FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the quarterly period ended December 31, 1998 or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from __________ to __________
Commission file number 1-8680
HIGH PLAINS CORPORATION
(Exact name of registrant as specified in its charter)
Kansas #48-0901658
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
200 W. Douglas 67202
Suite #820 (Zip Code)
Wichita, Kansas
(Address of principal
executive offices)
(316) 269-4310
(Registrant's telephone number)
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
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
Common Stock, Par Value $.10 per share,
Outstanding at December 31, 1998 - 15,999,444
<PAGE>
PART I FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
Balance Sheets 3 - 4
Statements of Operations 5
Statements of Stockholders' Equity 6
Statements of Cash Flows 7
Selected Notes to Financial Statements 8 - 9
Item 2. MANAGEMENT'S DISCUSSIONS AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS 10 - 14
PART II OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 4. Submission of Matters to a Vote of Security Holders 15
Item 6. Exhibits and Reports on Form 8-K 16
<PAGE>
<TABLE>
HIGH PLAINS CORPORATION
Balance Sheets
(Unaudited)
December 31, 1998 and June 30, 1998
<CAPTION>
December 31, June 30,
Assets 1998 1998
(Unaudited) **
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 1,071,970 $ 674,894
Accounts Receivable
Trade (less allowance of $75,000
in 1998 and 1997) 7,086,352 4,500,579
Production credits and incentives
(less allowance of $124,222 and $0) 342,132 829,849
Inventories 4,144,519 6,328,232
Current portion of long-term
notes receivable -0- 31,307
Prepaid expenses 936,349 85,168
Refundable income tax -0- 30,000
Total current assets 13,581,322 12,480,029
Property, plant and equipment, at cost:
Land and land improvements 433,496 433,496
Ethanol plants 94,123,655 92,906,633
Other equipment 539,926 473,345
Office equipment 298,654 279,278
Leasehold improvements 48,002 48,002
95,443,733 94,140,754
Less accumulated depreciation (25,698,557) (23,819,484)
Net property, plant and equipment 69,745,176 70,321,270
Other assets:
Equipment held for resale 151,151 264,554
Deferred loan costs (less accumulated
amortization of $55,434 and $38,095,
respectively) 107,285 117,890
Other 30,178 65,886
Total other assets 288,614 448,330
$ 83,615,112 $ 83,249,629
<FN>
See accompanying notes to financial statements.
** From audited financial statements.
</TABLE>
<PAGE>
<TABLE>
HIGH PLAINS CORPORATION
Balance Sheets Continued
(Unaudited)
December 31, 1998 and June 30, 1998
<CAPTION>
December 31, June 30,
Liabilities and Stockholders' Equity 1998 1998
(Unaudited) **
<S> <C> <C>
Current liabilities:
Revolving lines-of-credit $ 9,900,000 $ 9,000,000
Current maturities of capital lease
obligations 515,446 500,852
Accounts payable 8,720,973 8,364,074
Accrued interest 268,506 223,722
Accrued payroll and property taxes 746,151 822,971
Deferred income taxes payable 161,000 -0-
Total current liabilities 20,312,076 18,911,619
Revolving line-of-credit 8,000,000 9,700,000
Capital lease obligations, less
current maturities 1,742,272 2,002,623
Deferred income taxes payable 221,328 -0-
Other 417,828 364,240
10,381,428 12,066,863
Stockholders' equity:
Common stock, $.10 par value, authorized
50,000,000 shares; issued 16,410,622
shares at December 31, 1998 and June
30, 1998, of which 411,178 shares were
held as treasury stock at December 31,
1998 and June 30, 1998 1,641,062 1,641,062
Additional paid-in capital 37,457,167 37,457,167
Retained earnings 14,823,600 14,170,697
53,921,829 53,268,926
Less:
Treasury stock - at cost (863,911) (863,911)
Deferred compensation (136,310) (133,868)
Total stockholders' equity 52,921,608 52,271,147
$ 83,615,112 $ 83,249,629
<FN>
See accompanying notes to financial statements.
