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<PAGE> 1
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 0-449
--------------------------------------------------------------------------------
FALL RIVER GAS COMPANY
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Massachusetts 04-1298780
--------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Indentification No.)
155 North Main Street, Fall River, Massachusetts 02722
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 508-675-7811
--------------------------------------------------------------------------------
"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 covered by this report.
Class Outstanding at June 30, 1995
------------------------------------ ------------------------------------
Common stock, par value of $.831\3 1,780,542 shares
<PAGE> 2
<TABLE>
FALL RIVER GAS COMPANY
----------------------
INDEX
-----
<CAPTION>
Page No.
--------
<S> <C>
Part I. Financial Position
Consolidated Condensed Balance Sheets -
June 30, 1995 and September 30, 1994 1
Consolidated Condensed Statements of Income -
Nine Months Ended June 30, 1995 and 1994 2
Consolidated Statements of Cash Flows -
Nine Months Ended June 30, 1995 and 1994 3
Management's discussion and Analysis of the
Consolidated Condensed Statements of Income 4
Notes to Consolidated Condensed Financial Statements 5
Part II. Other Information 5
</TABLE>
<PAGE> 3
<TABLE>
PART I. FINANCIAL INFORMATION
-------------------------------------
FALL RIVER GAS COMPANY AND SUBSIDIARY
-------------------------------------
CONSOLIDATED CONDENSED BALANCE SHEETS
-------------------------------------
<CAPTION>
JUNE 30, SEPTEMBER 30,
ASSETS 1995 1994
------ ----------- -------------
<S> <C> <C>
Gas Plant, at original cost $51,801,728 $48,902,815
less accumulated depreciation 16,859,814 15,689,848
----------- -----------
34,941,914 33,212,967
----------- -----------
Rental Property 4,805,469 4,688,718
less accumulated depreciation 2,233,118 2,361,987
----------- -----------
2,572,351 2,326,731
----------- -----------
Other Investments 289,015 241,239
----------- -----------
Current Assets:
Cash 159,860 84,798
Interest-bearing deposits 379,126 276,020
Special deposits 170,700 170,700
Accounts receivable, less allowance for
doubtful accounts of $897,945 as of
6/30/95 and $701,734 as of 9/30/94 3,942,405 2,652,006
Inventories, at average cost
Merchandise 213,909 169,279
Liquefied natural gas and propane 2,006,048 2,906,790
Materials and Supplies 1,111,492 1,027,390
Purchased gas costs deferred 1,594,876 4,596,819
Prepayments 75,807 25,188
----------- -----------
9,654,223 11,908,990
----------- -----------
Deferred Charges:
Installation costs on leased appliances
being amortized over twenty years 1,245,686 1,128,313
Regulatory Asset 343,290 343,290
Other 421,413 464,312
----------- -----------
2,010,389 1,935,915
----------- -----------
$49,467,892 $49,625,842
=========== ===========
STOCKHOLDERS' INVESTMENT AND LIABILITIES
----------------------------------------
CAPITALIZATION:
Stockholders' investment-
Common stock par value $.83-1/3 per share,
2,201,334 shares authorized and issued $ 1,834,445 $ 1,834,445
Premium paid in on common stock 1,356,043 1,356,043
Retained earnings ($4,374,576 restricted
against payment of cash dividends as
of 6/30/95 and 9/30/94) 11,905,618 11,242,375
----------- -----------
15,096,106 14,432,863
Less Treasury stock at cost (420,792 shares
as of 6/30/95) 1,418,743 1,418,743
----------- -----------
13,677,363 13,014,120
----------- -----------
Long-term debt, less current sinking
fund requirements
First Mortgage Bonds-8-3/4% Series due 1996 720,000 880,000
-9.44% due 2020 6,500,000 6,500,000
----------- -----------
7,220,000 7,380,000
----------- -----------
Total capitalization 20,897,363 20,394,120
----------- -----------
CURRENT LIABILITIES:
Current sinking fund requirements 160,000 160,000
