-----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, N7SgERHvRvWzAN50kPs5XN706JbRFjnGZPfgEOrvESAIu02IP5XD0F2kHKLcgO/y CX05D0A26JDiCpUBDJtfig== 0000948830-00-000220.txt : 20000516 0000948830-00-000220.hdr.sgml : 20000516 ACCESSION NUMBER: 0000948830-00-000220 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000515 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: SEC FILE NUMBER: 001-12401 FILM NUMBER: 634354 BUSINESS ADDRESS: STREET 1: 216 16TH ST STE 730 CITY: DENVER STATE: CO ZIP: 80202 BUSINESS PHONE: 3035721135 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 [FEE REQUIRED] For the Quarterly Period ended March 31, 2000 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) 1401 BLAKE STREET, SUITE 200, DENVER, COLORADO 80202 -------------------------------------------------------- (Address of Principal Executive Offices) (303)572-1135 ---------------------------------------------------- (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 registrant 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 3,524,169 shares of the Registrant's $.001 par value common stock outstanding as of May 12, 2000. Item 1: FINANCIAL STATEMENTS METEOR INDUSTRIES, INC. CONSOLIDATED BALANCE SHEETS ASSETS (Dollars in Thousands) March 31, December 31, 2000 1999 (Unaudited) CURRENT ASSETS Cash $ 438 $ 288 Restricted cash 1,395 600 Accounts receivable-trade, net of allowance of $301 and $233, respectively 15,375 14,835 Accounts receivable, related party 277 678 Notes receivable, net of allowance of $114 And $114, respectively 235 290 Notes receivable, related party 1,459 1,153 Inventory 3,655 3,596 Deferred tax asset 335 335 Other current assets 370 535 Total current assets 23,539 22,310 Property, plant and equipment, net 17,710 17,905 Other assets Notes receivable 177 123 Notes receivable, related party 1,311 1,277 Investments in closely held businesses 1,495 1,581 Intangibles, net 1,383 1,409 Other assets 416 390 Total other assets 4,782 4,780 TOTAL ASSETS $46,031 $44,995 Continued on next page 2 METEOR INDUSTRIES, INC. CONSOLIDATED BALANCE SHEETS (Continued) LIABILITIES AND SHAREHOLDERS' EQUITY (Dollars in Thousands) March 31, December 31, 2000 1999 (Unaudited) CURRENT LIABILITIES Accounts payable, trade $ 9,147 $ 8,323 Accounts payable, related party 14 14 Book overdraft 2,125 1,924 Current portion, long-term debt 1,428 1,438 Accrued expenses 670 755 Fuel taxes payable 906 909 Revolving credit facility 9,295 9,292 Total current liabilities 23,585 22,655 Long-term debt 5,839 5,865 Deferred tax liability 2,606 2,606 Minority interest in subsidiaries 5,535 5,412 Total liabilities 37,565 36,538 Commitments and contingencies (Note 4) SHAREHOLDERS' EQUITY Common stock, $.001 par value; authorized 10,000,000 shares, 3,656,267 and 3,656,267 shares issued, respectively 4 4 Paid-in capital 4,458 4,458 Treasury stock, at cost, 132,098 shares held (489) (489) Retained earnings 4,493 4,484 Total shareholders' equity 8,466 8,457 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $46,031 $44,995 The accompanying notes are an integral part of the financial statements. 3 METEOR INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999 (UNAUDITED) (Dollars in Thousands except per share information) March 31, March 31, 2000 1999 Net sales $42,017 $27,150 Cost of sales 36,379 21,707 Gross profit 5,638 5,443 Selling, general and administrative expenses 4,547 4,194 Depreciation and amortization 599 480 Total expenses 5,146 4,674 Income from operations 492 769 Other income and (expenses) Interest income 100 38 Interest expense (362) (311) Other 5 140 (Loss)gain on sale of assets (3) 3 Total other expenses (260) (130) Income before income taxes and minority interest 232 639 Income tax expense 100 235 Minority interest 123 123 Net income $ 9 $ 281 Earnings per share: Basic $ .00 $ .08 Diluted $ .00 $ .08 Weighted average common share and common share equivalents: Basic 3,524,169 3,423,694 Diluted 3,528,734 3,428,361 The accompanying notes are an integral part of the financial statements. 4 METEOR INDUSTRIES, INC. CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY FOR THE THREE MONTHS ENDED MARCH 31, 2000 (UNAUDITED) (Dollars in Thousands) Additional Common Stock Paid-In Retained Treasury Shares Amount Capital Earnings Stock Total Balance - December 31, 1999 3,656,267 $ 4 $4,458 $4,484 $ (489) $8,457 Net income 9 9 Balance - March 31, 2000 3,656,267 $ 4 $4,458 $4,493 $ (489) $8,466 The accompanying notes are an integral part of the financial statements. 