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 OCTOBER 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 December 12, 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
<S> <C>
Item 1. Financial Statements (Unaudited)
Balance Sheets as of
October 31, 1997 and January 31, 1997..............................3-4
Statements of Operations for the Three and
Nine month periods ended October 31, 1997 and 1996...................5
Statements of Cash Flows for the Nine
month periods ended October 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..............................10-15
Part II-Other Information
Items 1-6. ....................................................................16
Signature Page .................................................................17
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STREICHER MOBILE FUELING, INC.
UNAUDITED BALANCE SHEETS
PART 1
ITEM 1
OCTOBER 31, JANUARY 31,
ASSETS 1997 1997
------ ----------- -----------
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Current Assets:
Cash and cash equivalents $1,074,746 $ 2,848,000
Investments (Note 7) 68,105 115,751
Accounts receivable, net of allowance for doubtful
accounts of $119,000 and $86,000, respectively 5,014,605 4,352,761
Inventories 99,091 76,961
Prepaid expenses and other 362,238 254,548
----------- ------------
Total current assets 6,618,785 7,648,021
Property and Equipment:
Fuel trucks and automobiles 5,259,023 3,586,670
Machinery and equipment 491,062 456,668
Furniture and fixtures 469,254 285,233
Construction in process 260,001 6,282
----------- ------------
6,479,340 4,334,853
Less accumulated depreciation (1,224,179) (966,074)
----------- ------------
5,255,161 3,368,779
Deferred income tax assets (Note 3) 244,848 --
Note receivable from related party (Note 6) 360,339 319,043
Other assets 72,431 67,127
----------- ------------
Total assets $12,551,564 $11,402,970
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STREICHER MOBILE FUELING, INC.
UNAUDITED BALANCE SHEETS
(CONTINUED)
OCTOBER 31, JANUARY 31,
LIABILITIES AND SHAREHOLDERS' EQUITY 1997 1997
- ------------------------------------ ----------- -----------
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Current Liabilities:
Bank line of credit payable 2,614,140 $ 1,404,469
Current portion of long-term debt 910,715 740,852
Accounts payable 1,953,429 2,411,031
Accrued expenses 271,224 426,818
Customer deposits 160,170 169,670
---------- -----------
Total current liabilities 5,909,678 5,152,840
Long-term Liabilities:
Long-term debt, excluding current portion 1,994,808 1,123,498
Deferred income taxes (Note 3) -- 165,219
---------- -----------
Total liabilities 7,904,486 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
Accumulated deficit (599,430) (304,832)
---------- -----------
Total shareholders' equity 4,647,078 4,961,413
---------- -----------
Total liabilities and shareholders' equity $12,551,564 $11,402,970
=========== ===========
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The accompanying notes are an integral part of these financial statements.
4
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STREICHER MOBILE FUELING, INC.
UNAUDITED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTH PERIODS
ENDED OCTOBER 31, 1997 AND 1996
THREE MONTH PERIOD NINE MONTH PERIOD
ENDED OCTOBER 31, ENDED OCTOBER 31,
------------------------ ----------------------------
1997 1996 1997 1996
----------- ------------- ----------- -----------
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Fuel and service charge revenue $8,244,646 $6,285,960 $21,687,284 $16,607,815
Fuel taxes 3,590,358 2,724,000 9,893,670 6,290,000
----------- ----------- ----------- -----------
Total revenues 11,835,004 9,009,960 31,580,954 22,897,815
Cost of fuel and delivery expenses 7,370,761 5,634,580 19,292,166 14,829,509
Fuel taxes 3,590,358 2,724,000 9,893,670 6,290,000
----------- ----------- ---------- -----------
Total cost of sales 10,961,119 8,358,580 29,185,836 21,119,509
Gross profit 873,885 651,380 2,395,118 1,778,306
Operating expenses 799,744 664,689 2,678,952 1,909,082
----------- ----------- ---------- -----------
Operating income (loss) 74,141 (13,309) (283,834) (130,776)
Interest expense (128,479) (93,584) (318,631) (353,836)
Interest income 31,195 2,357 110,307 8,744
Other income 44,621 -- 44,621 --
----------- ----------- ---------- -----------
Income (loss) before income taxes 21,478 (104,536) (447,537) (475,868)
Income tax benefit (expense) (5,061) 42,717 152,939 176,568
----------- ----------- ---------- -----------
Net income (loss) $ 16,417 $ (61,819) $ (294,598) $ (299,300)
============ ========== ============ ============
Earnings (loss) per share $ .01 $ (.04) $ (.11) $ (.20)
============ ========== ============ ============
Weighted average common shares
outstanding 2,575,000 1,500,000 2,575,000 1,500,000
============= ========== ============ ============
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The accompanying notes are an integral part of these financial statements
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STREICHER MOBILE FUELING, INC.
