-----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, Wj5KXGQl9kCjmQHYPxGJkepNgTQX9JXSUpFqmvw3oztWjhtEXSKt1vTx0yZ/JSJx At0DpE/MLUx1a6HIEJYlHQ== 0000775057-00-000003.txt : 20000209 0000775057-00-000003.hdr.sgml : 20000209 ACCESSION NUMBER: 0000775057-00-000003 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000208 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALTEX INDUSTRIES INC CENTRAL INDEX KEY: 0000775057 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 840989164 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 001-09030 FILM NUMBER: 526236 BUSINESS ADDRESS: STREET 1: PO BOX 1057 STREET 2: 217 S RIDGE STREET CITY: BRECKENRIDGE STATE: CO ZIP: 80424-1057 BUSINESS PHONE: 9704536641 MAIL ADDRESS: STREET 1: P O BOX 1057 217 S RIDGE STREET STREET 2: P O BOX 1057 217 S RIDGE STREET CITY: BRECKENRIDGE STATE: CO ZIP: 80424-1067 10QSB 1 FORM 10QSB FOR ALTEX INDUSTRIES, INC. - 12/31/99 - -------------------------------------------------------------------------------- U. S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB X Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended December 31, 1999 Transition report under Section 13 or 15(d) of the Exchange Act For the transition period from to . Commission file number 1-9030 ALTEX INDUSTRIES, INC. ----------------------------------------------------------------------- (Exact Name of Small Business Issuer as Specified in Its Charter) Delaware 84-0989164 - ------------------------------- ------------------- (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) POB 1057 Breckenridge CO 80424-1057 ----------------------------------------------------- (Address of Principal Executive Offices) (970) 453-6641 ----------------------------------------------------- (Issuer's Telephone Number, Including Area Code) Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes X No Number of shares outstanding of issuer's Common Stock as of February 3, 2000: 15,561,491 Transitional Small Business Disclosure Format: Yes No X Page 1 of 7 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS ALTEX INDUSTRIES, INC. AND SUBSIDIARIES CONSOLODATED BALANCE SHEET DECEMBER 31, 1999 (UNAUDITED) ASSETS CURRENT ASSETS Cash and cash equivalents $ 1,664,000 Accounts receivable 79,000 Other receivables 14,000 Other 2,000 Total current assets 1,759,000 PROPERTY AND EQUIPMENT, AT COST Proved oil and gas properties (successful efforts method) 2,139,000 Other 74,000 2,213,000 Less accumulated depreciation, depletion, amortization, and valuation allowance (2,124,000) Net property and equipment 89,000 OTHER ASSETS 33,000 $ 1,881,000 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 28,000 Accrued production costs 32,000 Accrued reclamation, restoration, and dismantlement 1,000 Other accrued expenses 26,000 Total current liabilities 87,000 --------------- STOCKHOLDERS' EQUITY Preferred stock, $.01 par value. Authorized 5,000,000 shares, none issued - Common stock, $.01 par value. Authorized 50,000,000 shares, issued 15,717,491 shares 157,000 Additional paid-in capital 14,279,000 Treasury stock, at cost, 156,000 shares at December 31, 1999 (9,000) Accumulated deficit (12,274,000) Note receivable from stockholder (359,000) 1,794,000 $ 1,881,000
See accompanying notes to consolidated, condensed financial statements. Page 2 of 7 ALTEX INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) THREE MONTHS ENDED DECEMBER 31 1999 1998 REVENUE Oil and gas sales $ 178,000 87,000 Interest income 25,000 26,000 Other income 2,000 2,000 205,000 115,000 COSTS AND EXPENSES Lease operating 73,000 66,000 Production taxes 21,000 12,000 General and administrative 90,000 95,000 Reclamation, restoration, and dismantlement -- 1,000 Depreciation, depletion, amortization, and valuation allowance 5,000 45,000 189,000 219,000 NET EARNINGS (LOSS) $ 16,000 (104,000) EARNINGS (LOSS) PER SHARE $ * (0.01) WEIGHTED AVERAGE SHARES OUTSTANDING 15,687,263 15,741,198
*Less than $.01 per share See accompanying notes to consolidated, condensed financial statements. Page 3 of 7 ALTEX INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOW (UNAUDITED) THREE MONTHS ENDED DECEMBER 31 1999 1998 CASH FLOWS FROM OPERATING ACTIVITIES Net earnings (loss) $ 16,000 (104,000) Adjustments to reconcile net earnings to net cash provided by operating activities Depreciation, depletion, amortization, and valuation allowance 5,000 45,000 Decrease (increase) in accounts receivable (8,000) 5,000 Increase in other receivables (1,000) (1,000) Decrease in other current assets -- -- Increase in accounts payable 12,000 10,000 Increase in accrued production costs 4,000 11,000 Decrease in accrued reclamation, restoration, and dismantlement (3,000) (16,000) Decrease in other accrued expenses (9,000) (9,000) Net cash provided by (used in) operating activities 16,000 (59,000) CASH FLOWS FROM INVESTING ACTIVITIES Expenditures for oil and gas property development -- (1,000) Other additions to property and equipment (3,000) -- Net cash used in investing activities (3,000) (1,000) CASH FLOWS FROM FINANCING ACTIVITIES Acquisition of treasury stock (9,000) (3,000) Net cash used in financing activities (9,000) (3,000) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 4,000 (63,000) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,660,000 1,734,000 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,664,000 1,671,000