** From audited financial statements.
</TABLE>
<PAGE>
<TABLE>
HIGH PLAINS CORPORATION
Statements of Income
(Unaudited)
Three Months Ended December 31, 1998 and 1997
and Six Months Ended December 31, 1998 and 1997
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Net sales and revenues $22,776,074 $21,660,983 $49,165,933 $44,231,820
Cost of products sold 21,080,787 20,489,792 46,760,588 40,995,891
Gross Profit 1,695,287 1,171,191 2,405,345 3,235,929
Selling, general and
administrative expenses 515,505 465,213 972,966 915,342
Operating income 1,179,782 705,978 1,432,379 2,320,587
Other income (expense):
Interest expense (455,809) (324,534) (898,408) (667,122)
Interest and other income 16,502 31,932 268,117 62,871
Gain on sale of assets 90,143 -0- 233,143 -0-
(349,164) (292,602) (397,148) (604,251)
Net earnings before
income taxes 830,618 413,376 1,035,231 1,716,336
Income tax (expense)
benefit (307,328) (7,968) (382,328) 59,953
Net earnings $ 523,290 $ 405,408 $ 652,903 $ 1,776,289
Diluted earnings per
share:
Net earnings $ .03 $ .03 $ .04 $ .11
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
HIGH PLAINS CORPORATION
Statements of Stockholders' Equity
(Unaudited)
Six Months Ended December 31, 1998
<CAPTION>
Common
Stock
Additional
Number Paid-in Retained Treasury Deferred
of Shares Amount Capital Earnings Stock Compensation Total
<S> <C> <C> <C> <C> <C> <C> <C>
Balance,
June 30, 1998 16,410,622 $1,641,062 $37,457,167 $14,170,697 $ (863,911) $ (133,868) $52,271,147
Employee Stock
Purchase (23,351) (23,351)
Amortization of
deferred
compensation 11,166 11,166
Net earnings for
the quarter 129,613 129,613
Balance,
September 30,
1998 16,410,622 $1,641,062 $37,457,167 $14,300,310 $ (863,911) $ (146,053) $52,388,575
Amortization of
deferred
compensation 9,743 9,743
Net earnings for
the quarter 523,290 523,290
Balance
December 31,
1998 16,410,622 $1,641,062 $37,457,167 $14,823,600 $ (863,911) $ (136,310) $52,921,608
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
HIGH PLAINS CORPORATION
Statements of Cash Flows
(Unaudited)
Six Months Ended December 31, 1998 and 1997
<CAPTION>
1998 1997
<S> <C> <C>
Cash Flows from operating activities:
Net earnings $ 652,903 $ 1,776,289
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 1,897,711 1,682,192
Amortization of deferred compensation 20,909 32,948
Compensation expense on stock options granted -0- 39,131
Provision for bad debt 124,222 -0-
Gain on sale of equipment (233,143) (1,050)
Debt forgiveness (231,359) -0-
Deferred income taxes 382,328 -0-
Payments on notes receivable 31,307 57,283
Changes in operating assets and liabilities:
Accounts receivable (2,222,278) (2,227,156)
Inventories 2,183,713 1,088,341
Refundable income tax 30,000 145,328
Prepaid expenses (851,181) (544,586)
Accounts payable 588,258 1,135,837
Accrued liabilities (32,036) (37,070)
Net cash provided by operating activities 2,341,354 3,147,487
Cash flows from investing activities:
Proceeds from sale of equipment 436,545 8,590
Acquisition of property, plant and equipment (1,394,280) (5,904,041)
Decrease (increase) in other non-current
assets 28,976 (19,735)
Net cash used in investing activities (928,759) (5,915,186)
Cash flows from financing activities:
Proceeds from revolving lines-of-credit 900,000 5,700,000
Payments on revolving lines-of-credit (1,700,000) (2,800,000)
Payments on capital lease obligations (245,757) (264,016)
Increase in other non-current liabilities 30,238 12,219
Net cash provided by financing activities (1,015,519) 2,648,203
Increase (Decrease) in cash and cash
equivalents 397,076 (119,496)
Cash and cash equivalents:
Beginning of period 674,894 2,389,758
End of period $ 1,071,970 $ 2,270,262
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
HIGH PLAINS CORPORATION
Selected Notes to Financial Statements
(1) Basis Of Presentation
The accompanying financial statements have been prepared by High Plains
Corporation ("Company) without audit. In the opinion of management, all
adjustments (which include only normally recurring adjustments) necessary to
present fairly the financial position, results of operations and changes in
financial position for the periods presented, have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principals
have been condensed or omitted. The results of operations for the period ended
December 31, 1998 are not necessarily indicative of the operating results for
the entire year.
