U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly period ended March 31, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from to
Commission File No. 0-3802
WESTERN STANDARD CORPORATION
----------------------------
(Exact Name of Registrant as Specified in its Charter)
WYOMING 83-0184378
- ------- ----------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
205 SOUTH BROADWAY, RIVERTON, WY 82501
- -------------------------------- -----
(address of principal executive offices)
307-856-9288
------------
(Issuer's telephone number)
UNCHANGED
---------
(Former name, former address and former fiscal year, if changed
since last report)
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 (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No _____.
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
9,965,015 common $0.05 par at December 31, 1998 and May 11, 1999.
PART 1, ITEM 1, 2 (1)(i)
FORM 10QSB
WESTERN STANDARD CORPORATION
Consolidated Balance Sheet
Unaudited
March 31, 1999
Current Assets:
Cash $ 507,798.74
Accounts Receivable 344,575.88
Allowance for Doubtful Accounts ( 17,153.14)
Notes receivable - officer 10,000.00
Inventory - at cost 43,946.03
---------------
Total Current Assets $ 889,167.51
---------------
Property & Equipment, Net of
Accumulated Depreciation,
Amortization and Depletion $ 8,302,444.96
---------------
Other Assets:
* Accounts Receivable - Snow King Resort
Center, Inc. and JH Spring Water $ 1,218,748.46
Allowance for collectibility ( 1,000,000.00)
Prepaid expenses 126,543.15
Prepaid loan fees 228,626.88
Investment in SKRCI 6,720.00
Leasehold Interest 34,270.84
Restricted Cash Reserves 41,770.14
Other 1,164.86
---------------
Total Other Assets $ 657,844.33
---------------
TOTAL ASSETS $ 9,849,456.80
===============
The Registrant also owns 12,000 shares of Class B Common stock in
Snow King Resort, Inc. at Zero Basis.
* This account receivable is from two new businesses; one is
approximately 49% owned by Western Standard Corporation and
operated by its subsidiary Snow King Resort, Inc. The other is
totally owned by Snow King Resort, Inc. This is not a short term
receivable.
PART 1, ITEM 1, 2 (1)(i)
FORM 10QSB
WESTERN STANDARD CORPORATION
Consolidated Balance Sheet
Unaudited
March 31, 1999
Liabilities:
Accounts Payable $ 462,528.39
Accounts Payable - Other 81,999.47
Portion of Long Term Debt
payable within one year 94,054.00
Advance Deposit 337,679.69
Accrued Expenses 484,397.01
---------------
Subtotal $ 1,460,658.56
Long Term Debt 8,065,292.77
Fee Payable - Officer 90,000.00
---------------
TOTAL LIABILITIES $ 9,615,951.33
===============
Minority Interest in Subsidiary
2,150 shares of Class A stock
in SKRI $ 2,020,784.88
---------------
STOCKHOLDERS INVESTMENT:
Common Stock, $0.05 par
value, 10,000,000 shares
authorized, 9,965,015
issued and outstanding
at March 31, 1998 $ 401,201.02
Capital in Excess of Par
Value 3,334,801.45
Accumulated Deficit ( 5,523,281.88)
---------------
Net Stockholders
Investment ($ 1,787,279.41)
---------------
TOTAL LIABILITIES AND CAPITAL $ 9,849,456.80
===============
PART 1, ITEM 1, 2 (1)(ii)
FORM 10QSB
WESTERN STANDARD CORPORATION
Consolidated Statement of Operations
Unaudited
Profit and Loss Information
For the Three (3) Months Ended
Mar. 31, 1999 Mar. 31, 1998
1. Gross sales less discounts,
returns and allowances $ 1,754,690.35 $ 2,258,464.77
2. Operating Revenues -0- -0-
3. Total of Captions 1 and 2 1,754,690.35 2,258,464.77
4. Costs and Expenses
(a) Operating Expenses 2,320,041.01 2,237,876.62
(b) Interest Expense 184,121.43 167,724.17
(c) Depreciation 165,000.00 156,400.00
Total Costs and Expenses 2,669,162.44 2,562,000.79
5. Income (Loss) before taxes
on income & extraordinary
items ( 914,472.09) ( 303,536.02)
6. Discontinued Operations -0- -0-
7. Provisions for taxes on
income -0- -0-
8. Income or (Loss) ( 914,472.09) ( 303,536.02)
9. Minority interest in
profit (loss) of
subsidiary ( 213,669.32) ( 69,936.39)
10. Income (Loss) before
extraordinary items ( 700,802.77) ( 233,599.63)
11. Extraordinary items,
income tax, benefit of
net operating loss
carryover and minority
share of tax -0- -0-
12. Net Income (Loss) ( 914,472.09) ( 233,599.63)
13. Earnings (Loss) per share:
($914,472.09) : 9,965,015
issued and outstanding (.09)
($233,599.63) : 9,965,015
issued and outstanding (.02)
14. Dividends per share -0- -0-
The results for interim periods are not necessarily indicative of
results to be expected for the year.
