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 September 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
September 30, 1995 DECEMBER 31, 1994
Assets (UNAUDITED) (AUDITED)
Current assets:
Cash and cash equivalents $ 11,840,068 $ 8,879 804
Accounts receivable 5,432,219 8,025,818
Other receivables 208,683 77,952
Inventories 4,868,069 4,453,276
Spare parts 2,629,227 2,611,001
Prepaid expenses and other 273,215 346,247
Total current assets 25,251,481 24,394,098
Property, plant and equipment 159,369,842 159,159,336
Accumulated depreciation (deduction) (133,421,562) (131,470,902)
25,948,280 27,688,434
Total assets $ 51,199,761 $ 52,082,532
=========== ===========
Liabilities and Partners'
Capital Deficit
Current liabilities:
Accounts payable $ 3,481,384 $ 3,204,488
Interest payable 290,761 342,522
Taxes payable 2,110,742 1,642,124
Other accrued liabilities 778,631 905,467
Current portion of long-term debt 12,167,165 12,795,098
Total current liabilities 18,828,683 18,889,699
Deferred management fees payable
to General Partner 0 1,100,188
Long-term debt, less current portion 59,895,554 68,996,610
Partners' capital (deficit):
General Partner (4,335,297) (5,273,246)
Limited Partners (23,666,132) (32,107,672)
Special Limited Partner 5,000,000 5,000,000
Syndication costs (4,523,047) (4,523,047)
Total Partners' capital deficit (27,524,476) (36,903,965)
Total liabilities and ___________ ___________
Partners' capital deficit $ 51,199,761 $ 52,082,532
=========== ===========
See notes to financial statements.
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NEW ENERGY COMPANY OF INDIANA LIMITED PARTNERSHIP
STATEMENTS OF OPERATION
<TABLE>
THREE THREE NINE NINE
MONTHS ENDED MONTHS ENDED MONTHS ENDED MONTHS ENDED
SEPT 30, 1995 SEPT 30, 1994 SEPT 30, 1995 SEPT 30, 1994
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net sales, ethanol $ 24,168,257 $ 23,255,922 $ 77,504,087 $ 69,753,432
By-product revenue 7,223,016 7,705,745 21,108,951 23,657,396
31,391,273 30,961,667 98,613,038 93,410,828
Cost of goods sold 26,793,351 28,388,036 80,538,200 92,157,303
Gross profit (loss) 4,597,922 2,573,631 18,074,838 1,253,525
Selling, general and
administrative expenses 2,010,862 1,856,822 5,865,592 5,706,922
Income (loss) from operations 2,587,060 716,809 12,209,246 (4,453,397)
Loss on disposal of assets 0 0 0 (6,624)
Interest income 149,459 95,241 445,145 217,092
Interest expense (1,080,302) (1,235,604) (3,274,902) (3,531,255)
Net income (loss) $ 1,656,217 $ (423,554) 9,379,489 $ (7,774,184)
========== ========== ========= ===========
Net income (loss) allocable to
Limited Partners $ 1,490,595 $ (381,199) $ 8,441,540 $ (6,996,766)
========== ========== ========= ===========
Limited Partner units
outstanding 6,400 6,400 6,400 6,400
========== ========== ========== ===========
Net income (loss) per unit $ 233 $ (60) $ 1,319 $ (1,093)
========== ========== =========== ===========
See notes to financial statements.
</TABLE>
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NEW ENERGY COMPANY OF INDIANA LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
<TABLE>
NINE NINE
MONTHS ENDED MONTHS ENDED
SEPT 30, 1995 SEPT 30, 1994
(UNAUDITED) (UNAUDITED)
<S>
Operating activities <C> <C>
Net income (loss) $ 9,379,489 $ (7,774,184)
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities:
Depreciation and amortization 1,950,660 10,083,535
Increase (decrease) in deferred
management fees payabe to
General Partner 324,133 470,279
Increase in accrued interest on
General Partner loan 404,302 404,302
Loss on disposal of assets 0 6,624
Increase (decrease) due to changes
in operating assets and liabilities:
Accounts and other receivables 2,462,868 (558,445)
Inventories (414,793) 975,078
Spare parts (18,226) 43,186
Prepaid expenses and other 73,032 10,949
Accounts payable 276,896 880,662
Interest payable (51,761) (207,436)
Taxes payable 468,618 (389,142)
Other accrued liabilities (126,836) 254,576
Net cash provided by (used in) operating
activities 14,728,382 4,199,984
Investing activities
Purchase of property and equipment (210,506) (109,495)
Net cash used in investing activities (210,506) (109,495)
Financing activities
Payments of deferred management fees
to General Partner (1,424,321) (550,000)
Payments of long-term debt (10,133,291) (5,624,633)
Capital contributions from Limited
Partners 0 694
Net cash used in financing activities (11,557,612) (6,173,939)
Increase (decrease) in cash and cash
equivalents 2,960,264 (2,083,450)
Cash and cash equivalents, beginning of
period 8,879,804 10,137,036
Cash and cash equivalents, end of period $11,840,068 $ 8,053,586
========== ==========
See notes to financial statements.
