<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For quarter ended SEPTEMBER 30, 1995 Commission file number 1-467
-------------------------------
WILSHIRE OIL COMPANY OF TEXAS
- --------------------------------------------------------------------------------
(Exact name of registrants as specified in its charter)
Delaware 84-0513668
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
921 Bergen Avenue - Jersey City, New Jersey 07306-4204
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number - including area code (201) 420-2796
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NO CHANGE
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Former name, former address and former fiscal year,
if changed since last reports.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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
-- --
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the close of the period by this report.
Common Stock $1 Par Value -----9,588,354
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WILSHIRE OIL COMPANY OF TEXAS
INDEX
Page No.
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Part I Financial Information
Financial Information: 1
Consolidated Balance Sheets -
September 30, 1995 and December 31, 1994
Consolidated Statements of Operations - 2
Nine months ended September 30, 1995 and 1994
Consolidated Statements of Operations - 3
Three months ended September 30, 1995 and 1994
Consolidated Statements of Cash Flows - 4
Nine months ended September 30, 1995 and 1994
Notes to Consolidated Financial Statements 5
Management's Discussion and Analysis 6,7 & 8
of Financial Condition and Results
of Operations
Part II Other Information 9
<PAGE>
WILSHIRE OIL COMPANY OF TEXAS AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(000's Omitted, Except Share Data)
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
ASSETS 1995 1994
------------ ------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 1,199 $ 907
Accounts receivable 921 934
Marketable securities, at market value 33,602 29,989
Prepaid expenses and other current assets 620 450
-------- -------
Total current assets 36,342 32,280
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INVESTMENT IN PREFERRED STOCK OF
THE TRUST COMPANY OF NEW JERSEY 6,000 6,000
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PROPERTY AND EQUIPMENT
Oil and gas properties, using the
full cost method of accounting 130,112 127,880
Real estate properties 36,212 35,523
Other property and equipment 395 391
-------- -------
166,719 163,794
Less - Accumulated depreciation,
depletion and amortization 102,568 98,876
-------- -------
64,151 64,918
-------- -------
$106,493 $103,198
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-------- -------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 2,700 $ 2,484
Accounts payable 3,058 2,853
Accrued liabilities 545 626
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Total current liabilities 6,303 5,963
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LONG - TERM DEBT, less current portion 48,152 50,160
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DEFERRED INCOME TAXES 20,441 18,636
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COMMITMENTS AND CONTINGENCIES (Note 3)
SHAREHOLDERS' EQUITY
Common stock, $1 par value,
15,000,000 shares authorized;
issued 10,013,544
shares in 1995 and 1994 10,014 10,014
Capital in excess of par value 10,217 10,399
Unrealized gain on marketable securities
($20,655 in 1995 and $18,487 in 1994),
net of deferred income taxes 11,360 10,168
Retained earnings 5,010 2,822
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36,601 33,403
Less -
Treasury stock, 425,190 and 341,818
shares in 1995 and 1994, at cost 2,812 2,290
Cumulative foreign currency
translation adjustment 2,192 2,674
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31,597 28,439
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$106,493 $103,198
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-------- -------
</TABLE>
1
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WILSHIRE OIL COMPANY OF TEXAS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(000's Omitted, Except Share Data)
(Unaudited)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED
--------------------------
September 30, September 30,
1995 1994
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<S> <C> <C>
REVENUES
Oil & Gas $ 4,428 $ 6,222
Real Estate 6,403 5,814
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Total Revenues 10,831 12,036
COSTS AND EXPENSES
Oil and Gas Production Expenses 2,047 1,977
Real Estate Operating Expenses 3,593 3,267
Depreciation, depletion and amortization 3,402 3,795
General and Administrative 1,015 1,066
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Total Costs and Expenses 10,057 10,105
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Income from Operations 774 1,931
OTHER INCOME 528 392
GAIN ON SALES OF MARKETABLE
SECURITIES (Note 2) 5,946 5,457