The information furnished for Western Standard Corporation reflects
adjustments which are, in the opinion of management, necessary to
a fair statement of the results for this interim period.
PART 1, ITEM 1, 2 (1)(iii)
FORM 10QSB
WESTERN STANDARD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
For the Three (3) Months Ended
Mar. 31, 1999 Mar. 31, 1998
INCREASE (DECREASE) IN CASH:
Cash flows from operating
activities:
Cash received from
customers $ 1,660,071.97 $ 2,056,983.45
Cash paid to suppliers
and employees ( 2,113,778.73) ( 1,961,490.20)
Interest paid ( 184,121.43) ( 167,724.17)
-------------- --------------
Net cash provided
(used) by operations ($ 637,828.19) ($ 72,230.92)
-------------- --------------
Cash flows from investing
activities:
Payment from officer $ 900.00 $ 900.00
Capital expenditures ( 572,592.43) ( 79,767.24)
Loan fees ( 181,781.88) -0-
Loans to/payments from Snow
King Center 42,408.00 70,730.86
Increase in restricted
cash ( 28,755.54) ( 25,702.86)
-------------- --------------
Net cash provided
(used) by investing
activities ($ 739,821.85) ($ 33,839.24)
-------------- --------------
Cash flows from financing
activities:
Borrowings $ 8,075,617.91 $ 105,253.00
Principal payments to
banks ( 6,410,585.87) ( 113,901.40)
-------------- --------------
Net cash provided
(used) by financing
activities $ 1,665,032.04 ($ 8,648.40)
-------------- --------------
Net increase (decrease) in
cash $ 287,382.00 ($ 114,718.56)
Cash at beginning of year 220,416.74 382,161.39
-------------- --------------
Cash at end of quarter $ 507,798.74 ($ 267,442.83)
============== ==============
RECONCILIATION OF NET INCOME
TO NET CASH USED BY OPERATING
ACTIVITIES:
Net income (loss) ($ 700,802.77) ($ 233,599.63)
Adjustments:
Depreciation and
amortization 165,354.00 162,484.00
Decrease in advance
deposits ( 58,622.53) ( 46,990.19)
Increase in accounts
receivable ( 121,333.75) ( 175,043.99)
Decrease in prepaid
expenses 54,585.18 63,332.82
Decrease (increase) in
inventories 3,113.07 ( 11,352.02)
(Decrease) increase in
accounts payable and
accrued expenses 206,834.56 218,321.62
Collection of Snow Devil
receivable and trail receivable 26,715.37 20,552.86
Allocation of Minority
Interest in profit
(loss) of subsidiary ( 213,669.32) ( 69,936.39)
-------------- --------------
Net cash provided by
operations ($ 637,828.19) ($ 72,230.92)
============== ==============
PART I, ITEM 1, 2 (2)
FORM 10QSB
WESTERN STANDARD CORPORATION
(ii) Material Subsequent Events and Contingencies
(iii) Significant Equity Investors
Six investors own approximately 23.57% of Snow King
Resort, Inc., a Western Standard Corporation sub-
sidiary.
(iv) Significant Disposition and Purchase Business
Combinations.
None
(v) Material accounting changes
None
PART I, Item 1, 2 (2)(iii)
Significant Equity Investors
Unaudited
January 1 to
Mar. 31, 1999
Sales $ 1,750,736.57
Gross Income $ 1,750,736.57
Net Income (Loss) from continuing operations ($ 906,530.85)
Less Minority Interest in profit or (loss) -
23.57% ($ 213,669.32)
Net Income (Loss) ($ 692,861.53)
The above figures are for Snow King Resort, Inc., a Western
Standard Corporation subsidiary. The Registrant owns approximately
76.43 percent of the outstanding Snow King Resort, Inc. voting
stock.
