease in bank overdraft (71,657) -- Note receivable payments (57,804) -- Payments on long-term debt (197,768) -- Borrowings 523,255 -- Restricted cash 224,626 -- Sale of Stock 691,901 -- Net cash provided by financing activities 869,573 -- Net increase in cash and equivalents 609,987 (15,159) Cash and equivalents, beginning of period 95,150 1,277 Cash and equivalents, end of period $ 705,137 $(13,882) The accompanying notes are an integral part of the financial statements. -6- METEOR INDUSTRIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 1996 NOTE 1 -- BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Meteor Industries, Inc. ("Meteor" or "Company") was incorporated on December 22, 1992, as a Colorado based holding company. Graves Oil & Butane Co., Inc. ("Graves"), which was acquired effective September 1, 1993, is a distributor of petroleum products primarily in northern New Mexico, Colorado, Arizona and Utah. Graves also operates gasoline and convenience stores in northern New Mexico and Colorado. El Boracho, Inc., which was acquired September 1, 1993, holds a liquor license for use by an Albuquerque, New Mexico convenience store. Hillger Oil Company ("Hillger"), which was acquired effective April 1, 1995, is a distributor of petroleum products primarily in southern New Mexico. In addition, Hillger operates gasoline and convenience stores in southern New Mexico. Capco Resources, Inc. ("CRI"), is a holding Company which owns an equity in Saba Power Company Ltd. ("Saba Power") which is involved in developing a power project in Pakistan, and Capco Analytical Services, Inc. ("CAS") which is involved in providing environmental consulting and laboratory analysis in California, both were acquired in November 1995. The acquisition of CRI was accounted for as a reverse acquisition with CRI treated as the acquirer. The historical accounts of CRI are reflected in the financial statements for the previous year. The consolidated financial statements include the accounts of Meteor Industries, Inc., and its wholly owned subsidiaries, Graves, (including its wholly owned subsidiary, El Boracho, Inc.) Hillger, CRI and CAS. All significant intercompany transactions and balances have been eliminated in consolidation. The pro forma consolidated statements of operation for the three and six months ended June 30, 1995, combines the consolidated operations of Meteor, the operations of Hillger and the operations of CRI and CAS. These financial statements have been prepared in accordance with generally accepted principles for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, such interim statements reflect all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position and the results of operations and cash flows for the interim periods presented. The results of operations for these interim periods are not necessarily indicative of the results to be expected for the full year. These financial statements should be read in conjunction with the audited consolidated financial statements and footnotes for the year ended December 31, 1995, filed with the Company's Form 10. Earnings per common and common equivalent share are computed by dividing the net income by the weighted average number of common shares. The number of shares used in the earnings per share computation for the three months ended June 30, 1996, is 3,114,903; for the six months ended June 30, 1996, is 3,069,903; and for the three and six months and the pro forma periods ended June 30, 1995 is 1,745,000. The number of shares reflects Meteor's share activity during 1996 and CRI's equivalent share activity during 1995. -7- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR METEOR INDUSTRIES, INC. LIQUIDITY AND CAPITAL RESOURCES Effective November 2, 1995, Meteor acquired CRI. The acquisition was treated as a reverse acquisition of Meteor by CRI. Accordingly, the historical accounts of CRI are reflected in the financial statements, so comparisons with prior year are not very meaningful. Net cash provided by operating activities totaled $575,000 for the six months ended June 30, 1996 compared to a use of funds of $12,000 for the six months ended June 30, 1995. The increase in cash provided is primarily related to increases in net income and accounts payable. As of June 30, 1996, the Company had working capital of $511,000 compared to a working capital deficit of $214,000 at December 31, 1995. The increase in the working capital is due primarily to sale of stock of yielding net proceeds of $692,000. Net cash used by investing activities totaled $835,000 for the six months ended June 30, 1996, compared to a use of $3,000 for the six months ended June 30, 1995. The increase is for property, equipment purchases and investments in 1996. Because of the Company's continued expansion and development efforts, the Company's liquidity requirements have increased and are expected to continue to increase as a result of the need to reduce the Company's existing debt related to prior acquisitions. Net cash provided by financing activities totaled $870,000 for the six months ended June 30, 1996 compared to a use of $0 for the six months ended June 30, 1995. The provision is primarily related to sale of stock and borrowings related to property purchases. The Company has two revolving bank credit facilities with Norwest Business Credit, Inc. - one for $3,000,000 and one for $1,500,000. The credit lines are subject to the borrowing base of the Company's subsidiaries, as defined and on June 30, 1996, $1,901,000 and $132,000 were borrowed against the facilities. The Company has been in default on timely