INTEREST EXPENSE (3,123) (2,469)
------- --------
Income before provision
for income taxes 4,125 5,311
PROVISION FOR INCOME TAXES 1,274 1,791
--------- ---------
Net income $ 2,851 $ 3,520
-------- ---------
AVERAGE NUMBER OF SHARES OF
COMMON STOCK OUTSTANDING: 9,630,632 9,959,924
--------- ---------
INCOME PER COMMON SHARE $ .30 $ .35
--------- ---------
</TABLE>
2
<PAGE>
WILSHIRE OIL COMPANY OF TEXAS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(000's Omitted, Except Share Data)
(Unaudited)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
--------------------------
September 30, September 30,
1995 1994
------------- ------------
<S> <C> <C>
REVENUES
Oil & Gas $ 1,415 $ 2,201
Real Estate 2,164 2,029
--------- ----------
Total Revenues 3,579 4,230
COSTS AND EXPENSES
Oil and Gas Production Expenses 685 646
Real Estate Operating Expenses 1,221 1,193
Depreciation, depletion and amortization 1,325 1,382
General and Administrative 326 354
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Total Costs and Expenses 3,557 3,575
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Income from Operations 22 655
OTHER INCOME 200 211
GAIN ON SALES OF MARKETABLE
SECURITIES (Note 2) 1,046 1,646
INTEREST EXPENSE (1,012) (923)
------- --------
Income before provision
for income taxes 256 1,589
PROVISION FOR INCOME TAXES 39 638
------ ----------
Net income 217 $ 951
------ ----------
AVERAGE NUMBER OF SHARES OF
COMMON STOCK OUTSTANDING: 9,590,530 9,911,376
--------- ----------
INCOME PER COMMON SHARE $ .02 $ .10
---------- ----------
</TABLE>
3
<PAGE>
WILSHIRE OIL COMPANY OF TEXAS AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(000's Omitted)
(Unaudited)
<TABLE>
<CAPTION>
For The Nine Months Ended
----------------------------
September 30, September 30,
1995 1994
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 2,851 $ 3,520
Adjustments to reconcile net income to net
cash provided by operating activities -
Depreciation, depletion and amortization 3,402 3,795
Deferred income tax provision 874 1,143
Amortization (adjustment) of deferred and
unearned compensation in connection
with non-qualified stock option plan, net (182) (55)
Gain on sales of marketable securities (5,946) (5,457)
Foreign currency transactions - -
Changes in operating assets and liabilities -
(Increase) decrease in receivables 1,026 1,933
(Increase) in prepaid expenses and other
current assets 570 156
Increase (decrease) in accounts payable,
accrued and other liabilities (288) 1,360
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Net cash provided by (used in)
operating activities $ 2,307 $ 6,395
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CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures, net (2,462) (12,698)
Purchase of marketable securities (2,473) (3,809)
Purchase of Preferred Stock - (3,000)
Proceeds from sales of marketable securities 5,915 5,318
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Net cash provided by (used in)
investing activities $ 980 ($14,189)
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CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of long term debt - 22,804
Principal payment of long term debt ( 1,792) (13,011)
Purchase of treasury stock ( 522) ( 1,137)
Cash Dividends ( 674) ( 580)
Other ( 14) (170)
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Net cash provided by (used in)
financing activities ($ 3,002) $ 7,906
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EFFECT OF EXCHANGE RATE CHANGES ON CASH 7 (19)
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Net increase (decrease) in cash and
cash equivalents 292 93
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 907 1,566
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CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 1,199 $ 1,659
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SUPPLEMENTAL DISCLOSURES TO THE
STATEMENTS OF CASH FLOWS:
Cash paid during the period for -
Interest, net of amounts capitalized $ 2,921 $ 2,296
Income taxes, net 453 517
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</TABLE>
4
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WILSHIRE OIL COMPANY OF TEXAS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1995 (Unaudited)
1. FINANCIAL STATEMENTS
The condensed financial statements included herein have been prepared by
the Registrant, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Registrant believes that the disclosures are adequate to make the
information presented not misleading. It is suggested that these condensed
financial statements be read in conjunction with the financial statements
and the notes thereto included in the Company's latest annual report on
Form 10-K This condensed financial information reflects, in the opinion of
management, all adjustments necessary to present fairly the results for the
interim periods. The results of operations for such interim periods are
not necessarily indicative of the results for the full year.