UNAUDITED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTH PERIODS ENDED OCTOBER 31, 1997 AND 1996
1997 1996
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (294,598) $ (299,300)
Adjustments to reconcile net loss to
net cash used in operating activities:
(Gain) loss on disposal of equipment (133) 5,928
Gain on sale of investments (44,621) --
Depreciation and amortization 362,636 293,621
Deferred income tax benefit (152,939) (150,000)
Provision for doubtful accounts 35,000 --
Changes in operating assets and liabilities:
Accounts receivable (696,844) (1,497,400)
Inventories (22,130) (4,427)
Prepaid expenses and other (107,690) (17,360)
Note receivable from related party (41,296) (122,011)
Deferred income tax asset (257,128) --
Other assets (5,304) (301,261)
Accounts payable and accrued expenses (613,196) 1,167,808
Customer deposits (9,500) (3,970)
---------- -----------
NET CASH USED IN OPERATING ACTIVITIES (1,847,743) (928,372)
----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of investment 74,933 108,720
Purchase of investment (2,403) --
Purchases of property and equipment (2,248,885) (524,358)
Proceeds from disposal of equipment -- 54,757
---------- -----------
NET CASH USED IN INVESTING ACTIVITIES (2,176,355) (360,881)
---------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under line of credit 1,209,671 897,205
Borrowings under long-term debt 1,646,867 1,448,720
Principal payments on long-term debt (605,694) (1,055,949)
Principal payments on capital lease obligations -- (134,335)
---------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 2,250,844 1,155,641
---------- -----------
DECREASE IN CASH AND CASH EQUIVALENTS (1,773,254) (133,612)
---------- -----------
CASH AND CASH EQUIVALENTS, beginning of period 2,848,000 189,508
---------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 1,074,746 $ 55,896
============ =============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the period for:
Interest $ 300,640 $ 363,710
============ =============
Income taxes $ 5,061 85,256
============ =============
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The accompanying notes are an integral part of these financial statements.
6
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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 October 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.
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(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 of differences between the tax basis of
assets and liabilities and the amounts recorded for financial reporting
purposes. Income taxes for the periods ended October 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 assets consist primarily of
the tax effect of a higher asset basis on certain assets for income tax
purposes, and 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 believes it is
more likely than not that all of the net operating loss and alternative minimum
tax carryforwards will be realized.
(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 20 custom fuel trucks for
use in the Company's operations with an aggregate cost of approximately $2.6
million. These units will be delivered at the rate of two or three units per
month beginning in October 1997.
(6) RELATED PARTY TRANSACTION
As of October 31, 1997, the Company had a note receivable from Enterprises
amounting to $360,339, 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. In December 1997,
Enterprises repaid $112,000 of the outstanding balance.
(7) INVESTMENTS
At October 31, 1997, a certificate of deposit amounting to $ 68,150 is
restricted as to withdrawal since it serves as collateral for a loan made to the
Company.
(8) 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
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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
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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 tenth 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 OCTOBER 31, 1997 COMPARED TO THREE MONTHS ENDED OCTOBER 31,
1996
REVENUES
Revenues for the three months ended October 31, 1997 increased 31.1% to
$11.8 million, compared to $9.0 million for the same quarter a year ago. This
increase was due primarily to an increase in volume of fuel delivered, offset by
decreases in the average price per gallon of fuel sold. For the three months
ended October 31, 1997, the Company delivered 9.0 million gallons of fuel
compared to 6.2 million gallons for the same quarter of the prior year, an
increase of 45.2%. 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 October 31, 1997 increased by 34.3%,
to $874,000, compared to $651,000 for the same quarter a year ago. This increase
is primarily due to the higher
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volume of fuel delivered. Gross profit increased at a slightly higher rate than
revenues due to a modest increase in average service charges per gallon during
the three months ended October 31, 1997 compared to the same quarter of the
prior year. This increase in average service charges per gallon was due to some
price increases, partially offset by fuel purchasing constraints, increases in
driver payroll costs associated with expansion into new markets and
underutilization of certain equipment in some 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 October 31, 1997 increased to 7.4% as
compared to 7.2% for the three months ended October 31, 1996.
OPERATING EXPENSES
Operating expenses for the three months ended October 31, 1997 increased
20.3%, to $800,000, compared to $665,000 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, 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 October 31, 1997 increased
36.2%, to $128,000, compared to $94,000 for the same quarter a year ago. This
increase is a result of increases in the Company's outstanding borrowings due to
the purchase of additional equipment to support its expansion.
INTEREST INCOME
Interest income for the three months ended October 31, 1997 increased to
$31,000, compared to $2,000 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 net proceeds of the Company's
initial public offering in December 1996.
OTHER INCOME
Other income for the three months ended October 31, 1997 consisted of a gain
on the sale of an equity investment.
INCOME TAXES
The Company recognized income tax expense of $5,000, representing an
effective tax rate of 23.4%, for the three months ended October 31, 1997,
compared to a benefit of $43,000, representing an effective tax benefit rate of
40.9%, for the same period a year ago. The elimination of the tax benefit in the
current quarter resulted from the Company's achieving a profit for the quarter.