5 METEOR INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999 (UNAUDITED) (Dollars in Thousands) March 31, March 31, 2000 1999 Cash flows from operating activities: Net income $ 9 $ 281 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 599 480 Loss (gain) on disposal of assets 3 (3) Minority interest 123 123 Change in assets and liabilities: Decrease (increase) in: Accounts receivable, net (479) (839) Inventories (59) 28 Other current assets 165 171 Other assets (26) 54 Increase (decrease) in: Accounts payable 824 1,958 Accrued liabilities (85) (196) Taxes payable (3) (45) Net cash provided by operating activities 1,071 2,012 Cash flows from investing activities: Cash proceeds from sale of property, plant and equipment 111 27 Purchases of property, plant and equipment (454) (582) Investment in closely held business 48 (6) Note receivable payments (loans), net 1 29 Net cash used in investing activities (294) (532) Continued on next page 6 METEOR INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999 (UNAUDITED) (Dollars in Thousands) (Continued) March 31, March 31, 2000 1999 Cash flows from financing activities: Borrowings (payments) on revolving credit facilities, net $ 3 $ ( 256) Book overdraft 201 (83) Payments on long-term debt, net (36) (442) Restricted cash (795) (446) Net cash used in financing activities (627) (1,227) Net increase in cash and equivalents 150 253 Cash and equivalents, beginning of period 288 380 Cash and equivalents, end of period $ 438 $ 633 Non Cash Investing and Financing Activities: Transfer of related party accounts receivable to related party notes receivable $ 340 $ -0- The accompanying notes are an integral part of the financial statements. 7 METEOR INDUSTRIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1 - ORGANIZATION ORGANIZATION - Meteor Industries, Inc. ("Meteor" or "Company") was incorporated on December 22, 1992, as a Colorado based holding company. In January 2000, Meteor Marketing, Inc.("Meteor Marketing"), a Colorado corporation and a wholly owned subsidiary of the Company, merged downstream with and into Fleischli Oil Company, Inc. ("Fleischli"), a Wyoming corporation and a wholly owned subsidiary of Meteor Marketing. Fleischli became the surviving corporation and immediately changed its name to "Meteor Marketing, Inc." In addition, the significant wholly owned subsidiaries included in Meteor Marketing which are: Graves Oil & Butane Co., Inc. ("Graves"), and Tri-Valley Gas Co. ("Tri-Valley") merged their marketing and distribution operations with and into Meteor Marketing. The Company also owns Meteor Holdings LLC ("MHL") and Innovative Solutions and Technologies, Inc. ("IST"). NOTE 2 - BASIS OF PRESENTATION These financial statements have been prepared in accordance with generally accepted accounting 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, 1999, filed with the Company's Form 10-K. NEW ACCOUNTING PRONOUNCEMENT - In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("FAS") NO. 133, "Accounting for Derivative Instruments and Hedging Activities." This statement establishes accounting and reporting standards requiring that every derivative instrument be recorded on the balance sheet as either an asset or liability measured at its fair value. FAS No. 133 also requires that changes in the derivative's fair value be recognized currently in earnings unless specific hedge accounting criteria are met. In June 1999, the FASB issued FAS No. 137 which defers the effective date of FAS No. 133 to fiscal years beginning after June 15, 2000. The Company will adopt FAS No. 133 in the first quarter of fiscal 2001, but does not expect such adoption to materially affect its financial statement presentation. NOTE 3 -EARNINGS PER SHARE Basic earnings per common share are computed by dividing net income by the weighted average number of common shares outstanding. Diluted earnings per share are calculated taking into account all potentially dilutive securities. A reconciliation of the denominator used in the calculation of basic and diluted earnings per share is presented below. Antidilutive stock options and 8 warrants of 1,337,473 and 1,947,933 for the three months ended March 31, 2000 and 1999 respectively, are omitted from the denominator. The numerator is unchanged. The shares available upon exchange of a subsidiary's preferred stock of 1,043,305 and 1,014,635 for the three months ended March 31, 2000 and 1999, respectively, are omitted as they are antidilutive. Three Months Ended March 31, ------------------- 2000 1999 ---- ---- Denominator: Average common shares outstanding 3,524,169 3,423,694 Average dilutive stock options and warrants 4,565 4,667 Diluted