Page 1 of 9
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1995
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 0-11431
New Energy Company of Indiana Limited Partnership
(formerly, New Energy Company of Indiana)
(Exact name of registrant as specified in its charter)
Indiana 52-1195762
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3201 West Calvert Street, South Bend, Indiana 46613
(Address of principal executive offices)
(Zip Code)
219-233-3116
(Registrant's telephone number, including area code)
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 _
Page 2 of 9
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
NEW ENERGY COMPANY OF INDIANA LIMITED PARTNERSHIP
BALANCE SHEETS
JUNE 30, 1995 DECEMBER 31, 1994
Assets (UNAUDITED) (AUDITED)
Current assets:
Cash and cash equivalents $ 10,229,960 $ 8,879 804
Accounts receivable 7,208,222 8,025,818
Other receivables 266,659 77,952
Inventories 3,929,585 4,453,276
Spare parts 2,646,717 2,611,001
Prepaid expenses and other 583,837 346,247
Total current assets 24,864,980 24,394,098
Property, plant and equipment 159,225,051 159,159,336
Accumulated depreciation (deduction) (132,771,342) (131,470,902)
26,453,709 27,688,434
Total assets $ 51,318,689 $ 52,082,532
=========== ===========
Liabilities and partners'
capital deficit
Current liabilities:
Accounts payable $ 3,382,591 $ 3,204,488
Interest payable 47,809 342,522
Taxes payable 1,658,602 1,642,124
Other accrued liabilities 1,540,011 905,467
Current portion of long-term debt 12,009,976 12,795,098
Total current liabilities 18,638,989 18,889,699
Deferred management fees payable
to General Partner 0 1,100,188
Long-term debt, less current portion 61,860,393 68,996,610
Partners' capital (deficit):
General Partner (4,500,919) (5,273,246)
Limited Partners (25,156,727) (32,107,672)
Special Limited Partner 5,000,000 5,000,000
Syndication costs (4,523,047) (4,523,047)
Total Partners' capital deficit (29,180,693) (36,903,965)
Total liabilities and ___________ ___________
Partners' capital deficit $ 51,318,689 $ 52,082,532
=========== ===========
See notes to financial statements.
Page 3 of 9
NEW ENERGY COMPANY OF INDIANA LIMITED PARTNERSHIP
STATEMENTS OF OPERATION
<TABLE>
THREE THREE SIX SIX
MONTHS ENDED MONTHS ENDED MONTHS ENDED MONTHS ENDED
JUNE 30, 1995 JUNE 30, 1994 JUNE 30, 1995 JUNE 30, 1994
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net sales, ethanol $ 27,473,215 $ 24,099,318 $ 53,335,830 $ 46,497,510
By-product revenue 6,719,530 7,858,741 13,885,935 15,951,651
34,192,745 31,958,059 67,221,765 62,449,161
Cost of goods sold 27,641,903 31,209,853 53,744,849 63,769,267
Gross profit (loss) 6,550,842 748,206 13,476,916 (1,320,106)
Selling, general and
administrative expenses 1,947,724 1,936,797 3,854,730 3,850,100
Income (loss) from operations 4,603,118 (1,188,591) 9,622,186 (5,170,206)
Loss on disposal of assets 0 (6,624) 0 (6,624)
Interest income 172,691 48,477 295,686 121,851
Interest expense (1,093,461) (1,045,601) (2,194,600) (2,295,651)
Net income (loss) $ 3,682,348 $ (2,192,339) 7,723,272 $ (7,350,630)
========== ========== ========= ===========
Net income (loss) allocable to
Limited Partners $ 3,314,113 $ (1,973,105) $ 6,950,945 $ (6,615,567)
========== ========== ========= ===========
Limited Partner units
outstanding 6,400 6,400 6,400 6,400
========== ========== ========== ===========
Net income (loss) per unit $ 518 $ (308) $ 1,086 $ (1,034)
========== ========== =========== ===========
See notes to financial statements.
