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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report (date of earliest event reported):
January 30, 1998
ENERGYSOUTH, INC.
(Successor to Mobile Gas Service Corporation)
(exact name of registrant as specified in its charter)
Commission File No.: 0-234
Alabama 58-2358943
(State of Incorporation) (I.R.S. Employer Identification No.)
2828 Dauphin Street
Mobile, Alabama 36606
(Address of Principal executive offices)
Registrant's Telephone Number
Including Area Code: (334) 450-4774
Exhibit Index at page 4
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Item 5. Other Events
At the 1998 Annual Meeting of Stockholders of Mobile Gas Service Corporation
("Mobile Gas") held on January 30, 1998 (the "Mobile Gas Annual Meeting"), the
stockholders of Mobile Gas approved an Agreement and Plan of Merger ("Merger
Agreement") as part of a reorganization of Mobile Gas into a holding company
structure (the "Reorganization"). As described in the Proxy Statement of Mobile
Gas and Prospectus of EnergySouth, Inc. ("EnergySouth") dated December 12, 1997
(the "Proxy Statement/Prospectus"), the Merger Agreement provided for a merger
(the "Merger"), which became effective at 12:01 a.m. on February 2, 1998 (the
"Effective Time"), pursuant to which the holders of shares of Mobile Gas common
stock outstanding at the Effective Time automatically became holders of shares
of common stock of EnergySouth, the successor issuer to Mobile Gas, with each
two shares of Mobile Gas common stock outstanding at the Effective Time being
converted into three shares of EnergySouth common stock, $.01 par value per
share ("EnergySouth Common Stock"). As a result of the Merger, EnergySouth
became the holding company for Mobile Gas.
The shares of EnergySouth Common Stock issued pursuant to the Merger were
registered under the Securities Act of 1933 pursuant to EnergySouth's
Registration Statement on Form S-4 (No.333-42057, filed December 12, 1997).
Reference is made to the Proxy Statement/Prospectus included in such
Registration Statement for additional information regarding the Reorganization,
including a description of EnergySouth Common Stock.
Pursuant to Rule 12(g)-3(a) of the Securities Exchange Act of 1934
("Exchange Act"), EnergySouth Common Stock is deemed to be registered under
Section 12(g) of the Exchange Act. EnergySouth Common Stock will commence
trading on the NASDAQ Stock Market on February 2, 1998.
The Merger Agreement and Reorganization were approved by the following
vote:
For Against Abstain
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2,508,700 9,084 21,877
In addition, at the Mobile Gas Annual Meeting, the following nominees were
reelected by Mobile Gas stockholders as directors of Mobile Gas, to serve until
the 2001 Annual Meeting of Stockholders of Mobile Gas by the votes indicated:
Nominee For Withheld
- - ------- --- --------
2
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John S. Davis 3,080,035 15,369
Walter L. Hovell 3,077,145 16,758
G. Montgomery Mitchell 3,078,342 15,561
F. B. Muhlfeld 3,076,991 16,712
The terms of office of the other Directors of Mobile Gas will continue
after the 1998 Annual Meeting of Stockholders of Mobile Gas as follows:
Messrs. John C. Hope, III, S. Felton Mitchell, Jr., and Thomas B. Van Antwerp
will serve until the Annual Meeting of Stockholders of Mobile Gas in 2000, and
Messrs. William J. Hearin, Joseph G. Hollis, Jr., Gaylord C. Lyon, and E. B.
Peebles, Jr. will serve until the Annual Meeting of Stockholders of Mobile Gas
in 1999. Pursuant to the Merger Agreement, each of the persons serving as a
director of Mobile Gas also serves as a director of EnergySouth, for the same
terms as set forth above with respect to his service as a director of Mobile
Gas.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(c) Exhibits.
Exhibit 99.1 Press Release dated January 30, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant duly caused this Report to be signed on its behalf by the undersigned
hereto duly authorized.
MOBILE GAS SERVICE
CORPORATION
February 2, 1998 By /s/ G. Edgar Downing, Jr.
------------------------------
G. Edgar Downing, Jr.
Secretary
3
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EXHIBIT INDEX
Page
Exhibit No. Description Number
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99.1 Press Release dated January 30, 1998 5
4
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EXHIBIT 99.1
[MOBILE GAS SERVICE CORPORATION LETTERHEAD]
January 30, 1998
Release: Immediately Contact: Edgar Downing 334-450-4772
MOBILE, AL--Stockholders of Mobile Gas Service Corporation approved a new
holding company structure for Mobile Gas at its 1998 Annual Meeting of
Stockholders today. Officials of Mobile Gas and the new holding company,
EnergySouth, Inc., said Mobile Gas stockholders will automatically become
stockholders of EnergySouth on February 2, 1998, and Mobile Gas will then
become a wholly-owned subsidiary of EnergySouth. Mobile Gas stockholders will
receive three shares of EnergySouth common stock for each two shares of Mobile
Gas common stock.
