UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JULY 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(D) OR THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 000-21825
STREICHER MOBILE FUELING, INC.
(Exact name of small business issuer as specified in its charter)
FLORIDA 65-0707824
(State of Incorporation) (IRS Employer Identification Number)
2720 NW 55TH COURT, FORT LAUDERDALE, FLORIDA, 33309
(Address of principal executive offices) (Zip Code)
(954) 739-3880
(Issuer's telephone number, including area code)
Check whether the issuer 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 requirements for the past 90
days. Yes X No _____.
As of September 8, 1997, 2,575,000 shares of the issuer's common stock were
outstanding.
This report contains 17 pages. There are no exhibits.
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STREICHER MOBILE FUELING, INC.
FORM 10-QSB
INDEX
10-QSB PART AND ITEM NO.
PAGE
Part I-Financial Information REFERENCE
---------
Item 1. Financial Statements (Unaudited)
Balance Sheets as of
July 31, 1997 and January 31, 1997 ..................3-4
Statements of Operations for the Three and
Six month periods ended July 31, 1997 and 1996.........5
Statements of Cash Flows for the Six
month periods ended July 31, 1997 and 1996.............6
Notes to Financial Statements........................7-9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations................10-14
Part II-Other Information
Items 1-6. ...............................................15-16
Signature Page ..................................................17
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<TABLE>
<CAPTION>
STREICHER MOBILE FUELING, INC.
BALANCE SHEETS
(UNAUDITED)
PART 1
ITEM 1
JULY 31, JANUARY 31,
ASSETS 1997 1997
------ ------------ ------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 1,911,475 $ 2,848,000
Investments (Note 8) 117,322 115,751
Accounts receivable, net of allowance for doubtful
accounts of $68,000 and $51,000, respectively 4,097,647 4,352,761
Inventories 78,952 76,961
Prepaid expenses and other 196,120 254,548
------------ ------------
Total current assets 6,401,516 7,648,021
Property and Equipment:
Fuel trucks and automobiles 4,827,141 3,586,670
Machinery and equipment 416,168 456,668
Furniture and fixtures 370,993 285,233
Construction in process 154,304 6,282
------------ ------------
5,768,606 4,334,853
Less accumulated depreciation (1,157,608) (966,074)
------------ ------------
4,610,998 3,368,779
Note receivable from related party (Note 6) 309,565 319,043
Other assets 191,613 67,127
------------ ------------
Total assets $ 11,513,692 $ 11,402,970
============ ============
</TABLE>
3
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<TABLE>
<CAPTION>
STREICHER MOBILE FUELING, INC.
BALANCE SHEETS
(UNAUDITED)
(CONTINUED)
JULY 31, JANUARY 31,
LIABILITIES AND SHAREHOLDERS' EQUITY 1997 1997
- ------------------------------------ ------------ ------------
<S> <C> <C>
Current Liabilities:
Bank line of credit payable $ 2,487,900 $ 1,404,469
Current portion of long-term debt 676,321 632,028
Current portion of capital lease obligations 105,390 108,824
Accounts payable 1,814,795 2,411,031
Accrued expenses 326,798 426,818
Customer deposits 160,170 169,670
------------ ------------
Total current liabilities 5,571,374 5,152,840
Long-term Liabilities:
Long-term debt, excluding current portion 1,229,777 1,017,795
Capital lease obligations, excluding current portion 54,924 105,703
Deferred income taxes (Note 3) 7,219 165,219
------------ ------------
Total liabilities 6,863,294 6,441,557
------------ ------------
Commitments and Contingencies: (Note 5)
Shareholders' Equity:
Preferred stock, $.01 par value, 1,000,000 shares authorized,
none issued and outstanding -- --
Common stock, $.01 par value, 20,000,000 shares authorized,
2,575,000 shares issued and outstanding 25,750 25,750
Additional paid-in capital 5,220,758 5,220,758
Unrealized gain on investment 19,737 19,737
Accumulated deficit (615,847) (304,832)
------------ ------------
Total shareholders' equity 4,650,398 4,961,413
------------ ------------
Total liabilities and shareholders' equity $ 11,513,692 $ 11,402,970
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
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<TABLE>
<CAPTION>
STREICHER MOBILE FUELING, INC.
STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTH PERIODS
ENDED JULY 31, 1997 AND 1996
(UNAUDITED)
THREE MONTH PERIODS SIX MONTH PERIODS
ENDED JULY 31, ENDED JULY 31,
---------------------------- ----------------------------
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Fuel and service charge revenue $ 6,557,389 $ 5,097,159 $ 13,442,638 $ 10,321,830
Fuel taxes 3,199,484 1,847,178 6,303,312 3,566,025
------------ ------------ ------------ ------------
Total revenues 9,756,873 6,944,337 19,745,950 13,887,855
Cost of fuel and delivery expenses 5,707,780 4,477,316 11,983,065 9,194,904
Fuel taxes 3,199,484 1,847,178 6,303,312 3,566,025
------------ ------------ ------------ ------------
Total cost of sales 8,907,264 6,324,494 18,286,377 12,760,929
Gross Profit 849,609 619,843 1,459,573 1,126,926
Operating expenses 937,079 650,580 1,817,548 1,244,393
------------ ------------ ------------ ------------
Loss from operations (87,470) (30,737) (357,975) (117,467)
Interest expense (103,829) (127,963) (190,152) (260,252)
Interest income 43,079 6,387 79,112 6,387
------------ ------------ ------------ ------------
Loss before income tax benefit (148,220) (152,313) (469,015) (371,332)
Income tax benefit 46,000 54,851 158,000 133,851
------------ ------------ ------------ ------------
Net loss $ (102,220) $ (97,462) $ (311,015) $ (237,481)
============ ============ ============ ============
Net loss per share $ (.04) $ (.06) $ (.12) $ (.16)
============ ============ ============ ============
Weighted average common shares
outstanding 2,575,000 1,500,000 2,575,000 1,500,000
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
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<TABLE>
<CAPTION>
STREICHER MOBILE FUELING, INC.
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTH PERIODS ENDED JULY 31, 1997 AND 1996
(UNAUDITED)
1997 1996
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (311,015) $ (237,481)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 218,714 290,980
Deferred income tax benefit (158,000) --
Provision for doubtful accounts 18,000 --
Changes in operating assets and liabilities:
Accounts receivable 237,114 (741,432)
Inventories (1,991) 921
Prepaid expenses and other 58,428 57,363
Note receivable from related party 9,478 (21,136)
Other assets (124,486) (107,002)
Accounts payable and accrued expenses (696,256) 186,962
Customer deposits (9,500) 4,079
----------- -----------
NET CASH USED IN OPERATING ACTIVITIES (759,514) (566,746)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of investment -- 109,348
Purchase of investment (1,571) --
Purchases of property and equipment (1,460,933) (499,220)
----------- -----------
NET CASH USED IN INVESTING ACTIVITIES (1,462,504) (389,872)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under line of credit 1,083,431 668,603
Borrowings under long-term debt 542,846 1,126,004
Principal payments on long-term debt (286,571) (885,499)
Principal payments on capital lease obligations (54,213) (134,653)
----------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,285,493 774,455
----------- -----------
DECREASE IN CASH AND CASH EQUIVALENTS (936,525) (182,163)
CASH AND CASH EQUIVALENTS, beginning of period 2,848,000 189,508
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 1,911,475 $ 7,345
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the period for:
Interest $ 150,656 $ 267,926
=========== ===========
Income taxes $ -- $ --
=========== ===========
SUPPLEMENTAL DISCLOSURE OF NONCASH
INVESTING AND FINANCING ACTIVITIES:
Capital lease obligations $ -- $ 20,483
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
STREICHER MOBILE FUELING, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
(1) NATURE OF OPERATIONS
Streicher Mobile Fueling, Inc. (the "Company") was incorporated in
October 1996. Prior to the effective date of the Company's registration
statement for its initial public offering on December 11, 1996, the Company's
business was conducted through the Mobile Fueling Division of Streicher
Enterprises, Inc., which began mobile fueling operations in 1983. Streicher
Enterprises, Inc. ("Enterprises") completed a corporate reorganization on
December 11, 1996, pursuant to which the Mobile Fueling Division of Enterprises
transferred its assets, liabilities and operations to the Company. Enterprises,
which currently owns 52.4% of the Company's common stock, is wholly owned by the
President and Chief Executive officer of the Company. The corporate
reorganization has been retroactively reflected in the accompanying financial
statements and notes thereto as if such transfer had occurred at the inception
of the former Mobile Fueling Division. Accordingly, the accumulated deficit
includes the cumulative results of the former Mobile Fueling Division.