PART II
FORM 10QSB
WESTERN STANDARD CORPORATION
Other Information
1. Legal Proceedings.
At March 31, 1999, there were no lawsuits filed against either
Western Standard Corporation or Snow King Resort, Inc and
none threatened.
2. Change in Securities
None
3. Defaults upon senior securities.
None
4. Submission of matters to a vote of security holders.
None
5. Other information.
None
6. Exhibits and reports on Form 8-K.
(a) Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during this quarter.
303(b) 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations.
(a) ANALYSIS OF FINANCIAL CONDITION:
Heavy startup and operating costs at the Snow King Resort
Center have created a heavy drain on Snow King Resort's
cash flow. Snow King Resort, at times, has not had
sufficient cash flow to pay its creditors in a timely
manner. Snow conditions in Jackson were very good
for skiing during the winter of 1998-99. However, more
rooms available in Jackson and fewer people vacationing,
had an adverse effect on winter revenues. Summer
bookings are impressive.
On April 15, 1996, Snow King Resort, Inc. refinanced its
loan with ORIX USA at a fixed interest rate of 10 1/8% for
five years. Part of the proceeds were used to pay other
debt. The amount of the new loan was $6,150,000.
On March 23, 1999, Snow King Resort, Inc. closed a
refinancing loan in the amount of $9,370,000 with an
additional line of credit in the amount of $640,000.
At March 31, 1999, $7,734,590 had been drawn against
the $9,370,000 and $341,027 had been drawn against
the $640,000. A fixed interest rate of 7.98% applies
to the $9,370,000 mortgage. There are no principal
payments due for one year. The borrowing was to pay
off the previous mortgage, short term debts and for
refurbishing the Hotel. Refinancing costs, including
penalties for prepaying mortgage balances were
considerable and contribute immensely to the first
quarter net loss. Principal and interest payments on
loans are current.
Western Standard Corporation's entire interest in wells
#22-5 and #24-5 in the Kaye Field was sold in January,
1997 for $70,000 cash to Ensign Oil & Gas, Inc. to avoid
the expense of an attempt to water flood the field and
to avoid the loss of income from the wells while production
was stopped during the water flood attempt. Western
Standard Corporation would have been unable to contribute
its share of the water flood expense.
Western Standard Corporation, the parent company, will
have sufficient funds to cover its expenses during 1998
from cash reserves, oil and gas royalties, interest, and
accounts receivable.
(c) RESULTS OF OPERATIONS:
Net loss for the first three months of 1999 amounted to
$914,472, compared to a loss for the first three months
of 1998 in the amount of $233,599.
Profits and losses for the first three months of 1999 and
1998 came from:
SOURCE 1999 1998
--------- ---------
Western Standard Corporation ($ 8,913) ($ 6,793)
Snow King Resort, Inc. ( 906,531) ( 226,781)
Western Recreation Corporation 972 ( 25)
--------- ---------
( 914,472) ($ 233,599)
========= =========
FORM 10QSB
WESTERN STANDARD CORPORATION
SIGNATURE
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.
WESTERN STANDARD CORPORATION
----------------------------
(Registrant)
Dated: May 17, 1999 /s/ Stanford E. Clark
----------------------------
Stanford E. Clark, President
Treasurer
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<PAGE>
<ARTICLE> 5
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 507,798
<SECURITIES> 0
<RECEIVABLES> 344,576
<ALLOWANCES> 17,153
<INVENTORY> 43,946
<CURRENT-ASSETS> 889,167
<PP&E> 13,052,125
<DEPRECIATION> 4,749,630
<TOTAL-ASSETS> 9,849,457
<CURRENT-LIABILITIES> 1,460,658
<BONDS> 0
<COMMON> 401,201
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 9,849,457
<SALES> 1,754,690
<TOTAL-REVENUES> 1,754,690
<CGS> 0
<TOTAL-COSTS> 2,669,162
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,000,000
<INTEREST-EXPENSE> 184,121
<INCOME-PRETAX> (914,472)
<INCOME-TAX> 0
<INCOME-CONTINUING> (914,472)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (914,472)
<EPS-PRIMARY> 0
<EPS-DILUTED> (.09)
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