Notes payable to banks 12,100,000 14,400,000
Accounts Payable 3,543,860 3,273,832
Gas supplier refunds due customers 1,477,020 1,130,603
Accrued taxes 2,202,717 1,499,233
Other 2,222,491 1,955,368
----------- -----------
21,706,088 22,419,036
----------- -----------
DEFERRED CREDITS:
Accumulated deferred income taxes 3,630,933 3,630,933
Unamortized investment tax credits 615,167 643,702
Regulatory Liability 843,378 843,378
Other 1,774,963 1,694,673
----------- -----------
6,864,441 6,812,686
----------- -----------
$49,467,892 $49,625,942
=========== ===========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
1
<PAGE> 4
<TABLE>
SUMMARIZED FINANCIAL INFORMATION
-----------------------------------------------
FALL RIVER GAS COMPANY AND SUBSIDIARY
-----------------------------------------------
CONSOLIDATED CONDENSED STATEMENTS OF INCOME AND RETAINED EARNINGS
-----------------------------------------------------------------
<CAPTION>
Three Months Ended Nine Months Ended
June 30 June 30
----------------------------- ----------------------------
1995 1994 1995 1994
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
GAS OPERATING REVENUES $ 9,857,712 $ 9,583,817 $39,330,773 $43,162,611
----------- ----------- ----------- -----------
OPERATING EXPENSES
Cost of gas sold 6,221,649 5,978,278 25,100,928 28,197,160
Other operation 2,237,200 2,285,328 7,151,292 7,270,046
Maintenance 487,696 434,216 1,477,861 1,306,910
Depreciation 300,860 268,902 1,398,999 1,250,392
General taxes 244,054 262,140 1,050,512 1,132,139
Federal income taxes (8,372) 23,044 680,486 1,061,194
----------- ----------- ----------- -----------
Total operating expenses 9,483,087 9,251,908 36,860,078 40,217,841
----------- ----------- ----------- -----------
OPERATING INCOME 374,625 331,909 2,470,695 2,944,770
OTHER INCOME:
Net income of Fail River Gas Appliance
Company, Inc. (a wholly-owned subsidiary) 220,542 209,998 537,975 551,809
Other 5,294 5,044 14,555 12,447
----------- ----------- ----------- -----------
GROSS INCOME 600,461 546,951 3,023,225 3,509,026
----------- ----------- ----------- -----------
INTEREST EXPENSE AND OTHER:
Interest on long-term debt 174,400 177,899 524,950 535,012
Other interest 193,033 86,281 553,039 279,127
----------- ----------- ----------- -----------
367,433 264,180 1,077,989 814,139
----------- ----------- ----------- -----------
NET INCOME 233,028 282,771 1,945,236 2,694,887
RETAINED EARNINGS- BEGINNING OF PERIOD 12,527,253 12,480,992 11,242,375 10,496,206
ADD - Dividends declared
September 20, 1994 and
September 21, 1993, payable
November 15, 1994 and 1993 0 0 427,330 418,427
DEDUCT- Dividends paid on
Common Stock 427,330 462,940 1,281,990 1,308,697
Declared Payable August 15, 1995 and 1994 427,330 427,330 427,330 427,330
----------- ----------- ----------- -----------
RETAINED EARNINGS - END OF PERIOD
($4,374,576 restricted against payment of
cash dividends as of 6/30/95 and 6/30/94) 11,905,621 11,873,493 11,905,621 11,873,493
=========== =========== =========== ===========
NET INCOME PER SHARE OF COMMON STOCK (based on
average number of shares outstanding at the
end of the respective periods) 0.13 0.16 1.09 1.51
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING DURING THE PERIOD 1,750,542 1,780,542 1,780,542 1,780,542
CASH DIVIDEND PER COMMON SHARE 0.24 0.24 0.72 0.74
=========== =========== =========== ===========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
2
<PAGE> 5
<TABLE>
FALL RIVER GAS COMPANY AND SUBSIDIARY
-------------------------------------
CONSOLIDATED STATEMENT OF CASH FLOWS
------------------------------------
<CAPTION>
Nine Months Ended June 30
-----------------------------------
1995 1994
--------------- --------------
<S> <C> <C>
Cash Provided by (used for)
Operating Activities:
Net income $ 1,945,236 $ 2,694,887
Items not requiring (providing) cash:
