<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 June 30, 1995 Commission file number 1-467
--------------------------------
WILSHIRE OIL COMPANY OF TEXAS
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(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 -----9,605,505
<PAGE>
WILSHIRE OIL COMPANY OF TEXAS
INDEX
Page No.
--------
Part I Financial Information
Financial Information: 1
Consolidated Balance Sheets -
June 30, 1995 and December 31, 1994
Consolidated Statements of Operations - 2
Six months ended June 30, 1995 and 1994
Consolidated Statements of Operations - 3
Three months ended June 30, 1995 and 1994
Consolidated Statements of Cash Flows - 4
Six months ended June 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>
ASSETS June 30, December 31,
1995 1994
------- --------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 1,033 $ 907
Accounts receivable 1,149 934
Marketable securities, stated at market
value in 1995 and 1994 30,009 29,989
Prepaid expenses and other current assets 611 450
-------- --------
Total current assets 32,802 32,280
-------- --------
INVESTMENT IN PREFERRED STOCK OF
THE TRUST COMPANY OF NEW JERSEY 6,000 6,000
-------- --------
PROPERTY AND EQUIPMENT
Oil and gas properties, using the
full cost method of accounting 129,099 127,880
Real estate properties 35,940 35,523
Other property and equipment 395 391
-------- --------
165,434 163,794
Less - Accumulated depreciation,
depletion and amortization 101,112 98,876
-------- --------
64,322 64,918
-------- --------
$103,124 $103,198
-------- --------
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 2,600 $ 2,484
Accounts payable 2,847 2,853
Accrued liabilities 428 626
-------- --------
Total current liabilities 5,875 5,963
-------- --------
LONG - TERM DEBT, less current portion 48,885 50,160
-------- --------
DEFERRED INCOME TAXES 18,957 18,636
-------- --------
-------- --------
COMMITMENTS AND CONTINGENCIES (Note 3)
SHAREHOLDERS' EQUITY
Common stock, $1 par value,
15,000,000 shares authorized;
issued 10,013,544 and 10,013,544
shares in 1995 and 1994 10,014 10,014
Capital in excess of par value 10,102 10,399
Unrealized gain on marketable securities
($17,471 in 1995 and $18,487 in 1994),
net of deferred income taxes 9,633 10,168
Retained earnings 4,792 2,822
-------- --------
34,541 33,403
Less -
Treasury stock, 408,039 and 341,818
shares in 1995 and 1994, at cost 2,714 2,290
Cumulative foreign currency
translation adjustment 2,420 2,674
-------- --------
29,407 28,439
-------- --------
$103,124 $103,198
-------- --------
-------- --------
</TABLE>
1
<PAGE>
WILSHIRE OIL COMPANY OF TEXAS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(000's Omitted, Except Share Data)
(Unaudited)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
-------------------------
June 30, June 30,
1995 1994
------- --------
<S> <C> <C>
REVENUES
Oil & Gas $ 3,013 $ 4,021
Real Estate 4,239 3,785
----- ---------
Total Revenues 7,252 7,806
COSTS AND EXPENSES
Oil and Gas Production Expenses 1,362 1,331
Real Estate Operating Expenses 2,372 2,074
Depreciation, depletion and amortization 2,077 2,413
General and Administrative 689 712
------- -------
Total Costs and Expenses 6,500 6,530
-------- -------
Income from Operations 752 1,276
OTHER INCOME 328 181
GAIN ON SALES OF MARKETABLE
SECURITIES (Note 2) 4,900 3,811
INTEREST EXPENSE ( 2,111) (1,546)
------- -------
Income before provision
for income taxes 3,869 3,722
-------- --------
PROVISION FOR INCOME TAXES
Federal
Current 519 672
Deferred 638 401
Foreign
Current 20 46
Deferred 58 34
---------- -------
1,235 1,153
--------- ---------
Net income $ 2,634 $ 2,569
--------- ---------
AVERAGE NUMBER OF SHARES OF
COMMON STOCK OUTSTANDING: 9,651,016 9,991,514
--------- ---------
INCOME PER COMMON SHARE $ .27 $ .26
--------- ---------
</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
--------------------------
June 30, June 30,
1995 1994
------- --------
<S> <C> <C>
REVENUES
Oil & Gas $ 1,378 $ 2,179
Real Estate 2,155 2,014
--------- -----------
Total Revenues 3,533 4,193
COSTS AND EXPENSES
Oil and Gas Production Expenses 676 601
Real Estate Operating Expenses 1,156 1,102
Depreciation, depletion and amortization 1,130 1,352
General and Administrative 433 313
--------- ---------
Total Costs and Expenses 3,395 3,368
--------- ---------
Income from Operations 138 825
OTHER INCOME 168 97
GAIN ON SALES OF MARKETABLE
SECURITIES (Note 2) 2,698 1,709
INTEREST EXPENSE (1.051) (854)
------- ---------
Income before provision
for income taxes 1,953 1,777
--------- ---------
PROVISION FOR INCOME TAXES
Federal
Current ( 6 ) 392
Deferred 638 76
Foreign
Current 33 ( 28)
Deferred ( 16) 74
--------- ---------
649 514
--------- ---------
Net income 1,304 $ 1,263
--------- ---------
AVERAGE NUMBER OF SHARES OF
COMMON STOCK OUTSTANDING: 9,637,942 9,979,740
--------- ---------
INCOME PER COMMON SHARE $ .14 $ .13
---------- ---------
</TABLE>
3
<PAGE>
WILSHIRE OIL COMPANY OF TEXAS AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(000's Omitted)
(Unaudited)
<TABLE>
<CAPTION>
For The Six Months Ended
--------------------------
June 30, June 30,
1995 1994
------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 2,634 $ 2,569
Adjustments to reconcile net income to net
cash provided by operating activities -
Depreciation, depletion and amortization 2,077 2,413
Deferred income tax provision 696 435
Amortization (adjustment) of deferred and
unearned compensation in connection
with non-qualified stock option plan, net (296) 92
Gain on sales of marketable securities (4,900) (3,811)
Foreign currency transactions - -
Changes in operating assets and liabilities -
(Increase) decrease in receivables ( 215 ) (759)
(Increase) in prepaid expenses and other
current assets (161) (32)
Increase (decrease) in income taxes payable (364) 717