The Company delivers mechanized mobile fleet fueling and electronic
fuel management to customers that operate large fleets of vehicles (such as
governmental agencies, utilities, major trucking lines, hauling and delivery
services, and national courier services). At July 31, 1997, the Company had
operations in California, Florida, Georgia, Tennessee, Louisiana and Texas. The
Company closed three Southern California locations in May 1997 and reopened one
California office in a new location, with a new management group, on July 1,
1997.
(2) BASIS OF PRESENTATION
The unaudited financial statements included herein have been prepared
in accordance with the instructions to Form 10-QSB and do not include all the
information and footnotes required by generally accepted accounting principles;
however, they do include all adjustments of a normal recurring nature which, in
the opinion of management, are necessary to present fairly the results of
operations of the Company for the interim periods presented. Certain prior
period amounts have been reclassified to conform with current quarter
presentation. These interim financial statements should be read in conjunction
with the Company's audited financial statements and related notes included in
the Company's Annual Report on Form 10-KSB for the year ended January 31, 1997.
The results of operations for the interim periods presented are not necessarily
indicative of the results to be expected for the entire year.
(3) INCOME TAXES
The Company provides for Federal and State income taxes at its
estimated annual effective income tax rate. Deferred income taxes are recorded
to reflect the tax consequences on future years
7
<PAGE>
of differences between the tax basis of assets and liabilities and the amounts
recorded for financial reporting purposes. Income taxes for the period ended
July 31, 1996 have been provided as if the Company had been a separate taxable
entity since inception of the former Mobile Fueling Division. Deferred income
tax liabilities consist primarily of the tax effect of accelerated depreciation
for income tax purposes, reduced by the tax effect of net operating loss and
alternative minimum tax carryforwards. Realization of such tax benefits is
dependent on generating sufficient taxable income prior to expiration of the
carryforward period. Although realization is not assured, management of the
Company believe it is more likely than not that all of the net operating loss
and alternative minimum tax carryforwards will be realized. The amount of the
recorded tax benefit considered realizable, however, could be reduced in the
near term if estimates of future taxable income during the carryforward period
are reduced.
(4) REVENUES AND COST OF SALES
The Company derives all of its revenue from providing mobile fueling
services. Revenue is composed principally of sales of gasoline and diesel fuels,
fuel taxes and mobile fueling service charges. Cost of sales is composed
principally of the cost of fuel, fuel taxes and transportation costs (primarily
trucking and payroll charges).
(5) COMMITMENTS AND CONTINGENCIES
The Company currently has commitments to purchase 10 custom fuel trucks
for use in the Company's operations with an aggregate cost of approximately $1.6
million. These units will be delivered at the rate of one or two units per month
beginning in September 1997.
(6) RELATED PARTY TRANSACTION
As of July 31, 1997, the Company has a note receivable from Enterprises
amounting to $309,565, which bears interest at 8.25 percent per annum. This note
primarily represents tax benefits generated by the Company and allocated to
Enterprises, cash advances to Enterprises and certain expenses of Enterprises
paid by the Company prior to its initial public offering.
(7) STOCK OPTIONS
In April 1997, the Company increased the number of shares of common
stock of the Company reserved for issuance under its Stock Option Plan (the
"Plan") from 100,000 shares to 250,000 shares. The Plan was adopted by the
Company in December 1996 and is designed to serve as an incentive for attracting
and retaining qualified employees. To date, no options have been granted to
employees under the plan. The Company has granted options to purchase 48,000
shares of common stock at an exercise price of $8.375 per share under the Plan
to its four non-employee directors. These options vest at a rate of 1,000 shares
per month for the twelve month period commencing February 1, 1997.
