SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 1996
Commission File Number 0-643
Corning Natural Gas Corporation
(Exact name of registrant as specified in its charter)
New York 16-0397420
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
330 W. William St,. P.O. Box 58, Corning, New York 14830
607-936-3755
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if
changed since last report)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Sections 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
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
Yes No
There were 460,000 shares of Common Stock outstanding at the
end of the quarter. There is only one class of Common Stock and
no Preference Stock outstanding.
Management's Discussion
Operating revenues for the quarter ending June 30, 1996
were $108,313 or 3% less than the quarter ending December 31,
1995 and $774,381 or 22% more than the quarter ending June 30,
1995.
Degree days for the quarter ending June 30, 1996 were
1,510 or 60% less than the quarter ending December 31, 1995 and 8
or 1% more than the quarter ending June 30, 1995. Since much of
the Company's sales are dependent on weather conditions, the
effects of the changes in degree days are reflected in the total
MCF (thousand Cubic feet) deliveries.
Increase (Decrease)
From Quarter Ending
Actual MCF Deliveries 6/30/96
Quarter Ending 06/30/96 1,545,045
Quarter Ending 12/31/95 2,200,305 ( 655,260)
Quarter Ending 06/30/95 1,460,330 ( 84,715)
MCF deliveries include transportation of customer owned gas
for specific end use customers for which the Company receives a
fee equal to its normal markup for transporting the gas.
Operating expenses, made up largely of the cost of purchased
gas were $195,278 or 5% more than the quarter ending December
31, 1995 and $756,808 or 22% more than the quarter ending June
30, 1995.
Net Income was $262,152 or 84% less than the quarter ended
December 31, 1995 and $16,123 or 48% more than the quarter ending
June 30, 1995.
Since the Company's business is seasonal by quarters,
results for the first six months of 1996 should not be used as
an indication of what results for the full twelve months of 1996
may be.
In September 1995 the Company purchased the assets of a
local gas distribution company, Finger Lakes Gas Company, through
the Federal Bankruptcy Court. Finger Lakes Gas served customers
in the Hammondsport, NY area and had a customer base of
approximately 320 customers. The Company was able to purchase
this all plastic system with a bid of $560,000. The Company was
pleased to purchase these assets that originally cost over $1.5
million to construct for its relatively low bid. The nearly new,
all plastic, system was already connected and serving 320
customers with a potential to add 200 more in the near future.
On a per customer basis, this represents a very low investment.
The capital to purchase these assets was obtained through short
term debt. The Company has not found it necessary to apply for
an increase in rates on this part of our system which means the
original rates made effective in 1990 remain in effect six years
later.
Shortly after the Company took possession of the system,
Mercury Aircraft, Inc. announced it would purchase the former
Taylor Wine Company facilities and centralize their other plants
there. The reopening of this major facility will most certainly
contribute toward the stability and future viability of the new
gas system which is now part of the Company. The former Finger
Lakes Gas Company's operations, which did not have a significant
impact on 1995, are included in the consolidated results from the
acquisition date.
In December, 1994 the New York Public Service Commission
instituted a proceeding to address issues related to the merging
competitive natural gas market. This proceeding is intended to
provide a framework whereby access to facilities on upstream
pipelines made available by FERC Order 636 would be available to
end use customers on the Local Distribution Company level. The
Company made the required filings; they were approved and became
effective May 1, 1996. The Company considers this a transitional
step towards full unbundling of services with future changes made
as circumstances warrant.
The Company currently has a rate application before the New
York State Public Service Commission requesting an increase of
approximately 2.5% of revenues. Negotiations are on going and
the Company expects approval of the application and the ability
to implement the new rates in 1996.
Internal generation of funds should be sufficient to meet
the needs of the Company coupled with some intermittent short-
term borrowings.
There has been no change in independent public accountants.
The Company has not filed any reports on Form 8-K for the quarter
ended June 30, 1996.
The information furnished herewith reflects all adjustments
which are in the opinion of management necessary to a fair
statement of the results for the period. Certain information and
footnote disclosure normally included in financial statements
prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to SEC rules
and regulations, although the Company believes the disclosures
which are made are adequate to make the information presented not
misleading.
The condensed financial statements should be read in
conjunction with the financial statements and notes thereto
included in the Company's latest annual report on Form 10-KSB.
The statements contained herein have not been examined or
certified by a firm of certified public accountants.
There were no sales of unregistered securities (debt or
equity) during the fiscal quarter ending June 30, 1996.
SIGNATURES
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.
CORNING NATURAL GAS CORPORATION
(Registrant)
Date July 19, 1996 THOMAS K. BARRY
Thomas K. Barry, Chairman of
the Board, President and
C.E.O.
Date July 19, 1996 GARY K. EARLEY
Gary K. Earley, Treasurer
SIGNATURES
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.
CORNING NATURAL GAS CORPORATION
(Registrant)
Date July 19, 1996
Thomas K. Barry, Chairman of
the Board, President and
C.E.O.