See accompanying notes to consolidated, condensed financial statements. Page 4 of 7 ALTEX INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED, CONDENSED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1 - FINANCIAL STATEMENTS. In the opinion of management, the accompanying unaudited, consolidated, condensed financial statements contain all adjustments necessary to present fairly the financial position of the Company as of December 31, 1999, and the cash flows and results of operations for the three months then ended ("Q1FY00"). Such adjustments consisted only of normal recurring items. Certain reclassifications have been made to the financial statements for the three months ended December 31, 1998 ("Q1FY99"), to conform with the classifications used in the financial statements for Q1FY00. The results of operations for the periods ended December 31 are not necessarily indicative of the results for the full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The accounting policies followed by the Company are set forth in Note 1 to the Company's consolidated financial statements contained in the Company's 1999 Annual Report on Form 10-KSB, and it is suggested that these consolidated, condensed financial statements be read in conjunction therewith. - -------------------------------------------------------------------------------- "SAFE HARBOR" STATEMENT UNDER THE UNITED STATES PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 Statements that are not historical facts contained in this Form 10-QSB are forward-looking statements that involve risks and uncertainties that could cause actual results to differ from projected results. Factors that could cause actual results to differ materially include, among others: general economic conditions; the market prices of oil and natural gas; the risks associated with exploration and production in the Rocky Mountain region; the Company's ability to find, acquire, and develop new properties and its ability to produce and market its oil and gas reserves; operating hazards attendant to the oil and natural gas business; uncertainties in the estimation of proved reserves and in the projection of future rates of production and timing of development expenditures; the strength and financial resources of the Company's competitors; the Company's ability to find and retain skilled personnel; climatic conditions; availability and cost of material and equipment; delays in anticipated start-up dates; environmental risks; the results of financing efforts; and other uncertainties detailed elsewhere herein and in the Company's filings with the Securities and Exchange Commission. - -------------------------------------------------------------------------------- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION. FINANCIAL CONDITION Cash balances increased in Q1FY00 because of net cash provided by operating activities, and accounts receivable increased because of increased sales. The Company is completing the restoration of the area that had contained its East Tisdale Field in Johnson County, Wyoming. The Company recognized $20,000 in reclamation, restoration, and dismantlement expense ("RR&D") related to the Field in 1998 and expended $16,000 and $3,000 on RR&D activities in the Field during Q1FY99 and Q1FY00, respectively. The Company has removed all equipment from the field and has recontoured and reseeded virtually all disturbed areas in the Field. Barring unforeseen events, the Company does not believe that the expense associated with any remaining restoration activities in the Field will be material, although this cannot be assured. After its bonds with the State of Wyoming and the Bureau of Land Management are released, the Company does not believe it will have any further liability in connection with the Field, although this cannot be assured. The Company regularly assesses its exposure to both environmental liability and RR&D. The Company does not believe that it currently has any material exposure to environmental liability or to RR&D, net of salvage value, although this cannot be assured. At February 3, 2000, nominal world oil prices were unusually high. At such oil price levels, all other things being equal, cash flow from operations is likely to be higher than it would have been at lower price levels. However, unless the Company's production of