<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 December 31, 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
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 508-675-7811
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"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 December 31,1995
-------------------------------------------------------------------------
Common stock,par value of $.83 1\3 1,780,542 shares
<PAGE> 2
FALL RIVER GAS COMPANY
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Part. I. Financial Position
Consolidated Condensed Balance Sheets -
December 31, 1995 and September 30, 1995 1
Consolidated Condensed Statements of Income -
Three Months Ended December 31, 1995 and 1994 2
Consolidated Statments of Cash Flows -
Three Months Ended December 31, 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
PART I. FINANCIAL INFORMATION
FALL RIVER GAS COMPANY AND SUBSIDIARY
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1995 1995
------------ -------------
<S> <C> <C>
ASSETS
------
Gas Plant, at original cost $54,063,863 $52,770,211
less accumulated depreciation 16,693,552 16,561,747
----------- -----------
37,370,311 36,208,464
----------- -----------
Rental Property 4,918,576 4,852,644
less accumulated depreciation 2,238,159 2,239,952
----------- -----------
2,680,417 2,612,692
----------- -----------
Other Investments 342,674 320,354
----------- -----------
Current Assets:
Cash 209,365 112,124
Interest-bearing deposits 266,685 203,185
Special deposits 142,000 170,700
Accounts receivable, less allowance for
doubtful accounts of $917,216 as of
12/31/95 and $953,365 as of 9/30/95 5,503,736 2,159,172
Inventories, at average cost
Merchandise 138,404 203,597
Liquefied natural gas and propane 2,544,176 2,754,655
Materials and Supplies 1,173,917 1,182,645
Purchased gas costs deferred 3,347,547 2,808,882
Prepayments 243,461 18,947
----------- -----------
13,569,291 9,613,907
----------- -----------
Deferred Charges:
Installation costs on leased appliances
being amortized over twenty years 1,202,366 1,216,877
Regulatory Asset 527,025 527,025
Other 278,408 457,189
----------- -----------
2,007,799 2,201,091
----------- -----------
$55,970,492 $50,956,508
=========== ===========
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 12/31/95 and 9/30/95) 11,243,258 11,149,260
----------- -----------
14,433,746 14,339,748
Less Treasury stock, at cost (420,792
shares as of 12/31/95) 1,418,743 1,418,743
----------- -----------
13,015,003 12,921,005
----------- -----------
Long-term debt, less current sinking
fund requirements
First Mortgage Bonds--9.44% due 2020 6,500,000 6,500,000
----------- -----------
6,500,000 6,500,000
----------- -----------
Total capitalization 19,515,003 19,421,005
----------- -----------
CURRENT LIABILITIES:
Current sinking fund requirements 800,000 880,000
Notes payable to banks 19,600,000 15,600,000
Accounts Payable 5,761,667 3,585,300
Gas supplier refunds due customers 965,664 1,367,969
Accrued taxes 293,472 838,618
Other 1,636,978 1,893,347
----------- -----------
29,057,781 24,165,234
----------- -----------
DEFERRED CREDITS:
Accumulated deferred income taxes 3,905,118 3,905,118
Unamortized investment tax credits 596,164 605,653
Regulatory liability 1,027,113 1,027,113
Other 1,869,313 1,832,385
----------- -----------
7,397,708 7,370,269
----------- -----------
$55,970,492 $50,956,508
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
1
<PAGE> 4
SUMMARIZED FINANCIAL INFORMATION
FALL RIVER GAS COMPANY AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF INCOME AND RETAINED EARNINGS
<TABLE>
<CAPTION>
Three Months Ended
December 31
--------------------------
1995 1994
---------- -----------
<S> <C> <C>
GAS OPERATING REVENUES 11,454,602 9,989,787
---------- ----------
OPERATING EXPENSES
Cost of gas sold 7,198,222 6,076,718
Other operation 2,850,678 2,304,353
Maintenance 524,765 583,128
Depreciation 358,480 330,946
General taxes 246,341 232,678
Federal income taxes (61,323) 32,907
---------- ----------
Total operating expenses 11,117,163 9,560,730
---------- ----------
OPERATING INCOME 337,439 429,057
OTHER INCOME:
Net income of Fall River Gas Appliance
Company, Inc. (a wholly-owned subsidiary) 187,783 170,026
Other (73) 4,125
---------- ----------
GROSS INCOME 525,149 603,208
---------- ----------
INTEREST EXPENSE AND OTHER:
Interest on long-term debt 172,650 176,150
Other interest 258,500 164,477
---------- ----------
431,150 340,627
---------- ----------
NET INCOME 93,999 262,581
RETAINED EARNINGS - BEGINNING OF PERIOD 11,149,260 11,242,375
DEDUCT - Dividends declared 0 0
---------- ----------
RETAINED EARNINGS - END OF PERIOD
($4,374,576 restricted against payment of
cash dividends as of 12/31/95 and 12/31/94) 11,243,259 11,504,956
========== ==========
NET INCOME PER SHARE OF COMMON STOCK (based on
average number of shares outstanding at the
end of the respective periods) 0.05 0.15
========== ==========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING DURING THE PERIOD 1,780,542 1,780,542
CASH DIVIDEND PER COMMON SHARE 0 0
========== ==========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
2
<PAGE> 5
FALL RIVER GAS COMPANY AND SUBSIDIARY
------------------------------------------------
CONSOLIDATED STATEMENT OF CASH FLOWS
------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended
December 31
-----------------------------------
1995 1994
----------- -----------
<S> <C> <C>
Cash Provided by (used for)
Operating Activities:
