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, 1997
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 Identification
incorporation or organization) No.)
330 W. William Street, PO 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 change 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, 1997 were $2,113,780 or
129% more than the quarter ending September 30, 1996 and $630,451 or 14%
less than the quarter ending June 30, 1996.
Degree days for the quarter ending June 30, 1997 were 1,004 or 1,731% more
than the quarter ending September 30, 1996 and 73 or 7% more than the
quarter ending June 30, 1996. 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)
Actual MCF From Quarter Ending
Deliveries 06/30/97
Quarter Ending 06/30/97 1,490,737
Quarter Ending 09/30/96 876,534 (614,203)
Quarter Ending 06/30/96 1,545,045 54,308
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
$2,183,583 or 153% more than the quarter ending September 30, 1996 and
$548,860 or 13% less than the quarter ending June 30, 1996.
Net Income was $251,951 more than the quarter ended September 30, 1996 and
$84,515 less than the quarter ending June 30, 1996.
Since the Company's business is seasonal by quarters, results for the first
nine months of fiscal year 1997 should not be used as an indication of what
results for the full twelve months of fiscal year 1997 may be.
In September 1995 the Company purchased the assets of a local gas distribution
system, 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 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. 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, did not have significant impact on
1995, but contributed in excess of $150,000 to gross margin (revenues
less gas cost) for the period ended September 30, 1996.
In December, 1994 the New York Public Service Commission instituted
a proceeding to address issues related to the emerging competitive natural
gas market. This proceeding was 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. New tariff filings were approved and became effective September 1,
1996. The Company considers this a transitional step towards full unbundling
of services with future changes made as circumstances warrant.
The Company received approval for a rate increase form the New York State
Public Service Commission of approximately $124,000 in revenues with an
effective date of September 1, 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, 1997.
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, 1997.
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 NAATURAL GAS CORPORATION
Date July 28, 1997 THOMAS K. BARRY
Thom
as K. Barry, Chairman of
the Board, President and C.E.O.
Date July 28, 1997 GARY K. EARLEY
Gary K. Earley, Treasurer
CORNING NATURAL GAS CORPORATION CONSOLIDATED STATEMENT OF
INCOME
UNAUDITED FORM 10 QSB
FOR QUARTER ENDED NINE MONTHS ENDED
06/30/97 06/30/96 06/30/97 06/30/96
Operating Revenues $3,756,539 $4,386,990 $16,271,835 $13,356,313
Cost and Expense
Operating Expense 3,612,447 4,161,307 14,425,959 11,907,061
Interest Expense 201,039 187,664 651,714 407,652
Income Tax 915 26,218 412,704 450,713
Other Deductions 218 1,029 1,432 2,662
Total 3,814,619 4,376,218 15,491,809 12,768,088
Operating Income (58,080) 10,722 780,026 588,225
Other Income 100 2,884 988 92,143
Corning Natural Gas Appliance Corp.:
Operating Revenues 428,209 494,754 1,683,001 1,035,759
Depreciation 58,462 58,328 180,679 116,579
Other Op Expense 333,252 373,858 1,263,074 757,629
Federal Income Tax 13,493 26,687 85,653 71,604
Net Income Appl Corp. 23,002 35,881 153,595 89,947
Net Income $ (34,978) 49,537 943,609 770,315
Earnings Per Share $ (.08) .108 2.032 1.675
Dividends Per Share .32 .315 .96 .63
Total Dividends Paid 147,200 144,901 441,600 289,801
Shares of common stock outstanding were 460,000 at June 30, 1997
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.
CORNING NATURAL GAS CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
FORM 10-QSB - UNAUDITED
JUNE 30, 1997 JUNE 30, 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 934,609 $
770,316
Adjustments to Reconcile Net Income
to Net Cas
Provided by Operating Activities:
Depreciation 538,450 355,92
9
Allowance for Funds Used During Const. 0 0
Changes in Assets and Liabilities:
(Increase) Decrease in:
Accounts Receivable ( 360,926) 231,495
Materials, Supplies & Appliance Inventory 559,030 (475,915)
Other Deferred Charges 1,469,088 2,487,393
Prepaid and Other Assets 106,756 (124,741)
Increase (Decrease) in:
Accounts Payable 355,275 (222,258)
Accrued General Taxes 74,455 208,596
Accrued Federal Income Tax 39,249 (84,484)
Deferred Federal Income Tax (201,976) (390,942)
Other Liabilities and Deferred Credits (872,813) ( 38,093)
Net Cash Provided (used) by
Operating Activities 2,641,197 2,717,296
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures (621,769)
(343,461)
Allowance for Funds Used During Const. 0 0
Net Cash Used in Investing Activities (621,769) (343,461)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Borrowings (Repayments) Under
Line-of-Credit Agreement (650,000) (1,980,000)
Dividends Paid (441,600)
(289,801)
Repayment of Long-Term Debt (100,000) 0
Restricted Funds used for
Qualified Additions 0 0
Common Stock Issued 0
0
Net Cash Provided (used in)
Financing Activities (1,191,600)
(2,269,801)
NET INC. (DEC.) IN CASH
AND CASH EQUIV. 827,828 104,034
CASH AND CASH EQUIV. AT BEG.
OF PERIOD 180,595 405,806
CASH AND CASH EQUIV. AT
END OF PERIOD $ 1,008,423 509,840
Supplemental Disclosures of Cash Flow Information:
Cash paid During the Year for:
Interest (Net of Amt Capitalized) $ 710,336 $ 387,974
Income Taxe $ 553,246 $
865,063
CORNING NATURAL GAS CORPORATION
Consolidated Balance Sheet At June 30, 1997
Form 10-QSB
Unaudited
Assets 06/30/97
09/30/96
Gas Utility Plant $20,132,084 $19,616,872
Non-Utility-Principally Rented
Gas App. 2,519,440 2,451,396
22,651,524 22,068,268
Less: Prov for Depreciation (8,346,065) (7,846,128)
$14,305,459
$14,222,140
Current Assets:
Cash and Equivalents 1,008,423 180,595
Restricted Short-Term Investments 0 0
Accounts Receivable 1,150,603
789,677
Materials, Supplies and Inventories 1,441,099 2,000,129
Prepayments and Other 766,892 873,648
Total Current Assets 4,367,017 3,844,049
Non-Current Assets
Def. Tax Assets 659,953
257,000
Def. Debits - Acctg. for Income Taxes 671,432 1,016,661
Deferred Debits (251,376)
1,217,712
Total Non-Current Assets 1,080,009 2,491,373
Total Assets $19,752,485 $20,557,562
Capitalization & Liabilities
Capitalization:
Common Stock 2,300,000 2,300,000
Premium on Capital Stock - Common 653,346 653,346
Retained Earnings 2,687,391 2,194,382
5,640,737 5,147,728
Long Term Debt 6,200,000 6,300,000
Total Capitalization 11,840,737 11,447,728
Current Liabilities:
Short Term Notes Payable 2,075,000 2,725,000
Accounts Payable 1,501,465 1,146,190
Customer Deposits and Accrued Interest 229,118 735,398
Accrued Federal Income Tax 39,249 0
Other Accrued Taxes 216,053 141,598
Current Maturities of Long Term Deb 100,000 100,000
Other Current and Accrued Liabilities 335,657 884,710
Total Current Liabilities 4,496,542 5,732,896
Accumulated Deferred FIT 2,472,961 2,617,213
Reserves and Other Liabilities 942,245 759,725
Total Liab. and Capitalization $ 19,752,485 $ 20,557,562
See Management's Discussion & Analysis on Page 5
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