shares 3,528,734 3,428,361 NOTE 4 - CONTINGENCIES The Company is subject to various federal, state and local environmental laws and regulations. Although Company environmental policies and practices are designed to ensure compliance with these laws and regulations, future developments and increasingly stringent regulations could require the Company to make additional unforeseen environmental expenditures. Environmental accruals are routinely reviewed on an interim basis as events and developments warrant. The Company is a co-signer on a note for its 50% owned equity investment in Coors Pyramid LLC. The amount payable on the note at March 31, 2000, is $370,112. The Company has guaranteed a $1,350,000 note payable on the office building in which the Company's corporate offices are located. The amount payable on the note at March 31, 2000 is $1,350,000. In August 1999, the Company signed a definitive agreement to acquire Jardine Petroleum Company ("Jardine"). Jardine is a petroleum distribution company with operations primarily in Utah. The closing date is estimated to occur before the end of the third quarter of the year 2000. The Company is a party to certain litigation that has arisen in the normal course of its business and that of its subsidiaries. In the opinion of management, none of this litigation is likely to have a material effect on the Company's financial position or results of operation. NOTE 5 - RELATED PARTY TRANSACTIONS The Company has both short-term and long-term notes receivable from Capco Energy, Inc. ("Capco"), an affiliate of the Company. The notes bear interest and are secured by all of the outstanding shares of a wholly owned subsidiary of Capco and by shares of the Company's stock held by Capco. The total notes receivable balance at March 31, 2000 and at December 31, 1999, is $2,770,000 and $2,430,000. 9 NOTE 6 - BUSINESS SEGMENTS The Company operates in six business segments: gasoline, diesel, propane, grease and lubes, convenience store items and other products (anti-freeze, chemicals, services, hardware, rental income and miscellaneous items). Senior management evaluates and makes operating decisions about each of these operating segments based on a number of factors. Two of the most significant factors used in evaluating the operating performance are: net sales and gross profit before depreciation and amortization as presented below: Three months ended March 31, 2000 1999 Net sales Gasoline $ 11,109 $ 5,550 Diesel 22,945 12,733 Propane 2,197 1,585 Greases and lubes 4,034 4,005 Convenience store items -0- 1,303 Other items 1,732 1,974 Total net sales $ 42,017 $ 27,150 Gross profit, before depreciation Gasoline $ 859 $ 778 Diesel 1,899 1,803 Propane 774 710 Greases and lubes 901 799 Convenience store items -0- 313 Other items 1,205 1,040 Total gross profit $ 5,638 $ 5,443 Reconciliation to net income: Selling, general and administrative $ 4,547 $ 4,194 Depreciation and amortization 599 480 Income from operations 492 769 Other expense 260 130 Income tax expense 100 235 Minority interest 123 123 Net income $ 9 $ 281 In December 1999, Meteor sold its retail store operating subsidiary to allow the Company to focus on its core business of commercial, wholesale and cardlock petroleum distribution. The Company does not account for assets by business segment and, therefore, depreciation and amortization are not factors used in evaluating operating performance. ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 10 FORWARD-LOOKING STATEMENTS This Report contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Act of 1995. Such statements are based on management's current expectations and are subject to a number of factors and uncertainties which could cause actual results to differ materially from those described in the forward-looking statements. The following discussion of the Company's financial condition and results of operations should be read in conjunction with the historical financial statements and notes thereto of Meteor, included elsewhere in this document. INTRODUCTION The Company is engaged in the distribution and marketing of refined petroleum products including gasoline, diesel fuel, propane and lubricants. The Company's growth, since its inception in 1992, has been primarily through the acquisition of businesses in the petroleum marketing industry. RESULTS OF OPERATIONS The Company had sales of $42.0 million for the three months ended March 31, 2000, compared to $27.2 million for the three months ended March 31, 1999, a $14.8 million(54%) increase. The increase is primarily due to an increase in