Net income $ 93,998 $ 262,582
Items not requiring (providing) cash:
Depreciation 429,785 417,645
Amortization of Installation Costs 31,839 27,663
Amortization of Investment Tax Credit (9,489) (9,511)
Change in working capital (2,822,096) (2,364,641)
Other sources, net 102,818 (123,472)
----------- -----------
Net cash provided by
operating activities (2,173,145) (1,789,734)
----------- -----------
Investing Activities:
Additions to utility property, plant and equipment (1,451,260) (1,028,933)
Additions to nonutility property (134,854) (208,757)
----------- -----------
Net cash used by investing activities (1,586,114) (1,237,690)
----------- -----------
Financing activities:
Cash dividends on common stock 0 0
Retirement of long-term debt through sinking fund (80,000) (80,000)
Increase in notes payable to banks, net 4,000,000 3,500,000
----------- -----------
Net cash provided by
financing activities 3,920,000 3,420,000
----------- -----------
Increase in cash $ 160,741 $ 392,576
=========== ===========
Changes in Components of Working Capital
(excluding cash)
(Increase) decrease in current assets:
Accounts receivable $(3,344,564) $(2,038,957)
Inventories 284,400 (340,464)
Prepayments and other (195,814) (177,818)
Deferred gas cost (538,665) (823,931)
Increase (decrease) in current liabilities:
Accounts payable 2,176,367 (111,821)
Accrued taxes (545,146) 175,110
Gas supplier refunds due customers (402,305) 1,164,017
Other (256,369) (210,777)
----------- -----------
Change in Working Capital $(2,822,096) $(2,364,641)
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid during year for:
Interest $ 331,404 $ 284,816
Income taxes $ 590,000 $ 70,000
</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 three months ended December 31, 1995
reflect an increase of 14.6% or $1,465,000. Revenues increased from $9,990,000
recorded in 1994 to $11,455,000, mainly due to a 15.7% increase in firm sales
volume. Firm sales volume for three months ended December 31, 1995 is 1,423,974
MCF as compared to the 1,230,332 MCF reported in 1994. Along with the rise of
firm sales, total sales for the three month period which include Special
Contract, Interruptible, and Transportation customers, increased 13.4% from
1,597,768 MCF to 1,812,206 MCF in 1995. During the quarter cost of gas (CGA)
revenues increased by $104,000 due to the net differences in our CGA decimal in
the three months ended December 1995 and 1994 respectively. 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. Colder
weather is a large factor in the increase of operating revenues and firm sales
volume. Degree Days in the three month comparison increased 14.8% from 1,802 to
2,070.
Total operating expenses, excluding federal and state income taxes, for
the three month comparisons reflected a 17.5% increase from $9,519,000 to
$11,189,000 an increase of $1,670,000. The most significant operation expense -
cost of gas sold - increased by $1,122,000 for the three month comparison due to
the increase in Firm sales volume discussed above. Other operation expenses
including health benefits, payroll, and materials and supplies have increased by
$546,000, 23.7% higher than the comparable period in 1994.
Interest expense increased by $91,000, 26.5%, for the three month
comparison as a result of increased borrowing and higher short term interest
cost.
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
three months ended December 31, 1995, capital expenditures totalled
approximately $1,500,000.
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> 7
FALL RIVER GAS COMPANY AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The results of operation for the three month periods ending December 31,
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 December 31, 1995 and 1994, and the results of
operations for the three months ended and changes in financial position for
the three 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 December
31, 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 January 31, 1996 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 BALANCE
SHEET, INCOME STATEMENT, AND CASH FLOW STATEMENT FOR THE 3 MONTHS ENDED DECEMBER
31, 1995. AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH NOTES TO
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS APPEARING ON PAGE 5 OF FORM 10-Q FOR
3 MONTHS ENDED DECEMBER 31, 1995.
</LEGEND>
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> DEC-31-1995
<EXCHANGE-RATE> 1
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 37,370,311
<OTHER-PROPERTY-AND-INVEST> 3,023,091
<TOTAL-CURRENT-ASSETS> 13,569,291
<TOTAL-DEFERRED-CHARGES> 2,007,799
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 55,970,492
<COMMON> 1,834,445
<CAPITAL-SURPLUS-PAID-IN> 1,356,043
<RETAINED-EARNINGS> 11,243,258
<TOTAL-COMMON-STOCKHOLDERS-EQ> 14,433,746
0
0
<LONG-TERM-DEBT-NET> 6,500,000
<SHORT-TERM-NOTES> 19,600,000
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 800,000
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 14,636,746
<TOT-CAPITALIZATION-AND-LIAB> 55,970,492
<GROSS-OPERATING-REVENUE> 11,454,602
<INCOME-TAX-EXPENSE> 185,018
<OTHER-OPERATING-EXPENSES> 10,932,145
<TOTAL-OPERATING-EXPENSES> 11,117,163
<OPERATING-INCOME-LOSS> 337,439
<OTHER-INCOME-NET> 187,710
<INCOME-BEFORE-INTEREST-EXPEN> 525,149
<TOTAL-INTEREST-EXPENSE> 431,150
<NET-INCOME> 93,999
0
<EARNINGS-AVAILABLE-FOR-COMM> 6,868,683
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> (2,173,145)
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