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NET INCOME (LOSS)
Net income for the three months ended October 31, 1997 was $16,000 or $.01
per share, compared to a net loss of $62,000 or $.04 per share for the three
months ended October 31, 1996. The profit achieved 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.
NINE MONTHS ENDED OCTOBER 31, 1997 COMPARED TO NINE MONTHS ENDED OCTOBER 31,
1996
REVENUES
Revenues for the nine months ended October 31, 1997 increased 38.0%, to
$31.6 million, compared to $22.9 million for the same period a year ago. This
increase was due primarily to an increase in volume of fuel delivered, offset by
decreases in the average price per gallon of fuel sold. For the nine months
ended October 31, 1997, the Company delivered 23.7 million gallons of fuel,
compared to 16.8 million gallons for the same period of the prior year, an
increase of 41.1%. 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 nine months ended October 31, 1997 increased 33.3%, to
$2.4 million, compared to $1.8 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
modest decrease in average service charges per gallon during the nine months
ended October 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, offset by some price
increases in the third quarter of 1998 fiscal year. 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 nine months ended October 31, 1997 declined to
7.6% as compared to 7.8% for the nine months ended October 31, 1996.
OPERATING EXPENSES
Operating expenses for the nine months ended October 31, 1997 increased
42.1%, to $2.7 million, compared to $1.9 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
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to support the Company's expansion, 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 nine months ended October 31, 1997 decreased 9.9%,
to $319,000, compared to $354,000 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, partially offset by additional
borrowings on new equipment purchases.
INTEREST INCOME
Interest income for the nine months ended October 31, 1997 increased to
$110,000, compared to $8,700 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.
OTHER INCOME
Other income for the nine months ended October 31, 1997 consisted of a gain
on the sale of an equity investment.
INCOME TAXES
The Company recognized an income tax benefit of $153,000, representing an
effective tax benefit rate of 34.2%, for the nine months ended October 31, 1997,
compared to $177,000, representing an effective tax benefit rate of 37.2%, for
the same period a year ago. The decrease in tax benefit is primarily due to
decreased 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 nine months ended October 31, 1997 was $295,000 or $.11 per
share, compared to $299,000 or $.20 per share for the nine months ended October
31, 1996. The decrease 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
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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 October 31, 1997 totaled 37 days
as compared to 35 days sales outstanding at October 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 sales of equity securities to
finance its growth. At October 31, 1997, the Company had $86,000 of availability
under its $2.7 million line of credit and $1.1 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.
The Company has outstanding borrowings of $2,614,000 as of October 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 October 31, 1997). The line of credit matures on
December 31, 1997 and is secured by substantially all of the Company's assets.
Borrowings under the existing 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 October 31, 1997,
management believes the Company was in compliance with these financial covenants
and restrictions.
The Company has received a commitment from its current lender for a new $5.0
million dollar working capital line of credit. Interest will be paid monthly at
3/4% over the prime interest rate. The new line will mature in October 1999,
will be secured by substantially all of the Company's assets, and will contain
various covenants regarding the maintenance of certain financial ratios, minimum
net worth and working capital levels. The new line of Credit will not be
guaranteed by the Company's Chief Executive Officer.
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 October 31, 1997, the Company had purchase commitments for 20
custom fuel delivery vehicles aggregating approximately $2.6 million.
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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.
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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
None.
ITEM 5
OTHER INFORMATION
None.
ITEM 6
EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: None
(b) Reports on Form 8-K:
No reports on Form 8-K were filed by the company during the three
months ended October 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.
December 12, 1997 By: /S/ STANLEY H. STREICHER
------------------------
Stanley H. Streicher, President
and Chief Executive Officer
December 12, 1997 By: /S/ WALTER B. BARRETT
---------------------
Walter B. Barrett, Vice President, Finance
and Chief Financial Officer
17
<PAGE>
EXHIBIT INDEX
27.0 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> OCT-31-1997
<CASH> 1,142,851
<SECURITIES> 0
<RECEIVABLES> 5,133,605
<ALLOWANCES> (119,000)
<INVENTORY> 99,091
<CURRENT-ASSETS> 6,618,785
<PP&E> 6,479,340
<DEPRECIATION> (1,224,179)
<TOTAL-ASSETS> 12,551,564
<CURRENT-LIABILITIES> 5,909,678
<BONDS> 0
0
0
<COMMON> 25,750
<OTHER-SE> 4,621,328
<TOTAL-LIABILITY-AND-EQUITY> 12,551,564
<SALES> 31,580,954
<TOTAL-REVENUES> 31,580,954
<CGS> 29,185,836
<TOTAL-COSTS> 29,185,836
<OTHER-EXPENSES> 2,524,024
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 318,631
<INCOME-PRETAX> (447,537)
<INCOME-TAX> 152,939
<INCOME-CONTINUING> (294,598)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (294,598)
<EPS-PRIMARY> (.11)
<EPS-DILUTED> (.11)
</TABLE>