product sales volumes as a result of the Carroll Oil Company acquisition in April 1999, and higher product prices during the current period. Gross profit for the three months ended March 31, 2000 and 1999, was $5.6 million and $5.4 million, respectively. The increase is due to the acquisition of Carroll Oil Company generating greater volume, partially offset by lower gross margins from the wholesale accounts obtained from the acquisition. Net income decreased for the three months ended March 31, 2000, to $9,000 from $281,000 in 1999. The decrease is due to expenses incurred in building the infrastructure necessary for future growth of the Company. In addition, interest, depreciation and amortization expense increased primarily due to the acquisition of Carroll Oil Company. These expenses were partially offset by an increase in gross profit resulting from greater volume and lower income tax expense. Gasoline Segment Gasoline volumes increased to 12.0 million gallons for the three months ended March 31, 2000, compared to 10.6 million gallons in 1999, an increase of 1.4 million (13%). The volume increase is primarily due to the Carroll Oil Company acquisition. Gasoline sales increased to $11.1 million for the three months ended March 31, 2000, compared to $5.6 million in 1999, an increase of $5.5 million (98%) due to the increase in sales volumes and higher product prices during the current period. Gross profit increased to $.9 million for the three months ended March 31, 2000, from $.8 million in 1999, due to increased sales volumes from accounts acquired in the Carroll Oil Company acquisition. Gross profit per gallon of gasoline sold remained constant at $.07 for the three months ended March 31, 2000 and 1999. 11 Diesel Segment Diesel volumes increased to 24.6 million gallons for the three months ended March 31, 2000, from 24.3 million in 1999, an increase of .3 million gallons (1%) due to the Carroll Oil Company acquisition. Diesel sales increased to $22.9 million for the three months ended March 31, 2000, from $12.7 million in 1999,an increase of $10.2 million (80%) due to increased sales volumes and higher product prices during the current period. Gross profit increased to $1.9 million for the three months ended March 31, 2000, from $1.8 million in 1999, an increase of $.1 million (6%). Gross profit per gallon of diesel sold increased to $.08 for the three months ended March 31, 2000, from $.07 in 1999. Propane Segment Propane volumes decreased to 2.7 million gallons for the three months ended March 31, 2000, from 3.0 million gallons in 1999, a .3 million decrease (10%) due to a decrease in wholesale volume caused by unseasonably warm weather in our marketing area. Propane sales increased to $2.2 million for the three months ended March 31, 2000, from $1.6 million in 1999, an increase of $.6 million (38%) due to higher product prices during the current period, partially offset by a decrease in sales volume. Gross profit increased to $.8 million for the three months ended March 31, 2000, from $.7 million in 1999, due to an increase in the gross profit per gallon of propane sold to $.29 for the three months ended March 31, 2000, compared to $.23 in 1999, and a larger decrease in wholesale propane sales volume versus the lower decrease of higher-margin residential sales volumes. Greases and Lubes Segment Grease and lube sales remained constant at $4.0 million for the three months ended March 31, 2000, compared to 1999. Gross profit increased to $.9 million for the three months ended March 31, 2000, compared to $.8 million, an increase of $.1 million (13%). Convenience Store Items Segment Sales of convenience store items decreased to -0- for the three months ended March 31, 2000, from $1.3 million in 1999, due to the sale of Meteor Stores, Inc. in December 1999. Other Items Segment Sales of other items, which consist of anti-freeze, chemicals, services, hardware, rental income and miscellaneous items, decreased to $1.7 million for the three months ended March 31, 2000, compared to $2.0 million in 1999, a decrease of $.3 million (15%). Gross profit increased to $1.2 million for the three months ended March 31, 2000, compared to $1.0 million in 1999, an increase of $.2 million (20%) due to rental income. Expenses Selling, general, and administrative expenses were $4.5 million for the three months ended March 31, 2000, compared to $4.2 million for the three months ended March 31, 1999, an increase of $.3 million (7%). The increase is primarily related to the acquisition of Carroll Oil Company and corresponding increase in the level of activity and costs incurred to build the infrastructure necessary for future growth of the Company. 