2. GAIN ON SALES OF MARKETABLE SECURITIES
The Company realized gains from the sales of marketable securities of
$5,946,000 and $5,457,000 for the nine months ended September 30, 1995 and
1994, respectively,and $1,046,000 and $1,646,000 for the three months ended
September 30, 1995 and 1994, respectively.
3. COMMITMENTS AND CONTINGENCIES
Federal income tax returns of the Company and its subsidiaries for the
years 1975 through 1983 are under review by the Internal Revenue Service.
The Company believes that final settlement of its Federal tax liability for
those years will not have a significant effect on its consolidated
financial position or results of operations.
5
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net income for the nine months ended September 30 was $2,851,000 in 1995 as
compared with $3,520,000 in 1994. Net income for the quarter ended September
30 was $217,000 in 1995 as compared with $951,000 in 1994.
The Company had $600,000 more in gains from the sale out of its Jacobs
stock portfolio in the third quarter of 1994 than in 1995. This year, instead
of taking the gains in the third quarter, the Company will take the gains in
the fourth quarter of 1995.
Oil and gas revenues were $4,428,000 in the first nine months of 1995 as
compared with $6,222,000 in 1994. This decrease was due to production declines
from period to period. Real estate revenues increased from $5,814,000 in the
first nine months of 1994 to $6,403,000 in 1995. This increase was principally
attributable to the operations of investment real estate properties acquired in
1994 as well as generally higher rents and occupancy.
Oil and gas production expense was comparable from period to period. Oil
and gas production expense was $1,977,000 in the first nine months of 1994 and
$2,047,000 in 1995.
Real estate operating expenses increased in the first nine months of 1995
over 1994 principally due to the newly acquired properties in 1994.
Depreciation, depletion, and amortization expense decreased in the first
nine months of 1995 compared with 1994 principally as a result of the increase
in the estimated value of the Company's oil and gas reserves at December 31,
1994.
Gain on sales of marketable securities was $5,946,000 in 1995 as compared
with $5,457,000 in 1994.
Interest expense increased from $2,469,000 in the first nine months of 1994
to $3,123,000 in 1995 due to the addition of $8,704,000 of new financing related
to the acquisition of real estate properties in 1994 as well as higher interest
rates in general in 1995.
The provision for income taxes includes Federal and Canadian taxes.
Differences between the effective tax rate and the statutory income tax rates
are due to foreign resource tax credits in Canada and the dividend exclusion in
the United States.
ACCOUNTING FOR INCOME TAXES
Statement of Financial Accounting Standard No. 109- "Accounting for Income
Taxes" became effective for the Company beginning in the first quarter of 1993.
SFAS 109 requires, among other things, an asset and liability approach to
accounting for income taxes. SFAS 109 did not have a material impact on the
Company's consolidated financial statements.
6
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ACCOUNTING FOR CERTAIN INVESTMENTS IN DEBT AND EQUITY SECURITIES
On December 31, 1994 the Company adopted Statement of Financial Accounting
Standards No. 115 "Accounting for Certain Investments in Debt and Equity
Securities" (SFAS 115). The investments of the Company are principally equity
securities, held for indefinite periods of time. These securities are carried
at fair value and the difference between cost and fair value is charged/credited
directly to shareholders' equity net of income taxes. As of September 30, 1995,
the gross unrealized gain on marketable securities was $20.7 million. This
amount, net of related deferred income taxes of $9.3 million, is included as a
credit to shareholders' equity in the Company's September 30, 1995 consolidated
balance sheet.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1995 the Company had approximately $13 million in
marketable securities at cost, with a market value of approximately $34 million.