oil and gas increases as the result of acquisitions of producing oil and gas properties, successful drilling activities, or successful recompletions, the Company is likely to experience negative cash flow from operations in the near future. With the exception of capital expenditures related to production acquisitions or drilling or recompletion activities, none of which are currently planned, the cash flows that could result from such acquisitions or activities, and the current high level of oil prices, the Company knows of no trends, events, or uncertainties that have or are reasonably likely to have a material impact on the Company's short-term or long-term liquidity. Except for cash generated by the operation of the Company's producing oil and gas properties, asset sales, or interest income, the Company has no internal or external sources of liquidity other than its working capital. At February 3, 2000, the Company had no material commitments for capital expenditures. Page 5 of 7 RESULTS OF OPERATIONS Oil sales increased 116% from $49,000 in Q1FY99 to $106,000 in Q1FY00, and gas sales increased 89% from $38,000 in Q1FY99 to $72,000 in Q1FY00. Oil sales increased because a 17% decrease in oil sold was offset by a 160% increase in realized oil prices. Gas sales increased because a 37% decrease in gas sold was offset by a 199% increase in realized gas prices. Production taxes increased because of increased sales. Depreciation, depletion, amortization, and valuation allowance ("DDA&V") in Q1FY99 consisted of $5,000 in depreciation and depletion expense and impairment expense of $40,000. Net earnings (loss) increased from a loss of $104,000 in Q1FY99 to earnings of $16,000 in Q1FY00 because of increased sales and decreased expenses. LIQUIDITY Operating Activities. Cash provided by (used in) operating activities increased from $59,000 used in operating activities in Q1FY99 to $16,000 provided by operating activities in Q1FY00 because of increased net earnings. Investing Activities. In Q1FY99 the Company expended $1,000 for oil and gas property development, and in Q1FY00 the Company expended $3,000 for other additions to property and equipment. Financing Activities. The Company expended $3,000 and $9,000 to acquire 35,000 and 156,000 shares of treasury stock in Q1FY99 and Q1FY00, respectively. The Company's revenues and earnings are functions of the prices of oil, gas, and natural gas liquids and of the level of production expense, all of which are highly variable and beyond the Company's control. In addition, because the quantity of oil and gas produced from existing wells declines over time, the Company's sales and net income will decline unless rising prices offset production declines or the Company increases its net production by investing in the drilling of new wells, in successful work overs, or in the acquisition of interests in producing oil or gas properties. At February 3, 2000, nominal world oil prices were unusually high, and both the Company and the oil futures markets expect price levels to decline. Unless prices remain at the current high levels, the Company is unlikely to experience material positive earnings unless it dramatically increases production levels. With the exception of unanticipated variations in production levels, unanticipated RR&D, unanticipated environmental expense, and current high oil price levels, the Company is not aware of any other trends, events, or uncertainties that have had or that are reasonably expected to have a material impact on the net sales or revenues or income from continuing operations. - -------------------------------------------------------------------------------- PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits 27. Financial Data Schedule - Submitted only in electronic format, pursuant to Item 601(c) of Regulation S-B (b) Reports on Form 8-K. No reports on Form 8-K were filed during the quarter. - -------------------------------------------------------------------------------- SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ALTEX INDUSTRIES, INC. Date: February 8, 2000 By: /s/ STEVEN H. CARDIN - ------------------------ --------------------------- Steven H. Cardin Chief Executive Officer and Principal Financial Officer Page 6 of 7 Exhibit Index 27 Financial Data Schedule - Submitted only in electronic format, pursuant to Item 601(c) of Regulation S-B Page 7 of 7 EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEETS AND THE CONSOLIDATED STATEMENTS OF OPERATIONS OF ALTEX INDUSTRIES, INC. FOR THE QUARTER ENDED 12/31/99, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS SEP-30-2000 DEC-31-1999 1,664,000 0 93,000 0 0 1,759,000 2,213,000 2,124,000 1,881,000 87,000 0 0 0 157,000 1,637,000 1,881,000 178,000 205,000 0 189,000 0 0 0 16,000 0 16,000 0 0 0 16,000 0.00 0.00
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