FORM 10-QSB.-- QUARTERLY REPORT UNDER SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
(Last amended by 34-32231, eff. 6/3/93)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the quarterly period ended March 31, 1998
or
[ ] Transition Report Under Section 13 or 15(d) of the Exchange Act For
the transition period from ________________ to __________________
Commission file number 2-54020
American Geological Enterprises, Inc.
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(Exact name of registrant as specified in its charter)
Utah 87-0273300
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1102 Walker Center Salt Lake City, Utah 84111
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(Address of principal executive officers)
(801) 363-3283
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(Registrant's telephone number)
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(Former name, former address, and former fiscal year, if changed since last
report)
Check whether the registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the past 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.
[X] Yes [ ] No
As of March 31, 1998, 1,260,997 shares of common stock were outstanding.
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AMERICAN GEOLOGICAL ENTERPRISES, INC.
Balance Sheets
<CAPTION>
March 31,
1998 December 31,
Assets (unaudited) 1997
------ ----------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 938,350 935,431
Marketable securities held-for-sale 203,261 192,365
Accounts receivable 6,648 22,025
Interest and dividends receivable 1,723 1,276
Prepaid lease costs 3,158 2,649
----------- -----------
Total current assets 1,153,140 1,153,746
Investment in geothermal power unit, at cost, less accumulated
amortization of $142,449 in 1998 and $134,951 in 1997 684,750 692,248
Marketable securities held-to-maturity 70,968 71,106
----------- -----------
$1,908,858 1,917,100
=========== ===========
Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Accounts payable $ 9,495 7,751
Income taxes payable 11,396 18,374
Accrued liabilities 13,231 27,286
Deferred income taxes 15,073 11,009
----------- -----------
Total current liabilities 49,195 64,420
Deferred income taxes 93,599 95,803
Deferred revenue 969,272 979,885
Minority interest 11,152 11,152
Stockholders' equity:
Common stock, $.01 par value; authorized 2,500,000 shares; issued and
outstanding 1,260,997 shares 12,610 12,610
Additional paid-in capital 557,211 557,211
Unrealized gain on marketable securities, net of tax 25,338 18,506
Retained earnings 190,481 177,513
----------- -----------
785,640 765,840
----------- -----------
$1,908,858 1,917,100
=========== ===========
</TABLE>
See accompanying notes to financial statements.
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AMERICAN GEOLOGICAL ENTERPRISES, INC.
Statements of Operations
(Unaudited)
Three months ended
------------------
March 31, March 31,
1998 1997
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Revenues - gross revenues from geothermal power unit $42,560 41,408
-------- --------
Expenses:
Operating expenses of geothermal power unit 14,772 13,761
Amortization of geothermal power unit 7,498 7,497
Lease costs 1,161 1,161
Other general and administrative 12,341 2,920
-------- --------
35,772 25,339
-------- --------
Income from operations 6,788 16,069
Other income and expenses:
Interest income 8,694 9,507
Dividend income 899 1,428
Royalties 87 379
-------- --------
9,680 11,314
-------- --------
Income before income taxes 16,468 27,383
Income tax expense 3,500 8,930
-------- --------
Net income $12,968 18,453
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Net income per share $ .01 .01
======== ========
See accompanying notes to financial statements.
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AMERICAN GEOLOGICAL ENTERPRISES, INC.
Statements of Cash Flows
(Unaudited)
<CAPTION>
Three months ended
-----------------------
March 31, March 31,
1998 1997
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 12,968 18,453
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Amortization of geothermal power unit 7,498 7,497
Accretion on marketable securities held to maturity 138 33
Change in operating assets and liabilities:
Accounts receivable 15,377 2,906
Interest and dividends receivable (447) (447)
Prepaid lease costs (509) (508)
Accounts payable 1,744 0
Income taxes payable (6,978) 11,268
Accrued liabilities (14,055) 1,540
Deferred income taxes (2,204) (2,472)
Deferred revenue (10,613) (10,613)
--------- ---------
Net cash provided by (used in) operating activities 2,919 27,657
--------- ---------
Increase (decrease) in cash and cash equivalents 2,919 27,657
Cash and cash equivalents at beginning of period 935,431 833,654
--------- ---------
Cash and cash equivalents at end of period $ 938,350 861,311
========= =========
</TABLE>
See accompanying notes to financial statements.