(2) Financial Arrangements
Subsequent to the quarter ending December 31, 1998, the Company amended its
revolving credit note with its primary lender. The amendment extends the
maturity of this note from January 8, 1999 to March 31, 1999. The Company has
$6.5 million outstanding on this line of credit. In addition, at December 31,
1998 the Company failed to meet certain financial covenant ratios as required
under the Company's existing lending agreement. However on February 4, 1999
the lender waived its rights to declare the debt due and payable based on these
covenant violations at December 31, 1998. The Company is currently negotiating
with its lender for the expansion of the Company's existing lines-of-credit and
to reset certain covenant requirements to avoid potential future violations.
(3) Stock Options
On December 16, 1998, 115,000 options were granted at $1.625 per share to
certain directors and officers in lieu of compensation. On December 31, 1998
15,000 options were granted at $1.6875 per share to the president pursuant to
an employment agreement. These options were issued at the fair market value of
the stock on the grant date.
(4) Stock-Based Compensation
The Company continues to account for stock-based compensation for employees
using the intrinsic value method prescribed in APB No. 25. Accordingly,
compensation cost for stock options is measured as the excess, if any, of the
quoted market price of the Company's stock at the date of grant over the amount
an employee must pay to acquire the stock.
Had compensation cost for the stock-based compensation been determined based on
the fair value grant date, consistent with the provisions of FAS 123, the
Company's net earnings and diluted earnings per share above would have been
reduced to the pro forma amounts below:
<PAGE>
<TABLE>
<CAPTION>
For the three months ending
December 31, 1998 1997
<S> <C> <C>
Net earnings
As reported $ 523,290 $ 405,408
Pro forma 409,364 236,744
Diluted earnings per share:
As reported $ .03 $ .03
Pro forma .03 .01
For the six months ending
December 31,
Net earnings
As reported $ 652,903 $1,776,289
Pro forma 522,606 1,466,193
Diluted earnings per share:
As reported $ .04 $ .11
Pro forma .03 .09
</TABLE>
The Company's basic earnings per share for the pro forma information noted
above is the same as the Company's diluted earnings per share for all the
periods disclosed.
(5) Earnings Per Share
The Company, as required under FASB Statement No. 128 Earnings Per Share (FAS
128) has replaced the presentation of primary earnings per share (EPS) with
Basic EPS and Diluted EPS. Under FAS 128 both the basic and diluted must be
presented in the financial statements. Also, under the FAS 128 all prior
period EPS data presented in the financial statements must be restated for
comparative purposes.
The diluted earnings per share for the three months ended December 31, 1998 and
1997 have been calculated based on 16,004,582 and 16,020,735 diluted shares
outstanding, respectively. The diluted earnings per share for the six months
ended December 31, 1998 and 1997 have been calculated based on 16,009,202 and
16,033,290, respectively. The Company's diluted earnings per share in the
financial statements above are the same as the basic earnings per share for
each of the periods disclosed.
<PAGE>
Part I MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Item 2.
Forward-looking Statements
Forward-looking statements in this Form 10-Q, future filings including but not
limited to, the Company's annual 10K, Proxy Statement, and 8K filings by the
Company with the Securities and Exchange Commission, the Company's press
releases and oral statements by authorized officers of the Company are intended
to be subject to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Investors are cautioned that all forward-
looking statements involve risks and uncertainty, including without limitation,
the risk of a significant natural disaster, the inability of the Company to
ensure against certain risks, the adequacy of its loss reserves, fluctuations
in commodity prices, change in market prices or demand for motor fuels and
ethanol, legislative changes regarding air quality, fuel specifications or
incentive programs, as well as general market conditions, competition and
pricing. The Company believes that forward-looking statements made by it are
based upon reasonable expectations. However, no assurances can be given that
actual results will not differ materially from those contained in such forward-
looking statements. The words "estimate", "anticipate", "expect", "predict",
"believe" and similar expressions are intended to identify forward-looking
statements.
Six Months Ended December 31, 1998 and 1997
Net Sales and Operating Expenses.