12 Depreciation and amortization for the three months ended March 31, 2000, was $.6 million compared to $.5 million for the three months ended March 31, 1999. The increase is attributable to the Carroll Oil Company acquisition and property, plant and equipment additions. Other expense, net increased to $260,000 for the three months ended March 31, 2000, compared to $130,000 in 1999, primarily due to increased interest expense and the recognition of a $140,000 gain recorded in 1999, related to the sale of an investment. Income Taxes The provision for income taxes for the three months ended March 31, 2000, was $100,000 compared to $235,000 for the same period ended March 31, 1999. The decrease is due to lower taxable income for the three months ended March 31, 2000, as compared to 1999. LIQUIDITY AND CAPITAL RESOURCES At March 31, 2000, the Company had a working capital deficit of $46,000 compared to a working capital deficit of $345,000 at December 31, 1999. Net cash provided by operating activities totaled $1.1 million for the three months ended March 31, 2000, compared to $2.0 million for the three months ended March 31, 1999. This decrease in cash provided by operating activities is principally related to changes in working capital items due to higher product prices. Net cash used in investing activities totaled $.3 million for the three months ended March 31, 2000, compared to cash used of $.5 million for the three months ended March 31, 1999. The decrease in cash used in investing activities is principally related to a reduction in expenditures for property, plant and equipment and the sale of a parcel of land in Colorado. Net cash used in financing activities totaled $.6 million for the three months ended March 31, 2000, compared to cash used of $1.2 million for the three months ended March 31, 1999. This decrease in cash used in financing activities primarily related to less payments made on the revolving credit facility and additional long-term debt. The Company has a revolving bank credit facility with Wells Fargo Business Credit, Inc. for $11 million which expires May 31, 2000. The credit line is subject to the borrowing base, as defined. At March 31, 2000, the borrowing base was approximately $9.3 million. $9.3 million was borrowed against the facility and is recorded as a current liability. During the quarter the Company was in default on timely filing of financial information to the lender. A waiver for this default was obtained from the lender. The Company is currently working with the lender to renegotiate and extend this facility. If the facility is not renewed by the lender, long-term debt in the amount of $2.4 million at March 31, 2000, is due upon demand from the lender. The Company has various loans with banks, suppliers and individuals which require principal payments of $1.4 million in 2000. The Company is obligated to pay lease costs of approximately $.9 million in 2000 for land, building, facilities and equipment. 13 A subsidiary of the Company has preferred stock outstanding which requires no periodic payments but accrues an 8% dividend and must be redeemed for $5.5 million including accrued dividends at the holder's 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 plus accrued dividends. The Company is currently discussing the extension of the redemption date with the holder(s) of the preferred stock. The Company is responsible for any contamination of land it owns or leases. However, the Company may have limitations on any potential contamination liabilities as well as claims for reimbursement from third parties. For the three months ended March 31, 2000 and 1999, the Company expended $46,000 and $42,000, respectively, for site assessment and related cleanup costs. The Company has accrued $57,000 at March 31, 2000, for environmental remediation which management believes is adequate to cover known remediation requirements. 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. (a) Exhibit 27 Financial Data Schedule Filed herewith electronically (b) Reports on From 8-K. None. 14 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/ Richard E. Kisser Richard E. Kisser, Chief Financial and Accounting Officer Dated: May 12, 2000 15 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. 3-MOS DEC-31-2000 MAR-31-2000 1,833 0 15,676 301 3,655 23,539 22,352 (4,642) 46,031 23,585 0 4 0 0 8,462 46,031 42,017 42,017 36,379 5,146 260 0 362 232 100 9 0 0 0 9 0 0
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