(8) INVESTMENTS
At July 31, 1997, a certificate of deposit amounting to $ 67,300 is
restricted as to withdrawal since it serves as collateral for a loan made to the
Company.
8
<PAGE>
(9) NEW ACCOUNTING PRONOUNCEMENT
In February 1997, The Financial Accounting Standards Board issued SFAS
No. 128, "Earnings Per Share" which requires adoption for periods ending after
December 15, 1997. SFAS No. 128 simplifies the accounting for earnings per share
by requiring the presentation of basic earnings per share including only
outstanding common stock and diluted earnings per share including the effect of
dilutive common stock equivalents. The Company's basic and diluted earnings per
share are the same since the Company's common stock equivalents are
antidilutive. In addition, the Company's basic and diluted earnings per share
are the same as that computed under APB Opinion No. 15, "Earnings Per Share," as
presented in the accompanying consolidated statements of operations. SFAS No.
128 must be adopted for periods ending after December 15, 1997 and be
retroactively reflected in the financial statements.
9
<PAGE>
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
All amounts of 1.0 million or more are rounded to the nearest one
hundredth of a million; all other amounts are rounded to the nearest one
thousand and all percentages are stated to the nearest one tenth of one percent.
This Form 10-QSB contains "forward-looking statements" which involve
risks and uncertainties. The Company's actual results could differ materially
from those in the forward-looking statements as a result of certain factors,
including those set forth under the caption "Certain Factors Affecting Future
Operating Results" in Item 6 of the Company's Annual Report in Form 10-KSB for
the fiscal year ended January 31, 1997. The following Management's Discussion
and Analysis of Financial Condition and Results of Operations should be read in
conjunction with the company's financial statements and notes thereto included
elsewhere in this Form 10-QSB and the above described factors set forth in the
Company's Form 10-KSB.
Any forward-looking statement speaks only as to the date on which such
statement is made, and the Company undertakes no obligation to update any
forward-looking statement or statements to reflect events or circumstances after
the date on which such statement is made or to reflect the occurrence of
unanticipated events. New factors emerge from time to time, and it is not
possible for management to predict all of such factors or the effect that any
such factor may have on the Company's business.
THREE MONTHS ENDED JULY 31, 1997 COMPARED TO THREE MONTHS ENDED JULY 31, 1996
REVENUES
Revenues for the three months ended July 31, 1997 increased 40.5%, to
$9.76 million, compared to $6.94 million for the same quarter a year ago. This
increase was due primarily to an increase in volume of fuel delivered, as well
as a modest increase in the average price per gallon of fuel sold. For the three
months ended July 31, 1997, the Company delivered 7.37 million gallons of fuel
compared to 5.41 million gallons for the same quarter of the prior year, an
increase of 36.2%. The increase in volume was attributable to an increase in
services to existing customers, acquisition of new customers in existing
locations and the introduction of mobile fueling operations into additional
metropolitan areas. The Company's revenue levels will fluctuate based on the
cost of fuel in a given period. The Company's sales price to its customers is
adjusted upward or downward for increases or decreases in fuel costs each week.
Significant changes in revenue levels between periods are possible even if the
volume of fuel delivered remains relatively stable.
GROSS PROFIT
Gross profit for the three months ended July 31, 1997 increased by
37.1%, to $850,000, compared to $620,000 for the same quarter a year ago. This
increase is primarily due to the higher volume of fuel delivered. Gross profit
did not increase at the same rate as revenues due to a modest decrease in
average service charges per gallon during the three months ended July 31, 1997
compared to the
10
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same quarter of the prior year. This decrease in average service charges per
gallon was due to fuel purchasing constraints, increases in driver payroll costs
associated with expansion into new markets and underutilization of certain
equipment in those markets. As a result of these factors and because the Company
sells fuel to its customers at a fixed service charge amount over its floating
wholesale costs, gross margin as a percentage of revenue for the three months
ended July 31, 1997 declined to 8.7% as compared to 8.9% for the three months
ended July 31, 1996.