Net sales and revenues for the six months ended December 31, 1998, were higher
than net sales for the same period ended December 31, 1997. During the six
months ended December 31, 1998, approximately 32.7 million gallons of fuel
grade ethanol were sold at an average price of $1.06 per gallon compared to
25.5 million gallons sold at an average price of $1.13 per gallon, for the same
period ending December 31, 1997. In addition, approximately 1.0 million
gallons of industrial grade ethanol were sold at an average price of $1.36 per
gallon during the six months ended December 31, 1998 compared to approximately
1.5 million gallons sold at an average price of $1.34 per gallon for the same
period ending December 31, 1997. Fuel grade gallons sold during the six months
ended December 31, 1998 increased approximately 28% compared to the same period
in 1997 primarily as a result of increased production available for sale due to
approximately 5.8 million gallons of production from the Portales, New Mexico
facility. This facility began producing in March 1998.
Cost of products sold as a percentage of net sales and revenues was 95.1% and
92.7% for the six month periods ended December 31, 1998 and 1997, respectively.
The increase in the cost of products sold as a percentage of net sales and
revenues was primarily due to the decrease in the average sale price for fuel
grade ethanol offset by a decrease in average grain prices. The average cost
of grain declined to $2.14 per bushel for the six months ended December 31,
1998, down from $2.43 per bushel for the same period in 1997.
<PAGE>
Selling, general and administrative expenses increased 6.3% for the six months
ended December 31, 1998, compared to the same period ended December 31, 1997.
This increase is the result of an increase in administrative salary and benefit
expenses resulting from an increase in staff and changes in management and an
increase in investor relations expenditures.
Net Earnings.
Net earnings decreased 63.2% for the six months ended December 31, 1998,
compared to net earnings for the same period in 1997. Net earnings as a
percentage of net sales and revenues decreased from 4.0% to 1.3%. The decrease
is due to a decrease in the average sale price for ethanol in the 1998 period
compared to the same period in 1997 and an increase in income tax expense
primarily composed of deferred income taxes of $382,328 for the six months
ended December 31, 1998 compared to an income tax benefit of $59,953 for the
comparable period in 1997. Diluted earnings per share at December 31, 1998,
were 63.6% lower than diluted earnings per share for the same period in 1997
due to the decrease in net earnings.
MATERIAL CHANGES IN RESULTS AND OPERATIONS
Three Months Ended December 31, 1998 and 1997
Net Sales and Operating Expenses and Results of Operations.
Net sales and revenues for the three months ended December 31, 1998, increased
5.1% compared to the same period in 1997. During the quarter ended
December 31, 1998, approximately 15.6 million gallons of fuel grade ethanol
were sold at an average price of $1.11 per gallon compared to approximately
12.9 million gallons sold during the same period in 1997 at an average price
of $1.18 per gallon. Fuel grade gallons sold during the three months ended
December 31, 1998 increased approximately 21.0% compared to the same period in
1997 due to 3 million additional gallons of product available for sale produced
at the Portales, New Mexico facility which began production in March 1998. In
addition, approximately .4 million gallons of industrial grade ethanol were
sold at an average price of $1.17 per gallon during the three months ended
December 31, 1998, compared to .7 million gallons sold at an average price of
$1.51 per gallon in the same period in 1997.
Cost of products sold as a percentage of net sales and revenues was 92.6% and
94.6% for the three month periods ended December 31, 1998 and 1997,
respectively. The decrease in cost of products sold as a percentage of net
sales and revenues is primarily due to a decrease in the cost of grain offset
by a decrease in the average sale price for fuel grade ethanol. The average
cost of grain decreased 14.2% to $2.06 per bushel for the three months ended
December 31, 1998, down from $2.40 per bushel for the same period ended
December 31, 1997.
Selling, general and administrative expenses increased 10.8% for the three
months ended December 31, 1998, compared to the period ended December 31, 1997.
The increase was primarily due to an increase in expenditures for investor
relations and an increase in administrative salary expenses and benefits
resulting from an increase in staff and changes in management.
<PAGE>
Net Earnings.