The current ratio at September 30, 1995 was 5.8 to 1 on a market basis, which
management considers adequate for the Company's current business. The Company's
working capital was approximately $30 million at September 30, 1995.
The Company anticipates that cash provided by operating activities and
investing activities will be sufficient to meet its capital requirements to
acquire oil and gas properties and to drill and evaluate these and other oil and
gas properties presently held by the Company. The level of oil and gas capital
expenditures will vary in future periods depending on market conditions,
including the price of oil and the demand for natural gas, and other related
factors. As the Company has no material long-term commitments with respect to
its oil and gas capital expenditure plans, the Company has a significant degree
of flexibility to adjust the level of its expenditures as circumstances warrant.
The Company plans to actively continue its exploration and production
activities as well as search for the acquisition of oil and gas producing
properties and of companies with desirable oil and gas producing properties.
There can be no assurance that the Company will in fact locate any such
acquisitions.
The Company will explore other real estate acquisitions as they arise. The
timing of any such acquisition will depend on, among other things, economic
conditions and the favorable evaluation of specific opportunities presented to
the Company. The Company is currently planning further acquisitions of
investment properties during the next several months. Accordingly, while the
Company anticipates that it will actively explore these and other real estate
acquisition opportunities, no assurance can be given that any such acquisition
will occur.
7
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Net cash provided by (used in) operating activities was $2,307,000 and
$6,395,000 in the first nine months of 1995 and 1994, respectively. The changes
principally relate to changes in operating assets and liablilities.
Net cash provided by (used in) investing activities was $980,000 and
$(14,189,000) in the first nine months of 1995 and 1994, respectively. The
Company acquired $10.2 million of real estate properties during the first nine
months of 1994. Additionally, the Company acquired $3 million of preferred
stock during the first nine months of 1994.
Net cash provided by (used in) financing activities was $(3,002,000) and
$7,906,000 in the first nine months of 1995 and 1994, respectively. The
variation principally relates to the issuance of long-term debt in connection
with purchases of real estate properties during 1994.
The Company believes it has adequate capital resources to fund operations
for the foreseeable future.
8
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PART II - OTHER INFORMATION
ITEM 1, 2, 3, 4, 5 - NOT APPLICABLE
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
No Form 8-K was filed during the quarter ended September 30, 1995.
9
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S I G N A T U R E S
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its benine months by the
undersigned thereunto duly authorized.
WILSHIRE OIL COMPANY OF TEXAS
---------------------------------------
(Registrant)
Date: November 10, 1995 /s/Sherry Wilzig Izak
----------------- -----------------------------------------------------
By: Sherry Wilzig Izak
Chairman of the Board and Chief Executive Officer
(Duly Authorized Officer and Chief Financial Officer)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<CIK> 0000107454
<NAME> WILSHIRE OIL
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 1,199,000
<SECURITIES> 33,602,000
<RECEIVABLES> 921,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 36,342
<PP&E> 166,719,000
<DEPRECIATION> 102,568,000
<TOTAL-ASSETS> 106,493,000
<CURRENT-LIABILITIES> 6,303,000
<BONDS> 0
<COMMON> 10,014,000
0
0
<OTHER-SE> 21,583,000
<TOTAL-LIABILITY-AND-EQUITY> 106,493,000
<SALES> 4,428,000
<TOTAL-REVENUES> 10,831,000
<CGS> 2,047,000
<TOTAL-COSTS> 10,057,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,123,000
<INCOME-PRETAX> 4,125,000
<INCOME-TAX> 1,274,000
<INCOME-CONTINUING> 2,851,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,851,000
<EPS-PRIMARY> .30
<EPS-DILUTED> .30
</TABLE>