filing of information with the lender. Rather than change the due dates of various reports, the lender has given written waivers of this requirement in the past and has indicated they will probably continue to waive it in the future whenever the Company might be late in filing such information. The Company has filed such information in a timely manner during the past several months, but because of very short time requirements the Company may not be able to file timely in the future. The Company has a term loan with a New Mexico bank which is due in January, 1998 and a term loan with Norwest Business Credit, Inc which is due in June, 1998. The balances at June 30, 1996, were $312,000 and $291,000, respectively. The loans are collateralized by real estate and buildings and equipment and require approximately $29,000 per month in payments. The Company owns 50% of a limited liability company which in June, 1996, acquired a convenience store for $610,000 using financing from Phillips 66 for $523,000. The Company is a co-signer on this loan which has a term of 10 years. -8- A subsidiary of the Company has preferred stock outstanding which requires no periodic payments but accrues an 8% dividend and must be redeemed for $3,543,500 plus accrued dividends at the holders request any time after September 15, 2000 unless earlier converted into common stock pursuant to its terms. This preferred stock is treated as a minority interest on the balance sheet and recorded at its discounted value. The Company owes the founder of one of its subsidiaries $1,868,000 payable in semi-annual installments of $200,000 which includes principal and interest calculated at 2 percentage points in excess of Citibank's prime rate. All previously unpaid principal and interest is due October 1, 1997. It is anticipated that $435,000 will be offset by payments on notes receivable from the founder also due October 1, 1997. The Company is obligated to pay lease costs of approximately $61,000 monthly for land, building, facilities, and equipment. In order to pay its obligations, the interest on such obligations and other expenses, the Company must generate cash flows from operations which exceeds that which has been achieved in the past. In addition, even if historical cash flow is exceeded throughout the terms of its obligations, the Company will probably be required to raise capital or refinance its existing debt in order to pay its obligations as they become due. In June 1996, the Company reaffirmed a Letter of Intent with an underwriter concerning a proposed second public offering of the Company's Common Stock. Under the terms of the Letter of Intent, the proposed offering would be for at least $2 million on a "firm commitment" basis. Such offering is expected to occur during the third quarter of 1996, subject to a number of contingencies including a registration statement to be filed with the Securities and Exchange Commission becoming effective. The Company utilizes underground tanks at various locations to store petroleum products and is therefore subject to various federal and state statutes concerning environmental protection, as well as the New Mexico Ground Water Protection Act. The various federal and state statutes are designed to identify environmental damage, identify hazardous material and/or operations, regulate operations engaged in hazardous activities, and establish procedures for remedial action as necessary. The state of New Mexico has recognized the potential cleanup costs result- ing from regulations, and the New Mexico Ground Water Protection Act has in- cluded the establishment of a corrective action fund. The purpose of the fund is to provide monetary assistance in both assessing site damage and correcting the damage where such costs are in excess of $10,000. Assistance is not available to repair or replace underground tanks or equipment. The law specifies requirements which must have been met for an applicant to be eligible, including a provision that payments will be made in accordance with regulations (which have not yet been issued), and states that payment from the corrective action fund are limited to amounts in that fund. The Company is responsible for any contamination of land it owns or leases; however, the Company's responsibilities may be limited as a result of possible claims for reimbursement from third parties. The Company maintains detailed inventory records and performs tank and line tightness tests on a regular basis on all underground storage tanks. Management has assessed the environmental contingencies and does not anticipate any potential liabilities that will have a material adverse effect on the consolidated financial position, results of operation, or liquidating of the Company. -9- The Pakistan power project will not provide any significant cash flow to the Company for approximately three to four years. In August 1996, CRI negotiated an amendment to the Project Development and Shareholder's Agreement. This agreement allows CRI to make approximately a $1,700,000 equity investment in the Pakistan power project in exchange for approximately an 8% interest in Saba Power. In addition, CRI will have an option (the "Project Option") to increase its interest in Saba Power by an additional 9.93% for 750 days. If the Company chooses to fully exercise such Project Option, it will have to invest approximately $4,400,000 plus "interest" accruing at 14% per annum during the period in which the Project Option remains unexercised. CRI can take advantage of this Project Option to a lesser degree by making a proportionately smaller