Net earnings increased 29.1% for the three months ended December 31, 1998 from
the prior period in 1997. The increase in net earnings was due to the increase
in gross margin in the 1998 period compared to 1997 offset by the $307,328 in
income tax expense, which primarily consisting of deferred income taxes, for
the three months ended December 31, 1998 compared to $7,968 of income tax
expense for the three months ended December 31, 1997. Diluted earnings per
share for the three months ended December 31, 1998 were comparable to diluted
earnings per share for the three months ending December 31, 1997.
Liquidity and Capital Resources
The Company's primary source of funds during the second quarter of fiscal 1999
was cash flow from operations. At December 31, 1998, the Company had negative
working capital of ($6.7) million compared to a negative working capital of
approximately ($6.4) million at June 30, 1998. The decrease in the working
capital was primarily the net effect of an increase in trade accounts
receivable offset by an increase in inventories and an increase in borrowings
on the Company's lines-of-credit.
Capital expenditures in the first six months of fiscal 1998 amounted to
approximately $1.4 million for modifications at the Company's three plants
compared with approximately $5.9 million for the same period in fiscal 1997.
The fiscal 1997 expenditures included the $4 million acquisition of the
Portales, New Mexico facility.
In the opinion of management, the current liquidity position of the Company is
dependent upon its ability to renegotiate the existing financial agreements
with the Company's primary lender. The Company is seeking an expansion of its
existing lines-of-credit to provide additional working capital and is exploring
alternative financing arrangements through other financial institutions.
Should the Company be unable to restructure its existing financial
arrangements, the Company may seek additional funds through the sale of stock,
or issue debt and/or equity securities.
Funds expected to be generated from future operations will be negatively
affected after December 1999 due to the scheduled expiration of the Nebraska
production tax credit. The Company anticipates full utilization of this credit
for calendar 1999 by the third quarter of calendar 1999. However, there is
currently a bill pending before the Nebraska legislature to extend the
production tax credit but on a reduced per gallon rate.
Should this incentive not be extended, the Company's future operations in
Nebraska and its liquidity position could be substantially and negatively
affected. However, the Company continues to improve efficiencies, to implement
cost reduction plans, and is working to expand into more profitable high
quality markets to assist in improving the Company's liquidity and earnings.
<PAGE>
Seasonality
Fuel ethanol prices are historically stronger during the winter months due to
the mandated markets of the Federal Oxygen Program. Prices typically increase
in the weeks before September, and decrease by March due to shipping schedules.
These seasonal price increases again occurred in the fall and winter of fiscal
1999, although climbing to a lower peak than in fiscal 1998. The seasonal
decline in anticipation of summer pricing has also started earlier than usual,
with lower prices appearing in early February 1999. The Company believes this
decline is partially due to higher than normal levels of finished ethanol
inventory on hand compared to the prior year, but mostly due to the continued
low prices for gasoline. Gasoline prices are at twenty year record lows, and
since fuel ethanol replaces gasoline, changes in gasoline prices have
historically resulted in corresponding changes in the price paid for ethanol.
The Company has contracted to sell most of its production through March 1999,
at prices which management believes to be favorable. However, the Company
expects to contract sales at lower seasonal prices for the remainder of fiscal
1999.
The Company is currently exploring ways to reduce the impact of these seasonal
price changes, and is considering longer term fuel ethanol sales agreements
either at a fixed price or a variable price. Expansion into non-mandated
markets is also being pursued, as well as a new emphasis on the higher quality
industrial grade market, which is somewhat less seasonal. Another factor which
could affect demand, and to some extent reduce seasonal price fluctuations in
the industry, is the continuing effort to open the California market to
ethanol.
Grain feedstock prices continue to be very favorable for the ethanol industry.
After a modest rebound in corn prices during October and November of 1998,
prices have continued to decline to the ten year record low levels briefly seen
in the early fall of 1998. The decline in prices is in anticipation of another
large corn crop, as well as a large carryout, projected for the next crop year.
Many experts have predicted further softening of the corn market, but weather,
exports, and competing markets all have potentially major effects on the
ultimate prices. Pursuant to its risk management program, the Company has
contracted grain deliveries for all three plants for a substantial portion of
calendar 1999, and has priced most of its grain requirements into May 1999.
The remaining unpriced grain has been reserved in anticipation of potentially
lower pricing.