Depreciation 1,643,755 1,484,557
Amortization of Installation Costs 82,989 78,867
Amortization of Investment Tax CredIt (28,535) (28,833)
Change in working capital 4,019,987 4,591,645
Other sources, net (262,139) (391,800)
------------ -------------
Net cash provided by
operating activities 7,401,293 8,429,323
------------ -------------
Investing Activities:
Additions to utility property, plant and equipment (3,003,284) (2,508,604)
Additions to nonutility property (477,851) (403,197)
------------ -------------
Net cash used by investing activities (3,481,135) (2,911,801)
------------ -------------
Financing activities:
Cash dividends on common stock (1,281,990) (1,317,601)
Retirement of long-term debt through sinking fund (160,000) (180,000)
Increase (Decrease) in notes payable to banks, net (2,300,000) (4,100,000)
------------ -------------
Net cash provided by (used for)
financing activities (3,741,990) (5,597,601)
------------ -------------
Increase (Decrease) in cash $ 178,168 $ (80,079)
------------ -------------
Changes in Components of Working Capital
(excluding cash)
(Increase) decree in current assets:
Accounts receivable $ (1.290,399) $ (1,283,080)
Inventories 772,010 1,767,637
Prepayments and other (50,619) (34,398)
Deferred gas cost 3,001,943 1,462,531
Increase (decrease) in current liabilIties:
Accounts payable 270,028 (139,972)
Accrued taxes 703,464 2,422,196
Gas supplier refunds due customers 346,417 (254,146)
Other 267,123 650,877
------------ -------------
Change in Working Capital $ 4,019,987 $ 4,591,645
============ =============
Supplemental disclosure of cash flow information:
Cash paid during year for:
Interest $ 697,919 $ 509,080
Income taxes $ 433,052 $ 948,191
</TABLE>
See accompanying notes to consolidated condensed financial statements.
3
<PAGE> 6
FALL RIVER GAS COMPANY AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS
Results of Operations
Gas operating revenues for the nine months ended June 30, 1995 reflect
a decrease of 8.9% or $3,832,000. Revenues fell from $43,163,000 recorded in
1994 to $39,331,000, mainly due to a 15% decrease in firm sales volume. Firm
sales volume for nine months ended June 30, 1995 is 5,091,668 MCF as compared
to the 5,991,050 MCF reported in 1994. Along with the fall of firm sales,
total sales for the nine month period which include Special Contract and
Transportation customers, decreased 5.3% from 6,626,900 MCF to 6,274,220 MCF in
1995. Although having a higher CGAC decimal than the comparable quarter in
1994, the nine months revenues from the Cost of Gas Adjustment Clause (CGAC)
and the embedded cost of gas in the base rate decreased by $4,295,000. The
decrease in revenues in the last nine months is directly related to the
continuing transfer of Firm customers to Special Contract and Transportation
customers. Revenues from these customers are not included in the CGAC revenues
nor part of the embedded cost of gas revenues. In accordance with the
Company's approved CGAC increases or decreases in the cost of gas sold continue
to be passed directly to our Firm customers, dollar for dollar. Warmer weather
is another factor in the decrease of operating revenues and firm sales volume.
Degree Days in the nine month comparison decreased 9.0% from 6,124 to 5,575.
During the third quarter of 1995 a higher CGAC decimal than the prior
year's quarter has been approved, increasing gas operating revenues by 2.9%.
Revenues increased $274,000 higher than the comparable three months in 1994,
even though Firm sales volumes decreased 5.6%, from 1,274,601 in 1994 to
1,199,502 in 1995. Due to the transfer of Firm customers, as stated earlier,
along with the higher CGAC decimal the decrease of Firm sales volume for the
quarter did not have a negative effect on revenues collected. Also aiding
operating revenues was a 19% increase in Degree Days for the quarter, from 724
in 1994 to 862 in 1995.