</TABLE>
Page 4 of 9
NEW ENERGY COMPANY OF INDIANA LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
<TABLE>
SIX SIX
MONTHS ENDED MONTHS ENDED
JUNE 30, 1995 JUNE 30, 1994
(UNAUDITED) (UNAUDITED)
<S>
Operating activities <C> <C>
Net income (loss) $ 7,723,272 $ (7,350,630)
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities:
Depreciation and amortization 1,300,440 6,723,030
Increase (decrease) in deferred
management fees payabe to
General Partner 321,098 312,572
Increase in accrued interest on
General Partner loan 265,226 268,053
Loss on disposal of assets 0 6,624
Increase (decrease) due to changes
in operating assets and liabilities:
Accounts and other receivables 628,889 (1,811,959)
Inventories 523,691 1,748,380
Spare parts (35,716) (73,666)
Prepaid expenses and other (237,590) (58,981)
Accounts payable 178,103 291,279
Interest payable (294,713) (205,063)
Taxes payable 16,478 (10,045)
Other accrued liabilities 634,544 583,846
Net cash provided by (used in) operating
activities 11,023,722 423,440
Investing activities
Purchase of property and equipment (65,715) (89,307)
Net cash used in investing activities (65,715) (89,307)
Financing activities
Payments of deferred management fees
to General Partner (1,421,286) (200,000)
Payments of long-term debt (8,186,565) (3,396,083)
Capital contributions from Limited
Partners 0 600
Net cash used in financing activities (9,607,851) (3,595,483)
Increase (decrease) in cash and cash
equivalents 1,350,156 (3,261,350)
Cash and cash equivalents, beginning of
period 8,879,804 10,137,036
Cash and cash equivalents, end of period $10,229,960 $ 6,875,686
========== ==========
See notes to financial statements.
</TABLE>
Page 5 of 9
New Energy Company of Indiana Limited Partnership
Notes to Financial Statements
For the Quarter Ended June 30, 1995 (Unaudited)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited condensed financial statements have
been prepared in accordance with generally accepted accounting
principles for interim financial information and with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. For further
information, refer to the financial statements and footnotes
thereto included in the Company's annual report on Form 10-K for
the year ended December 31, 1994.
2. INVENTORIES
Inventories consist of raw materials (corn, coal, unleaded
gasoline and chemicals), work-in-process and finished goods (fuel
grade ethanol and DDGS). A summary of inventories by classifica-
tion follows:
June 30, 1995 December 31, 1994
Raw materials $2,351,230 $2,251,812
Work-in-process 522,102 434,505
Finished goods 1,056,253 1,766,959
$3,929,585 $4,453,276
========= =========
For the years 1994 and 1995, the Company executed contracts with a
grain supplier to provide its expected corn requirements at a price
which may fluctuate with the commodity prices or be fixed at the
Company's election. As of July 31, 1995 the Company has fixed the price
for all corn purchases through December 31, 1995.
Page 6 of 9
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
On December 23, 1991, the Department of Energy promissory note was
restructured by the execution of an Amended and Restated Loan
Restructuring Agreement (Restructuring Agreement) consisting of two
new promissory notes, Note A and Note B. Note A, in the amount of
$55,000,000, provides for 119 consecutive monthly installments of
interest and principal of $631,533 commencing April 30, 1992. Note A
provides for a fixed rate of interest of 6.75% per annum. Note B, in
the amount of $40,622,523, provides for a fixed rate of interest of
4.00% per annum. Payments of Note B are based upon monthly cash flow
as defined by the Restructuring Agreement. Based upon present facts
and circumstances, management has estimated that principal payments of
approximately $6,943,606 will be made during fiscal 1995, under the terms of
Note B.
On a long-term basis, the Company's ability to maintain sufficient
liquidity to meet its debt service and other obligations will depend
to a large extent upon favorable market price levels for corn and
ethanol; factors over which the Company has little control. However,
through its corn purchasing agreement and its strategy to excute
long-term ethanol sales contracts, the Company is attempting to
minimize its exposure to fluctuations in the corn and gasoline
markets. The Company anticipates that it will have sufficient
liquidity to meet demands in fiscal 1995.
RESULTS OF OPERATIONS
For the three months ended June 30, 1995, the Company generated
income of $3,682,348 as compared to a loss of $2,192,339 for the three
months ended June 30, 1994. The income generated during the three
months ended June 30, 1995, was primarily due to lower corn costs, a
decrease in depreciation expense and an increase in the price and
volume of ethanol sold.
Revenue from the sale of ethanol increased during the three months
ended June 30, 1995, to $27,473,215 from $24,099,318 during the three
months ended June 30, 1994. This increase was primarily due to an
increase in the price and volume of ethanol sold.