Prices for the Company's distillers grain by-products (DDGS), which
historically fluctuate with the price of corn, are currently substantially
lower than prices received during fiscal 1998. The feed ingredient market has
strengthened somewhat from the previous quarter, but is still quite soft due to
a continued oversupply of competing protein feeds in the marketplace. These
fluctuations in the price of DDGS are expected to provide some hedge for the
Company against the possibility of an increase in grain prices, although
perhaps not to the extent available in previous years.
Year 2000 Issues
The Company continues to assess its exposure to Year 2000 (Y2K) compliance
issues. In the manufacturing process, preliminary tests have demonstrated that
the main computer process systems continue to operate without interruption and
with no identifiable disruption to processing controls. The cost of purchasing
Y2K upgrades for this software, which the Company may acquire as part of its
routine upgrades and maintenance contracts is approximately $11,000.
<PAGE>
In addition, diagnostic procedures are on going at the plant level to identify
and test any imbedded technologies, which may also require some type of upgrade
or replacement due to the Y2K issue. This phase of the Company's Y2K
compliance program is expected to be completed during the second quarter of
calendar 1999. Due to insufficient information, the Company is currently
unable to estimate the impact on operations, if any, or estimate the cost for
potential Year 2000 issues related to imbedded chips and similar technologies.
During fiscal 1998, the Company upgraded its existing financial reporting
software to a Y2K compliant version, at a cost of approximately $5,000.
Upgrades to other existing financial software packages and PC hardware for
compliance with Year 2000 are estimated not to exceed approximately $10,000.
The Company has also begun the process of making inquiries and gathering
information regarding Y2K compliance exposures faced by its vendors and
customers. Management has insufficient information at this time to assess the
degree to which vendors and customers have addressed or are addressing Y2K
compliance issues, and to fully evaluate the risk of disruption to operations
that those businesses might face as a result of Year 2000 issues.
At December 31, 1998, the Company had not developed any contingency plans to
handle the most reasonably likely "worst case" scenarios. Due to the risk of
loss of certain utilities and the currently unknown status of the ability of
the utility companies to continue to supply needed services, the Company
expects to develop a contingency plan by mid-1999. Except for the services
previously noted, no major part or critical operation of any segment of the
Company's business is reliant on a single source for raw materials, supplies,
or services. Nonetheless, there can be no assurance that the Company will be
able to identify all Y2K compliance risks, or, that all contingency plans will
assure uninterrupted business operations across the millennium.
<PAGE>
PART II
OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
No new legal proceedings were instigated during the quarter ended December 31,
1998 which would be considered other than in the ordinary course of the
Company's business.
Item 2. CHANGES IN SECURITIES
Not applicable.
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its Annual Meeting of Stockholders on November 17, 1998. The
meeting involved the election of three directors, H.T. Ritchie, Daniel O.
Skolness and Arthur Greenberg.
<TABLE>
<CAPTION>
Voting results:
BROKER
FOR AGAINST ABSTENTIONS NONVOTES
<S> <C> <C> <C> <C>
H.T. Ritchie 10,493,815 185,808 -0- -0-
Daniel O. Skolness 10,493,815 185,808 -0- -0-
Arthur Greenberg 10,493,815 185,808 -0- -0-
</TABLE>
The following details the issues which were presented to stockholders for vote
and the results of that vote:
(1) Ratify the appointment of Allen, Gibbs & Houlik, LC as the Company's
independent public accountants.
<TABLE>
<CAPTION>
BROKER
RESULTS FOR AGAINST ABSTENTIONS NONVOTES
<S> <C> <C> <C> <C>
(1) 10,511,823 91,537 75,463 -0-
</TABLE>
<PAGE>
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
a). Exhibit 27-1 Financial Data Schedule
b). Reports on Form 8-K. During the quarter for which this
report is filed, the Company filed the following Form 8-K's:
October 19, 1998 Company announced first quarter earnings and earnings
per share for the period ending September 30, 1998.
October 26, 1998 Highlights of Gary R. Smith, President and CEO interview
on the Stock Traders' Network.
December 7, 1998 Company announced U.S. Department of Energy funded fuel
cell feasibility study at York, Nebraska facility.
<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:
HIGH PLAINS CORPORATION
Date February 16, 1999 /s/Gary R. Smith
President & CEO
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1999
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0
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