equity investment. In August 1996, CRI entered into an agreement with Saba Petroleum Company ("Saba") whereby Saba, a related party, is participating with CRI in the Pakistan power project. Saba has agreed to invest $500,000 for a 2.3% interest in Saba Power. Saba has no interest in the Project Option. As a result of the above described agreements CRI will invest approximately $1,200,000 for a 5.7% interest in Saba Power and CRI has retained its Project Option to increase its interest up to approximately 15.6%. As of June 30, 1996, CRI had invested approximately $302,000. Meteor will provide CRI the necessary funds for the remainder of the Saba Power equity commitment from the proceeds of a private placement of Meteor's Common Stock completed in June 1996 and expects the partial collection ($500,000) on its note receivable from Saba Petroleum Company. CRI has a commitment outstanding for $75,000 as a finders fee to an unaffiliated party due upon completion of the project of which one half is to be reimbursed by one of the other shareholders of Saba Power. On July 14, 1996, the Government of Pakistan gave notice to Saba Power that Saba Power was in default of certain provisions in the Implementation Agreement which required construction of the power project to start by July 3, 1996. The Implementation Agreement and the notice states that Saba Power has 90 days from the date of the notice to cure such default. In early August 1996, Saba Power and the shareholders thereof completed the final negotiations with the project's construction lender. When certain consents are obtained from the Government of Pakistan, which consents relate to the construction loan documents, construction activities will commence and the default would then be cured. It is anticipated that such consents will be obtained and construction will begin by the end of August 1996, well before the end of the 90 day period provided in the notice of default. RESULTS OF OPERATIONS COMPARISON OF THE THREE MONTHS ENDED JUNE 30, 1996 TO JUNE 30, 1995 The Company is primarily engaged in the business of marketing and distributing refined petroleum and related products employing wholesale, convenience store operations and environmental services. The following table sets forth, for the three month period ended June 30, 1996 and 1995 certain items of the Company's Consolidated Statements of Operations. -10- Percentage of Sales 1996 1995 1995 (Pro Forma) Net Sales 100.0% 100.0% 100.0% Cost of Sales 84.0% --% 84.7% Gross Profit 16.0% 100.0% 15.3% Selling, General & Administrative Expenses 12.7% 83.5% 15.5% Depreciation Expense 1.3% 5.6% 1.2% Other Income and Expenses --% --% .5% Income Taxes (Benefit) .7% --% (.3)% Minority Interest .6% --% .6% Net Income (loss) from continuing operations .7% 10.9% (1.2)% _______________ The pro forma operations for the quarter ended June 30, 1995 combines the operations of Meteor for the quarter ended May 31, 1995, the operations of Hillger for the month ended March 31, 1995, and the operations of CRI and CAS for the three months ended June 30, 1995. The Company's sales for the three months ended June 30, 1996, were $15,993,000 compared to $269,000 for the comparable period ending June 30, 1995 and $14,737,000 on a pro forma basis. The increase in revenue on a pro forma basis is due to an increase in sales at Graves of $651,000, an increase at Hillger of $436,000, an increase of $58,000 at CAS and an increase at Meteor of $111,000. The increase in revenues is due to increases in volumes and prices. Sales are expected to be relatively constant throughout the remainder of the year. The Company's cost of sales for the three months ended June 30, 1996, were $13,430,000 compared to $0 for the comparable period ended June 30, 1995, and $12,494,000 on a pro forma basis. The increase in costs of sales on a pro forma basis is due to an increase in sales as discussed above. The Company's gross profit for the three months ended June 30, 1996, was $2,563,000 compared to $269,000 for the comparable period ended June 30, 1995 and $2,243,000 on a pro forma basis. The increase is primarily related to higher sales and increased margins for gasoline at the retail level. Retail gasoline margins are dictated by competition in a given area and the Company has no control over such margins. The Company's selling, general and administrative expenses were $2,038,000 for the three months ended June 30, 1996, compared to $225,000 for the three months ended June 30, 1995 and $2,279,000 on a pro forma basis. The reduction in expenses on a pro forma basis is related to combining the operations of Hillger and Graves and realizing the benefits of overhead reduction and reduction of certain operating costs. The Company's depreciation for the three months ended June 30, 1996, was $212,000 compared to $15,000 for the comparable period ended June 30, 1995 and $172,000 on a pro forma basis. The increase in depreciation expense is due primarily to the step up in basis of property due to the reverse acquisition. The Company's other income for the three months ended June 30, 1996 was $10,000 compared to $0 for the comparable period ended June 30, 1995 and $74,000 on a pro forma basis. The reasons for the decrease on a pro forma basis are primarily -11- related to an increase in interest income of $58,000 related to the notes receivable, a reduction in interest expense of $16,000 due to a reduction in long term debt, and a decrease of $138,000 due to no sales of assets this quarter. The Company's income from continuing operations for the three months ended June 30, 1996 was $117,000 