Company officials said they are pleased with stockholder response to the
holding company proposal, saying over 77% of the Company's shareholders voted
in favor of the new holding company.
"This new holding company structure will give us the flexibility we need
to maintain the Company's leadership in the energy industry, and will make it
easier for us to expand geographically," said John S. Davis, President and
Chief Executive Officer of Mobile Gas and of EnergySouth. "It will also give
us a greater opportunity to generate earnings growth, thereby enhancing
shareholder value."
The Company said that Mobile Gas Service Corporation common stock
(NASD:MBLE) will cease to be publicly traded at the close of the business day
on Friday, January 30, 1998. Effective Monday, February 2, 1998, shares of
common stock of EnergySouth, Inc. (NASD:ENSI) will be publicly traded. Company
official said Mobile
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Gas stockholders will be receiving letters of transmittal to be used to send
existing Mobile Gas stock certificates to be exchanged for new EnergySouth
common stock certificates. Company officials reminded stockholders that it will
be important for stockholders to submit their Mobile Gas certificates promptly,
because stockholders won't receive future dividends on EnergySouth stock until
their Mobile Gas certificates have been sent in to be exchanged for new
EnergySouth stock certificates.
Other business conducted at the shareholders meeting included the
re-election of John S. Davis, Walter L. Hovell, F.B. Muhlfeld, and G.
Montgomery Mitchell to the Board of Directors for three year terms.
In the EnergySouth Board of Directors meeting immediately following the
shareholders meeting, the Board of EnergySouth declared a dividend of $.20 cents
per share made payable April 1 to shareholders of record March 16. This amount
is consistent with prior Mobile Gas dividends and takes into account the 3 for
2 conversion of Mobile Gas Service Corporation stock into EnergySouth stock.
Net income for Mobile Gas Service Corporation during the three months
ended December 31, 1997 was $1,989,000 or $.61 per share as compared to net
income of $2,038,000 or $.63 per share for the quarter ended December 31, 1996.
Net income for the twelve months ended December 31, 1997 and 1996 was
$8,076,000 or $2.47 per share and $8,865,000 or $2.74 per share, respectively.
In December 1996, the State of Alabama approved the Company's claim for
refund of a business license tax. With this approval the Company recorded a
reduction in other taxes that had been previously recorded, resulting in an
increase of $.05 per share for the three months and twelve months ended
December 31, 1996. The decrease in
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earnings for the latest quarter compared to the prior year period is due to
this 1996 reduction in other taxes and is partially offset by an increase in
1997 revenues from storage activities and increased volumes transported to
industrial customers. Weather does not affect the comparison of the quarterly
earnings since the Company's temperature rate adjustment factor was in effect
during both quarters. This adjustment factor is designed to level out the
effects of temperature extremes on Company earnings.
The effect of weather is a factor, however, in comparing earnings per
share to the prior year for the twelve months ended December 31, 1997, since
the adjustment factor did not go into effect until November 1996. While
earnings for the 1997 calendar year do not reflect any impact of warmer than
normal weather, weather for the twelve month period ended December 31, 1996 was
20% colder than normal, resulting in a $.40 per share increase in earnings.
After considering the impact of weather during 1996, earnings during the 1997
calendar year increased as a result of additional volumes transported to
industrial customers, an increase in revenue from new natural gas storage
contracts and a decrease in operations and maintenance expenses. Again, this
increase was slightly offset by the reduction of other tax expenses in December
1996 as discussed above.
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MOBILE GAS SERVICE CORPORATION
FINANCIAL RESULTS
(in thousands, except per share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED DECEMBER 31, 1997 1996
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<S> <C> <C>
Operating Revenues $ 20,074 $ 17,961
Net Income $ 1,989 $ 2,038
Earnings Per Common Share:
Basic $ 0.61 $ 0.63
Diluted $ 0.61 $ 0.63
</TABLE>
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED DECEMBER 31, 1997 1996
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<S> <C> <C>
Operating Revenues $ 74,787 $ 72,520
Net Income $ 8,076 $ 8,865
Earnings Per Common Share:
Basic $ 2.50 $ 2.75
Diluted $ 2.47 $ 2.74
</TABLE>
NOTE: Statement of Financial Accounting Standards No. 128, "Earnings Per
Share" (SFAS 128), effective for reporting periods ending after December 15,
1997, establishes standards for computing and presenting earnings per share.
SFAS 128 requires presentation of both basic and diluted earnings per share on
the face of the income statement. Accordingly, these amounts are disclosed in
this earnings release.