</TABLE>
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New Energy Company of Indiana Limited Partnership
Notes to Financial Statements
For the Quarter Ended September 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:
September 30, 1995 December 31, 1994
Raw materials $2,420,819 $2,251,812
Work-in-process 529,716 434,505
Finished goods 1,917,534 1,766,959
$4,868,069 $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 $6,603,511 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 September 30, 1995, the Company generated
income of $1,656,217 as compared to a loss of $423,554 for the three
months ended September 30, 1994. The income generated during the three
months ended September 30, 1995, was primarily due to a decrease in
depreciation expense and an increase in the volume of ethanol sold.
Revenue from the sale of ethanol increased during the three months
ended September 30, 1995, to $24,168,257 from $23,255,922 during the three
months ended September 30, 1994. This increase was primarily due to an
increase in the volume of ethanol sold.
Revenue from the sale of by-products decreased during the three months
ended September 30, 1995, to $7,223,016 from $7,705,745 during the three
months ended September 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 21,397,465 gallons for the three months
ended September 30, 1995, as compared to 19,937,453 gallons for the three
months ended September 30, 1994. This increase was primarily due to better
efficiency in the ethanol production process. The plant also produced
Page 7 of 9
71,443 tons of distillers dried grains and 40,465 tons of gaseous carbon
dioxide for the three months ended September 30, 1995, as compared to 64,231
tons of distillers dried grains and 40,926 tons of gaseous carbon dioxide
for the three months ended September 30, 1994. Distillers dried grains and
gaseous carbon dioxide are by-products of the ethanol production process.
Cost of goods sold decreased by $1,594,685 during the three months
ended September 30, 1995, compared to the same period in 1994, primarily due
to a reduction in depreciation expense.
For the nine months ended September 30, 1995, the Company generated income of
$9,379,489 as compared to a loss of $7,774,184 for the nine months ended
September 30, 1994. The income generated was primarily due to lower corn
costs, a decrease in depreciation expense and an increase in the price and
an increase in the price and volume of ethanol sold.
Revenue from the sale of ethanol increased during the nine months ended Sept-
ember 30, 1995, to $77,504,087 from $69,753,432 during the nine months ended
September 30, 1994. This increase was primarily due to an increase in the
in the price and volume of ethanol sold.
Revenue from the sale of by-products decreased during the nine months
ended September 30, 1995, to $21,108,951 from $23,657,396 during the nine
months ended September 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 65,335,639 gallons for the nine months ended
September30, 1995, as compared to 61,553,224 gallons for the nine months ended
September 30, 1994. This increase was primarily due to better efficiency in
the ethanol production process. The plant also produced 211,776 tons of
distillers dried grains and 124,198 tons of gaseous carbon dioxide for the
nine months ended September30, 1995, as compared to 193,270 tons of distillers
dried grains and 121,720 tons of gaseous carbon dioxide for the nine months
ended September 30, 1994.
Cost of goods sold decreased by $11,619,103 during the nine months ended
September 30, 1995, compared to the same period in 1994, primarily due to
reduced corn costs and depreciation expense.
Page 8 of 9
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: November 14, 1995 By: S\________________________________
John H. Parker
President and Chief Operating
Officer
Dated: November 14, 1995 By: S\________________________________
Anthony R. Corso
Vice President and Chief Financial
Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 11,840,068
<SECURITIES> 0
<RECEIVABLES> 5,640,902
<ALLOWANCES> 0
<INVENTORY> 7,497,296
<CURRENT-ASSETS> 25,251,481
<PP&E> 159,369,842
<DEPRECIATION> (133,421,562)
<TOTAL-ASSETS> 51,199,761
<CURRENT-LIABILITIES> 18,828,683
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 51,199,761
<SALES> 98,613,038
<TOTAL-REVENUES> 98,613,038
<CGS> 80,538,200
<TOTAL-COSTS> 80,538,200
<OTHER-EXPENSES> 5,865,592
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,274,902
<INCOME-PRETAX> 9,379,489
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,379,489
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