Date July 19, 1996
Gary K. Earley, Treasurer
CONSOLIDATED STATEMENT OF INCOME
UNAUDITED
FORM 10 QSB
FOR QUARTER ENDED 6 MONTHS ENDED
June 30, 1996 June 30, 1995 June 30, 1996 June 30, 1995
Operating Revenues $ 4,386,990 $ 3,612,609 $ 13,356,313 $ 10,561,311
Cost and Expense
Operating Expenses 4,161,307 3,404,499 11,907,061 9,282,860
Interest Expense 187,664 188,059 407,652 410,605
Income Tax 26,218 17,818 450,713 320,022
Other Deductions Net 1,029 2,350 2,662 5,304
Total Costs and Expenses 4,376,218 3,612,726 12,768 088 10,018,791
Operating Income 10,722 (117) 588,225 542,520
Other Income 2,884 4,360 92,143 12,226
Corning Natural Gas Appl. Corp.
Operating Revenues 494,754 468,545 1,035,759 939,087
Depreciation 58,328 59,529 116,579 116,440
Other Operating Expenses 373,858 364,286 757,629 715,201
Federal Income Tax 26,687 15,559 71,604 40,803
Net Income of Appl. Corp. 35,881 29,171 89,947 66,643
Net Income $ 49,537 $ 33,414 $ 770,315 $ 621,389
Earnings Per Share $ .108 $ .073 $ 1.675 $ 1.351
Dividends Per Share $ .315 .31 .63 .62
Total Dividends Paid $ 144,901 142,600 289,801 285,200
Shares of common stock outstanding were 460,000 at June 30, 1996.
Earnings per share = Net Income as shown above divided by
460,000 shares. Dividends per share = Dividends paid divided by
shares outstanding at the time.
See Management's Discussion & Analysis on Page 5.
CONSOLIDATED STATEMENT OF CASH FLOWS
FORM 10-QSB - UNAUDITED
June 30, 1996 June 30, 1995
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income 770,316 621,388
Adjustments to Reconcile Net
Income to Net Cash
Provided by Operating Activities:
Depreciation 355,929 285,444
All. for Funds Used During Const. 0 0
Changes in Assets and Liabilities:
(Increase) Decrease in:
Accounts Receivable 231,495 243,519
Materials, Supplies & Appliance
Inventory (475,915) 442,578
Other Deferred Charges 2,487,393 2,089,476
Prepaid and Other Assets (124,741) 127,982
Increase (Decrease) in:
Accounts Payable (222,258) (143,482)
Accrued General Taxes 208,596 72,885
Accrued Federal Income Tax (84,484) 234,498
Deferred Federal Income Tax (390,942) 18,619
Other Liabilities and Deferred
Credits ( 38,093) ( 752,469)
Net Cash Provided (used) by
Operating Activities 2,717,296 3,240,438
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures ( 343,461) (338,700)
Allowance for Funds Used During
Construction 0 0
Net Cash Used in Investing Activities( 343,461) (338,700)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Borrowings (Repayments) Under
Line-of-Credit Agreement (1,980,000) (2,045,000)
Dividends Paid (289,801) (285,200)
Repayment of Long-Term Debt 0 0
Restricted Funds used for
Qualified Additions 0 0
Common Stock Issued 0 0
Net Cash Provided (Used In)
Financing Activities (2,269,801) (2,690,200)
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 104,034 211,538
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 405,806 183,086
CASH AND CASH EQUIVALENTS AT END OF PERIOD 509,840 394,624
=========== ===========
Supplemental Disclosures of Cash Flow
Information:
Cash Paid During The Year For:
Interest (Net of Amount Capitalized) 387,974 398,679
Income Taxes 865,063 61,750
Consolidated Balance Sheet At June 30, 1996
Assets 06/30/96 12/31/95
Gas Utility Plant $ 19,445,643 $19,309,418
Non-Utility Principally Rented Gas Appl. 2,400,268 2,366,834
21,845,911 21,675,252
Less: Accum. Provision for Depreciation (7,701,345) (7,519,218)
$ 14,144,566 $14,156,034
Current Assets:
Cash and Equivalents 509,840 405,806
Restricted Short-Term Investments 0 0
Accounts Receivable 1,586,711 1,818,206
Materials, Supplies and Inventories 1,914,759 1,438,844
Prepayments and Other 616,104 491,363
Total Current Assets 4,627,414 4,154,219
Non-Current Assets:
Def. Tax Assets 613,463 1,016,661
Def. Debits - Acctg. for Income Taxes 660,720 315,000
Deferred Debits (317,592) 2,169,801
Total Non-Current Assets 956,591 3,501,462
Total Assets $ 19,728,571 $21,812,715
========== ==========
Capitalization and Liabilities
Capitalization:
Common Stock 2,300,000 2,300,000
Premium on Capital Stock-Common 653,346 653,346
Retained Earnings 2,626,212 2,145,697
5,579,558 5,099,043
Long Term Debt 6,300,000 6,300,000
Total Capitalization 11,879,558 11,399,043
Current Liabilities:
Short Term Notes Payable 1,835,000 3,815,000
Accounts Payable 1,398,380 1,620,638
Customer Deposits and Accrued Int. 202,080 192,213
Accrued Federal Income Tax 6,579 91,063
Other Accrued Taxes 316,183 107,587
Current Maturities of Long Term Debt 100,000 100,000
Other Current and Accrued Liabilities 499,188 343,498
Total Current Liabilities 4,357,410 6,269,999
Accrued Deferred FIT 2,454,983 2,963,403
Reserves and Other Liabilities 1,036,620 1,240,220
Total Liabilities and Capitalization $ 19,728,571 $21,812,715
========== ==========
See Management's Discussion & Analysis on Page 5
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