Revenue from the sale of by-products decreased during the three months
ended June 30, 1995, to $6,719,530 from $7,858,741 during the three
months ended June 30, 1994. The decline in by-product revenue was
primarily due to a significant decrease in the selling price of DDGS,
partially offset by an increase in the volume of DDGS produced and sold.
Ethanol production totaled 22,228,129 gallons for the three months
ended June 30, 1995, as compared to 20,850,918 gallons for the three
months ended June 30, 1994. This increase was primarily due to better
efficiency in the ethanol production process. The plant also produced
Page 7 of 9
71,484 tons of distillers dried grains and 43,654 tons of gaseous carbon
for the three months ended June 30, 1995, as compared to 64,747 tons of
distillers dried grains and 41,005 tons of gaseous carbon dioxide for
the three months ended June 30, 1994. Distillers dried grains and
gaseous carbon dioxide are by-products of the ethanol production process.
Cost of goods sold decreased by $3,567,950 during the three months
ended June 30, 1995, compared to the same period in 1994, primarily due
to reduced corn costs and depreciation expense.
For the six months ended June 30, 1995, the Company generated income of
$7,723,272 as compared to a loss of $7,350,630 for the six months ended
June 30, 1994. The income generated was primarily due to lower corn costs,
a decrease in depreciation expense and an increase in the price and
volume of ethanol sold.
Revenue from the sale of ethanol increased during the six months ended June
30, 1995, to $53,335,830 from $46,497,510 during the six months ended June
30, 1994. This increase was primarily due to an increase in the price
and volume of ethanol sold.
Revenue from the sale of by-products decreased during the six months
ended June 30, 1995, to $13,885,935 from $15,951,651 during the six
months ended June 30, 1994. This decrease in by-product revenue was
primarily due to a significant decrease in the selling price of DDGS,
partially offset by an increase in the volume of DDGS produced and sold.
Ethanol production totaled 43,938,174 gallons for the six months ended
June 30, 1995, as compared to 41,615,771 gallons for the six months ended
June 30, 1994. This increase was primarily due to better efficiency in
the ethanol production process. The plant also produced 140,243 tons of
distillers dried grains and 83,733 tons of gaseous carbon dioxide for the
six months ended June 30, 1995, as compared to 129,039 tons of distillers
dried grains and 80,794 tons of gaseous carbon dioxide for the six months
ended June 30, 1994.
Cost of goods sold decreased by $10,024,418 during the six months ended
June 30, 1995, compared to the same period in 1994, primarily due to reduced
corn costs and depreciation expense.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not party to any material legal proceedings
other than routine litigation incidental to its business.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
A.) Exhibits:
4.1 Restated and Amended Limited Partnership Agreement
of the Company dated October 26, 1982 (filed as
Exhibit 12 to the Form 8 amending the Company's
quarterly report on Form 10-Q for the nine months
ended September 30, 1982, and incorporated herein
by reference).
4.2 Form of Subscription Agreement (filed as Exhibit
B-2 to the Registration Statement on Form S-1, No.
2-74254, and incorporated herein by reference).
4.3 Form of Assumption Agreement (filed as Exhibit B-3
to the Prospectus dated April 28, 1982 contained in
the Company's Registration Statement on Form S-1,
No. 2-74254, and incorporated herein by reference).
B.) Reports on Form 8-K:
None
Page 9 of 9
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.
NEW ENERGY COMPANY OF INDIANA
LIMITED PARTNERSHIP
By: New Energy Corporation of Indiana,
General Partner
Dated: August 14, 1995 By: S\________________________________
John H. Parker
President and Chief Operating
Officer
Dated: August 14, 1995 By: S\________________________________
Anthony R. Corso
Vice President and Chief Financial
Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 10,229,960
<SECURITIES> 0
<RECEIVABLES> 7,474,881
<ALLOWANCES> 0
<INVENTORY> 6,576,302
<CURRENT-ASSETS> 24,864,980
<PP&E> 159,225,051
<DEPRECIATION> (132,771,342)
<TOTAL-ASSETS> 51,318,689
<CURRENT-LIABILITIES> 18,638,989
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 51,318,689
<SALES> 67,221,765
<TOTAL-REVENUES> 67,221,765
<CGS> 53,744,849
<TOTAL-COSTS> 53,744,849
<OTHER-EXPENSES> 3,854,730
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,194,600
<INCOME-PRETAX> 7,723,272
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,723,272
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