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AMERICAN GEOLOGICAL ENTERPRISES, INC.
Notes and Disclosures to Form 10-QSB
1. Presentation
------------
The financial statements as of March 31, 1998, and for the three months
then ended were prepared by American Geological Enterprises, Inc. (AGE) without
audit pursuant to the rules and regulations of the Securities and Exchange
Commission (SEC). Certain information and footnote disclosures normally included
in the financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. In the opinion of management, all necessary adjustments to the
financial statements have been made to present fairly the financial position and
results of operations and cash flows. The results of operations for the periods
presented are not necessarily indicative of the results for the respective
complete years. AGE has previously filed with the SEC a Form 10-KSB, which
included audited financial statements for the two years ending December 31, 1997
and 1996. It is suggested that the financial statements contained in this filing
be read in conjunction with the statements and notes thereto contained in AGE's
Form 10-KSB filing.
2. Net Income Per Share
--------------------
Net income per share is computed by dividing net income by the weighted
average number of shares outstanding during each period.
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AMERICAN GEOLOGICAL ENTERPRISES, INC.
Management's Discussion and Analysis of Financial Condition
and Results of Operations
AGE is engaged in the acquisition of geothermal and oil and gas leases. Revenue
consists of royalties and interest. AGE's financial condition and results of
operations fluctuate from year to year, depending upon the production from
current leases, the availability of leases to be acquired, and the opportunity
to sell lease rights. AGE's ability to obtain future leases or to generate
revenues from the sale of lease rights is not determinable; hence, its financial
condition and operations may fluctuate widely in the future.
Financial Condition & Results of Operations
- -------------------------------------------
At March 31, 1998, AGE's financial condition is consistent with December 31,
1997. Income and expenses for the first quarters of 1998 and 1997 are consistent
except for other general and administrative expenses and income tax expense.
Other general and administrative expenses increased in 1998 due to accounting
fees related to a prior year tax audit. Income tax expense in 1998 does not
reflect the expected tax rate due to the change in long-term deferred taxes.
Liquidity
- ---------
AGE's liquidity at March 31, 1998, is considered adequate with $1,103,945 in
working capital. AGE is committed to furnish its share of steam from its
investment in a geothermal power unit to PacifiCorp under a 30-year agreement
that commenced in 1991. Additionally, AGE's future commitments consist of lease
payments on the land which lies within the participating area of the geothermal
power unit. There are no other commitments or anticipated expenditures of a
capital nature.
AGE's economic future will be dependent, in major part, upon the value of its
undeveloped interests in the geothermal power unit. The value of such
undeveloped interests will, in turn, be dependent upon, among other matters (a)
the then current price of energy; (b) governmental incentives to develop
renewable resources; (c) regulatory incentives; and (d) the load needs of
PacifiCorp.
Other
- -----
A tax rate of 34.6 percent was used for income tax calculations for 1998.
Current estimates support 34.6 percent as the effective tax rate for the 199 8
year.
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Part II
Other Information
There is no information to be submitted under Part II, and no reports were
required to be filed under Form 8-K during the period.
S I G N A T U R E S
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.
AMERICAN GEOLOGICAL ENTERPRISES, INC.
(Registrant)
May 15, 1998 Dominic Welch
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Date DOMINIC WELCH, Treasurer
May 15, 1998 Peter W. G. Cayias
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Date PETER W.G. CAYIAS, Secretary
<TABLE> <S> <C>
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<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 938350
<SECURITIES> 274229
<RECEIVABLES> 8371
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1153140
<PP&E> 0
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<TOTAL-ASSETS> 1908858
<CURRENT-LIABILITIES> 49195
<BONDS> 0
0
0
<COMMON> 12610
<OTHER-SE> 773030
<TOTAL-LIABILITY-AND-EQUITY> 785640
<SALES> 0
<TOTAL-REVENUES> 42560
<CGS> 0
<TOTAL-COSTS> 35772
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<INCOME-PRETAX> 16468
<INCOME-TAX> 3500
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<NET-INCOME> 12968
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