Total operating expenses, excluding federal and state income taxes,
for the nine month comparisons reflected a 7.4% decrease from $38,934,000 to
$36,035,000, a decrease of $2,899,000. The most significant operation expense
- cost of gas sold - decreased by $3,096,000 for the nine month comparison due
to the decrease in Firm sales volume discussed above. Other operation expenses
including health benefits, payroll, and materials and supplies have decreased
by $119,000, 1.6% lower for the nine month comparisons.
Operating expenses, excluding federal and state income taxes, for the
three month comparison increased 2.9% from $9,222,000 in 1994 to $9,491,000 in
1995, an increase of $269,000, principally due to a $243,000 increase in cost
of gas sold.
Interest expense increased by $264,000, 3.2%, for the nine month
comparison and $103,000, 3.9%, for the three month comparison as a result of
increased borrowing and higher short term interest cost.
<PAGE> 7
Capital Resources and Liquidity
The Company's major capital requirement results from upgrading the
efficiency of existing plant, as well as, to serve additional customers. For
the nine months ended June 30, 1995, capital expenditures totalled
approximately $3,100,000.
Cash flow patterns reflect the seasonality of the Company's business.
The greatest demand for cash is in the late fall and winter as construction
projects are brought to completion and accounts receivable balances rise.
Capital expenditures and accounts receivable balances were financed by
internally generated funds and supplemented by short-term borrowings.
See accompanying notes to consolidated financial statements
4
<PAGE> 8
FALL RIVER GAS COMPANY AND SUBSIDIARY
-------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
1. The results of operation for the nine month periods ending June 30,
1995 and 1994 are not necessarily indicative of the results to be
expected for the full year.
2. In the opinion of the Company, the accompanying unaudited consolidated
condensed financial statements contain all adjustments (consisting of
only normal recurring accruals) necessary to present fairly the
Company's financial position as of June 30, 1995 and 1994, and the
results of operations for the nine months ended and changes in
financial position for the nine months then ended.
3. The Company had no shares of its common stock reserved for officers
and employees, options, warrants, conversions or other requirements
at June 30, 1995.
PART II. OTHER INFORMATION
---------------------------
Not applicable.
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.
FALL RIVER GAS COMPANY
--------------------------
(Registrant)
Peter H. Thanas
--------------------------
(Signature)
Date August 8, 1995 Peter H. Thanas, Treasurer,
----------------- Chief Financial and
Accounting Officer
5
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS OF FALL RIVER GAS COMPANY FOR THE
PERIOD ENDED JUNE 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> JUN-30-1995
<EXCHANGE-RATE> 1
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 34,941,914
<OTHER-PROPERTY-AND-INVEST> 2,861,366
<TOTAL-CURRENT-ASSETS> 9,654,223
<TOTAL-DEFERRED-CHARGES> 2,010,389
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 49,467,892
<COMMON> 1,834,445
<CAPITAL-SURPLUS-PAID-IN> 1,356,043
<RETAINED-EARNINGS> 11,905,618
<TOTAL-COMMON-STOCKHOLDERS-EQ> 15,096,106
0
0
<LONG-TERM-DEBT-NET> 7,220,000
<SHORT-TERM-NOTES> 12,100,000
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 160,000
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 14,891,786
<TOT-CAPITALIZATION-AND-LIAB> 49,467,892
<GROSS-OPERATING-REVENUE> 39,330,773
<INCOME-TAX-EXPENSE> 1,730,998
<OTHER-OPERATING-EXPENSES> 35,129,080
<TOTAL-OPERATING-EXPENSES> 36,860,078
<OPERATING-INCOME-LOSS> 2,470,695
<OTHER-INCOME-NET> 552,530
<INCOME-BEFORE-INTEREST-EXPEN> 3,023,225
<TOTAL-INTEREST-EXPENSE> 1,077,989
<NET-INCOME> 1,945,236
0
<EARNINGS-AVAILABLE-FOR-COMM> 7,531,045
<COMMON-STOCK-DIVIDENDS> 1,281,990
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 7,401,293
<EPS-PRIMARY> 1.09
<EPS-DILUTED> 1.09
</TABLE>
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