compared to income from continuing operations of $29,000 in the prior year and a loss of $183,000 on a pro forma basis. COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 1996 TO JUNE 30, 1995 The Company is primarily engaged in the business of marketing and distributing refined petroleum and related products employing wholesale, convenience store operations and environmental services. The following table sets forth, for the six month period ended June 30, 1996 and 1995 certain items of the Company's Consolidated Statements of Operations. Percentage of Sales 1996 1995 1995 (Pro Forma) Net Sales 100.0% 100.0% 100.0% Cost of Sales 82.6% --% 83.2% Gross Profit 17.4% 100.0% 16.8% Selling, General & Administrative Expenses 13.6% 111.0% 16.6% Depreciation Expense 1.5% 3.5% 1.1% Other Income and Expenses (.1)% --% .5% Income Taxes (Benefit) .6% --% (.2)% Minority Interest .6% --% .7% Net Income (loss) from continuing operations 1.0% (14.5)% (.9)% _______________ The pro forma operations for the six months ended June 30, 1995 combines the operations of Meteor for the six months ended May 31, 1995, the operations of Hillger for the three months ended March 31, 1995, and the operations of CRI and CAS for the six months ended June 30, 1995. The Company's sales for the six months ended June 30, 1996, were $29,379,000 compared to $434,000 for the comparable period ending June 30, 1995 and $29,016,000 on a pro forma basis. The increase in revenue on a pro forma basis is due to an increase in sales at Graves of $69,000, an increase at Hillger of $71,000, an increase of $112,000 at CAS and an increase at Meteor of $111,000. The increase in revenues is due to increases in volumes and prices. Sales are expected to be relatively constant throughout the remainder of the year. The Company's cost of sales for the six months ended June 30, 1996, were $24,260,000 compared to $0 for the comparable period ended June 30, 1995, and $24,152,000 on a pro forma basis. The increase in costs of sales on a pro forma basis is due to an increase in sales as discussed above. The Company's gross profit for the six months ended June 30, 1996, was $5,118,000 compared to $434,000 for the comparable period ended June 30, 1995 and $4,864,000 on a pro forma basis. The increase is primarily related to higher sales and -12- increased margins for gasoline at the retail level. Retail gasoline margins are dictated by competition in a given area and the Company has no control over such margins. The Company's selling, general and administrative expenses were $3,999,000 for the six months ended June 30, 1996, compared to $482,000 for the comparable period ended June 30, 1995 and $4,816,000 on a pro forma basis. The reduction in expenses on a pro forma basis is related to combining the operations of Hillger and Graves and realizing the benefits of overhead reduction and reduction of certain operating costs. The Company's depreciation for the six months ended June 30, 1996, was $434,000 compared to $15,000 for the comparable period ended June 30, 1995 and $320,000 on a pro forma basis. The increase in depreciation expense is due primarily to the step up in basis of property due to the reverse acquisition. The Company's other income for the six months ended June 30, 1996 was $(32,000) compared to $0 for the comparable period ended June 30, 1995 and $138,000 on a pro forma basis. The reasons for the decrease on a pro forma basis are primarily related to an increase in interest income of $43,000 related to the notes receivable, a reduction in interest expense of $32,000 due to a reduction in long term debt, and a decrease of $245,000 due to fewer sales of assets this quarter. The Company's provision for income taxes for the six months ended June 30, 1996, was $173,000 compared to $0 for the comparable period ended June 30, 1995, and $(48,000) on a pro forma basis. The reasons for the increase is due to income from continuing operation this period compared to a loss for the comparable period last year. The Company's income from continuing operations for the six months ended June 30, 1996 was $290,000 compared to a loss from continuing operations of $63,000 in the prior year and a loss of $277,000 on a pro forma basis. PART II - OTHER INFORMATION Item 1. Legal Proceedings. None. Item 2. Changes in Securities. None. Item 3. Defaults Upon Senior Securities. None. Item 4. Submission of Matters to a Vote of Security Holders. None. Item 5. Other Information. None. Item 6. Exhibits and Reports on Form 8-K. None. -13- SIGNATURES In accordance with the requirements of the Exchange Act, the Issuer caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. METEOR INDUSTRIES, INC. By /s/ Edward J. Names Edward J. Names, President Dated: August 12, 1996 By /s/ Dennis R. Staal Dennis R. Staal, Treasurer(Chief Financial and Accounting Officer) Dated: August 12, 1996 -14- EXHIBIT INDEX EXHIBIT METHOD OF FILING - ------- ----------------------------- 27. FINANCIAL DATA SCHEDULE Filed herewith electronically EX-27 2
5 This schedule contains summary financial information extracted from the consolidated balance sheets and consolidated statements of operations found on pages 3, 4 and 5 of the Company's Form 10-Q for the year to date, and is qualified in its entirety by reference to such financial statements. 6-MOS DEC-31-1995 JUN-30-1996 1,022,475 0 5,266,774 0 1,370,624 7,934,841 8,816,211 0 20,771,529 7,423,727 0 3,295 0 0 5,252,866 20,771,529 29,378,558 29,378,558 24,260,360 24,260,360 4,432,384 0 249,953 463,248 173,155 290,093 0 0 0 290,093 .09 .09
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