OPERATING EXPENSES
Operating expenses for the three months ended July 31, 1997 increased
43.9%, to $937,000, compared to $651,000 for the same period a year ago. This
increase is primarily attributable to increases in payroll and related
administrative costs associated with additional personnel and facilities to
support the Company's expansion, as well as increases in insurance costs,
accounting and legal fees, financial consulting fees, debt guarantee fees and
other costs associated with being a public company. Other than insurance and
accounting fees, the Company did not incur these types of expenses prior to its
initial public offering in December 1996.
INTEREST EXPENSE
Interest expense for the three months ended July 31, 1997 decreased
18.8%, to $104,000, compared to $128,000 for the same quarter a year ago. This
decrease is the result of a reduction in the Company's outstanding borrowings
due to the repayment of a portion of its debt with a portion of the proceeds
from the initial public offering in December 1996.
INTEREST INCOME
Interest income for the three months ended July 31, 1997 increased to
$43,000, compared to $6,000 for the same quarter a year ago. This increase is
primarily due to increases in cash equivalents held by the Company. The invested
funds represent the remaining portion of the cash raised in the Company's
initial public offering in December 1996.
INCOME TAXES
The Company recognized an income tax benefit of $46,000, representing
an effective tax benefit rate of 31.0%, for the three months ended July 31,
1997, compared to $55,000, representing an effective tax benefit rate of 36.0%,
for the same period a year ago. The decrease in the tax benefit is a result of
lower operating losses and changes in the Company's estimate of its effective
tax benefit rate. The current effective tax benefit rate reflects the Company's
best estimate of its annual tax rate for the current fiscal year.
NET LOSS
Net loss for the three months ended July 31, 1997 was $102,000 or $.04
per share, compared to $97,000 or $.06 per share for the three months ended July
31, 1996. The increase in net loss is due to the combination of factors
discussed above. The weighted average number of shares outstanding for the
period increased to 2,575,000 from 1,500,000 for the same period of the prior
year due to the completion of the initial public offering in December 1996.
11
<PAGE>
SIX MONTHS ENDED JULY 31, 1997 COMPARED TO SIX MONTHS ENDED JULY 31, 1996
REVENUES
Revenues for the six months ended July 31, 1997 increased 42.2%, to
$19.75 million, compared to $13.89 million for the same period a year ago. This
increase was due primarily to an increase in volume of fuel delivered as well as
a modest increase in the average price per gallon of fuel sold. For the six
months ended July 31, 1997, the Company delivered 14.67 million gallons of fuel,
compared to 10.64 million gallons for the same period of the prior year, an
increase of 37.9%. The increase in volume was attributable to an increase in
services to existing customers, acquisition of new customers in existing
locations and the introduction of mobile fueling operations into additional
metropolitan areas. The Company's revenue levels will fluctuate based on the
cost of fuel in a given period. The Company's sales price to its customers is
adjusted upward or downward for increases or decreases in fuel costs each week.
Significant changes in revenue levels between periods are possible even if the
volume of fuel delivered remains relatively stable.
GROSS PROFIT
Gross profit for the six months ended July 31, 1997 increased 29.2%, to
$1.46 million, compared to $1.13 million for the same period a year ago. This
increase is primarily due to the higher volume of fuel delivered as discussed
above. Gross profit did not increase at the same rate as revenues due to a
decrease in average service charges per gallon during the six months ended July
31, 1997 compared to the same period of the prior year. This decrease in service
charges per gallon was due to fuel purchasing constraints, increases in driver
payroll costs associated with expansion into new markets and underutilization of
certain equipment in those markets. As a result of these offsetting factors, and
because the Company sells fuel to its customers at fixed service charge amounts
over floating wholesale costs, gross margin as a percentage of revenue for the
six months ended July 31, 1997 declined to 7.4% as compared to 8.1% for the six
months ended July 31, 1996.