Increase (decrease) in accounts payable,
accrued and other liabilities 525 (283)
------- -------
Net cash provided by (used in)
operating activities $ ( 4 ) $ 1,341
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures, net ( 1,415) (12,235)
Purchase of marketable securities ( 1,918) ( 2,584)
Purchase of Preferred Stock - ( 3,000)
Proceeds from sales of marketable securities 5,044 4,414
------- -------
Net cash provided by (used in)
investing activities $ 1,711 ($13,405)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of long term debt - 22,804
Principal payment of long term debt ( 1,159) (10,620)
Purchase of treasury stock ( 425) ( 538)
Exercise of stock options - -
Other - -
------- -------
Net cash provided by (used in)
financing activities ($ 1,584) $ 11,646
------- -------
EFFECT OF EXCHANGE RATE CHANGES ON CASH 3 35
------- -------
Net increase (decrease) in cash and
cash equivalents 126 (383)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 907 1,566
------- -------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 1,033 $ 1,183
------- -------
SUPPLEMENTAL DISCLOSURES TO THE
STATEMENTS OF CASH FLOWS:
Cash paid during the period for -
Interest, net of amounts capitalized $ 1,982 $ 1,437
Income taxes, net 221 364
------- -------
</TABLE>
4
<PAGE>
WILSHIRE OIL COMPANY OF TEXAS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 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
$4,900,000 and $3,811,000 for the six months ended June 30, 1995 and 1994,
respectively, and $2,698,000 and $1,709,000 for the three months ended June
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
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net income for the six months ended June 30 increased from $2,569,000 in
1994 to $2,634,000 in 1995. Net income for the quarter ended June 30 increased
from $1,263,000 in 1994 to $1,304,000 in 1995.
Oil and gas revenues were $3,013,000 in the first half of 1995 as compared
with $4,021,000 in 1994. This decrease was due to production declines from
period to period. Real estate revenues increased from $3,785,000 in the first
half of 1994 to $4,239,000 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 $1,331,000 in the first half of 1994 and
$1,362,000 in 1995.
Real estate operating expenses increased in the first half of 1995 over
1994 principally due to the newly acquired properties in 1994.
Depreciation, depletion, and amortization expense decreased in the first
half of 1995 compared with 1994 principally as a result of the increase in the
estimated value of the Company's oil and gas reserves.
Gain on sales of marketable securities was $4,900,000 in 1995 as compared
with $3,811,000 in 1994..
Interest expense increased from $1,546,000 in the first half of 1994 to
$2,111,000 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
<PAGE>
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 June 30, 1995, the
gross unrealized gain on marketable securities was $17.5 million. This amount,
net of related deferred income taxes of $7.9 million, is included as a credit
to shareholders' equity in the Company's June 30, 1995 consolidated balance
sheet.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1995 the Company had approximately $12.5 million in marketable
securities at cost, with a market value of approximately $30 million. The
current ratio at June 30, 1995 was 5.6 to 1 on a market basis, which management
considers adequate for the Company's current business. The Company's working
capital was approximately $27 million at June 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. Accordingly, while the Company anticipates that it will actively
explore real estate acquisition opportunities, no assurance can be given that
any such acquisition will occur.
7
<PAGE>
Net cash provided by (used in) operating activities was $(4,000) and
$1,341,000 in the first six 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 $1,711,000 and
$(13,405,000) in the first six months of 1995 and 1994, respectively. The
Company acquired $10.2 million of real estate properties during the first half
of 1994. Additionally, the Company acquired $3 million of preferred stock
during the first half of 1994.
Net cash provided by (used in) financing activities was $(1,584,000) and
$11,646,000 in the first half 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
<PAGE>
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 June 30, 1995.
9
<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 thereunto duly authorized.
WILSHIRE OIL COMPANY OF TEXAS
----------------------------------
(Registrant)
Date: AUGUST 12, 1995 /s/Sherry Wilzig Izak
--------------- -----------------------------------
By: Sherry Wilzig Izak
Chairman of the Board and Chief
Executive Officer
(Duly Authorized Officer and Chief
Financial Officer)
<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 thereunto duly authorized.
WILSHIRE OIL COMPANY OF TEXAS
----------------------------------
(Registrant)
Date: AUGUST 12, 1995
--------------- -----------------------------------
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
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 1,033,000
<SECURITIES> 30,009,000
<RECEIVABLES> 1,149,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 32,802,000
<PP&E> 165,434,000
<DEPRECIATION> 101,112,000
<TOTAL-ASSETS> 103,124,000
<CURRENT-LIABILITIES> 5,875,000
<BONDS> 0
<COMMON> 10,014,000
0
0
<OTHER-SE> 19,393,000
<TOTAL-LIABILITY-AND-EQUITY> 103,124,000
<SALES> 3,013,000
<TOTAL-REVENUES> 7,252,000
<CGS> 1,362,000
<TOTAL-COSTS> 6,500,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,111,000
<INCOME-PRETAX> 3,869,000
<INCOME-TAX> 1,235,000
<INCOME-CONTINUING> 2,634,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,634,000
<EPS-PRIMARY> .27
<EPS-DILUTED> .27
</TABLE>