OPERATING EXPENSES
Operating expenses for the six months ended July 31, 1997 increased
46.8%, to $1.82 million, compared to $1.24 million for the same period a year
ago. This increase is primarily attributable to increases in payroll and related
administrative costs associated with additional personnel and facilities to
support the Company's expansion, as well as debt increases in insurance costs,
accounting and legal fees, financial consulting fees, guarantee fees and other
costs associated with being a public company. Other than insurance and
accounting fees, the Company did not incur these types of expenses prior to its
initial public offering in December 1996.
INTEREST EXPENSE
Interest expense for the six months ended July 31, 1997 decreased
26.9%, to $190,000, compared to $260,000 for the same period a year ago. This
decrease is the result of a reduction in the Company's outstanding borrowings
due to the repayment of a portion of its debt with a portion of the proceeds
from the initial public offering in December 1996.
12
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INTEREST INCOME
Interest income for the six months ended July 31, 1997 increased to
$79,000, compared to $6,400 for the same period a year ago. This increase is
primarily due to increases in cash equivalents held by the Company. The invested
funds represent the remaining portion of the cash raised in the Company's
initial public offering in December 1996.
INCOME TAXES
The Company recognized an income tax benefit of $158,000, representing
an effective tax benefit rate of 33.7%, for the six months ended July 31, 1997,
compared to $134,000, representing an effective tax benefit rate of 36.0%, for
the same period a year ago. The increase in the tax benefit of is a result of
increased operating losses. The current effective tax benefit rate reflects the
Company's best estimate of the its annual tax rate for the current fiscal year.
NET LOSS
Net loss for the six months ended July 31, 1997 was $311,000 or $.12
per share, compared to $237,000 or $.16 per share for the six months ended July
31, 1996. The increase in the net loss is due to the combination of factors
discussed above. The weighted average number of shares outstanding for the
period increased to 2,575,000 from 1,500,000 for the same period of the prior
year due to the completion of the initial public offering in December 1996.
LIQUIDITY AND CAPITAL RESOURCES
The Company's business requires it to expend considerable amounts of
funds for fuel, labor and equipment costs before any payments are received from
the Company's customers. The fuel purchased by the Company for resale to its
customers must generally be paid for within 10 to 15 days of purchase, labor
costs and related taxes are funded bi-weekly and equipment related costs are
generally satisfied within 30 days. The Company bills its customers weekly and
generally collects its accounts within 35 to 40 days. Days sales outstanding at
July 31, 1997 totaled 36.5 days as compared to 41.7 days sales outstanding at
July 31, 1996.
Continued revenue growth for the Company is dependent on its ability to
obtain necessary working capital from bank borrowings, equity transactions and
retained earnings in order to fund increases in accounts receivable and provide
the funds necessary to acquire additional custom fuel delivery trucks. To date,
the Company has relied on bank borrowings and equity transactions to finance its
growth. At July 31, 1997, the Company had $212,000 of availability under its
$2.7 million line of credit and $1.9 million of cash and cash equivalents. The
Company intends to seek the additional working capital it needs to finance its
growth by a combination of vendor financing, expansion of its existing credit
facility, and the use of its cash and cash equivalents on hand. While the
Company believes it can successfully obtain additional vendor and bank financing
to finance its growth, there is no assurance that any such financing can be
obtained or will be obtained on terms acceptable to the Company. The Company
anticipates, based on its current revenue levels, that its existing cash and
cash equivalents as well as existing lines of credit will be adequate to meet
its needs for working capital and capital expenditures for at least the next
twelve months.
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The Company has outstanding borrowings of $2,488,000 as of July 31,
1997 under its $2.7 million line of credit. Interest is payable monthly at 1.5%
over the prime rate (10.0% as of July 31, 1997). The line of credit matures in
September 1997 and is secured by substantially all of the Company's assets. The
Company is currently seeking a commitment from its current lender for a renewal
and extension of the $2.7 million credit facility. If the new credit facility is
not obtained, the Company intends to seek an alternative lender or seek an
extension of the loan which matures on September 30, 1997.
Borrowings under the line of credit, certain long-term debt and capital
lease obligations are personally guaranteed by the Company's Chief Executive
Officer and sole shareholder of Enterprises. The credit agreement contains
customary covenants such as the maintenance of certain financial ratios and
minimum net worth and working capital requirements. As of July 31, 1997,
management believes the Company was in compliance with these financial covenants
and restrictions.
Custom fuel trucks are ordered in advance of need and require a minimal
down payment with the balance due upon delivery. It is expected that this
balance will be funded through a combination of available cash and vendor
financing. In the past, the Company has financed approximately 85% to 95% of the
purchase price of fuel trucks. The Company is unable to estimate the amount of
cash required for the acquisition of fuel trucks as such amount is dependent
upon the terms and conditions of financing available, if any, to the Company at
the time of delivery. At July 31, 1997, the Company had purchase commitments for
10 custom fuel delivery vehicles aggregating approximately $1.6 million.
A significant portion of the Company's outstanding debt bears interest
at variable interest rates. The Company's financial results will be impacted by
significant increases or decreases in interest rates.
In February 1997, The Financial Accounting Standards Board issued SFAS
No. 128, "Earnings Per Share" which requires adoption for periods ending after
December 15, 1997. SFAS No. 128 simplifies the accounting for earnings per share
by requiring the presentation of basic earnings per share including only
outstanding common stock and diluted earnings per share including the effect of
dilutive common stock equivalents. The Company's basic and diluted earnings per
share are the same since the Company's common stock equivalents are
antidilutive. In addition, the Company's basic and diluted earnings per share
are the same as that computed under APB Opinion No. 15, "Earnings Per Share," as
presented in the accompanying consolidated statements of operations. SFAS No.
128 must be adopted for periods ending after December 15, 1997 and be
retroactively reflected in the financial statements.
14
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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
The company held its Annual Shareholders Meeting on June 30, 1997. The issues
submitted to a vote of the security holders and the results of the voting are as
follows:
1) Election of five directors
FOR AGAINST ABSTAIN
--- ------- -------
Stanley H. Streicher 2,351,879 18,863 2,340
E. Scott Golden 2,351,879 18,863 2,340
Joseph M. Murphy 2,351,879 18,863 2,340
John H. O'Neil, Jr. 2,351,879 18,863 2,340
L. Phillips Reames 2,351,879 18,863 2,340
2) To consider and vote upon a proposal to approve the Company's Stock Option
Plan
FOR AGAINST ABSTAIN
--- ------- -------
1,495,672 56,538 11,700
ITEM 5
OTHER INFORMATION
None.
15
<PAGE>
ITEM 6
EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: 27 Financial Data Schedule
(b) Reports on Form 8-K:
No reports on Form 8-K were filed by the company during the three
months ended July 31, 1997.
16
<PAGE>
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 hereunto duly authorized.
STREICHER MOBILE FUELING, INC.
September 12, 1997 By: /s/ STANLEY H. STREICHER
------------------------
Stanley H. Streicher, President
and Chief Executive Officer
September 12, 1997 By: /s/ WALTER B. BARRETT
---------------------
Walter B. Barrett, Vice President, Finance
and Chief Financial Officer
17
<PAGE>
EXHIBIT INDEX
EXHIBIT PAGE
- ------- ----
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> FEB-01-1997
<PERIOD-END> JUL-31-1997
<CASH> 2,028,797
<SECURITIES> 0
<RECEIVABLES> 4,165,378
<ALLOWANCES> (67,731)
<INVENTORY> 78,952
<CURRENT-ASSETS> 6,401,516
<PP&E> 5,768,606
<DEPRECIATION> (1,157,608)
<TOTAL-ASSETS> 11,513,692
<CURRENT-LIABILITIES> 5,571,374
<BONDS> 0
0
0
<COMMON> 25,750
<OTHER-SE> 4,624,648
<TOTAL-LIABILITY-AND-EQUITY> 11,513,692
<SALES> 19,745,950
<TOTAL-REVENUES> 19,745,950
<CGS> 18,286,377
<TOTAL-COSTS> 18,286,377
<OTHER-EXPENSES> 1,738,436
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 190,152
<INCOME-PRETAX> (469,015)
<INCOME-TAX> 158,000
<INCOME-CONTINUING> (311,015)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (311,015)
<EPS-PRIMARY> (0.12)
<EPS-DILUTED> (0.12)
</TABLE>
