VINEYARD OIL & GAS COMPANY
10299 West Main Road
North East, PA 16428
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
Pursuant to the requirements of the Securities Exchange Act of 1934, we are
transmitting herewith the attached Form 10-QSB.
Sincerely,
Vineyard Oil & Gas Company
James J. Concilla
President
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 1996
Commission File Number 0-13871
Pennsylvania 25-1349204
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10299 West Main Road, North East, Pennsylvania 16428-0391
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (814) 725-8742
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 latest practical
date:
Common Stock, No Par Value - 5,125,562.50 shares as of September 30, 1996
<PAGE>
<TABLE>
PART 1 - FINANCIAL INFORMATION
BALANCE SHEETS (UNAUDITED)
VINEYARD OIL & GAS COMPANY
<CAPTION>
September 30, December 31,
1996 1995
<S> <C> <C>
ASSETS
Current Assets
Cash $ 223,941 $ 521,160
Accounts receivable 1,858,961 1,659,385
Inventories 246,006 222,408
Prepaid Expenses 8,637 33,506
__________ __________
Total Current Assets 2,337,545 2,436,459
Property, Plant and Equipment 8,638,059 8,559,725
Accumulated depreciation (7,987,990) (7,914,048)
_________ _________
650,069 645,677
Deferred Costs and Other Assets
Cash restricted 409,237 342,285
Other noncurrent assets 71,841 4,392
__________ __________
481,078 346,677
__________ __________
TOTAL ASSETS (NOTE) $ 3,468,692 $ 3,428,813
__________ __________
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 1,627,691 $ 1,631,591
Other accrued liabilities 90,465 74,398
Current portion, long term debt 75,928 79,867
__________ __________
Total Current Liabilities 1,794,084 1,785,856
Long Term Debt - less current portion 55,172
Deferred revenue 379,008 365,129
Shareholder's Equity Common Stock, authorized
15,000,000 shares without par value, issued
5,125,562.5 shares at September 30, 1996,
at stated value of $.05 256,278 256,278
Additional paid-in capital 4,935,430 4,935,430
__________ __________
5,191,708 5,191,708
Retained earnings (deficit) (3,671,188) (3,744,132)
__________ __________
1,520,520 1,447,576
Less: cost of 67,944 shares held in treasury ( 224,920) ( 224,920)
__________ __________
1,295,600 1,222,656
__________ __________
$ 3,468,692 $ 3,428,813
__________ __________
<FN>
See notes to condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
PART I. - FINANCIAL INFORMATION
STATEMENTS OF INCOME AND RETAINED EARNINGS (UNAUDITED)
FOR THE THREE MONTHS AND NINE MONTHS
ENDED SEPTEMBER 30, 1996 AND 1995
VINEYARD OIL & GAS COMPANY
<CAPTION>
3 Months 3 Months 9 Months 9 Months
Ended Ended Ended Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Earned revenues $ 1,883,818 $ 1,006,994 $ 4,737,151 $ 3,374,457
Other Income 4,044 8,628 52,228 52,301
__________ __________ __________ __________
1,887,862 1,015,622 4,789,379 3,426,758
Cost of Earned Revenues 1,907,899 859,400 4,394,636 2,944,390
Selling, general and
administrative expenses 113,054 110,329 313,203 331,085
Interest 2,349 6,346 8,596 15,864
__________ __________ __________ __________
2,023,302 976,075 4,716,435 3,291,339
__________ __________ __________ __________
Income before income taxes (135,440) 39,547 72,944 135,419
Income taxes 0 0 0 0
__________ __________ __________ __________
Net Income (135,440) 39,547 72,944 135,419
Retained Earnings (Deficit)
Beginning of period (3,535,748) (3,724,914) (3,744,132) (3,820,786)
__________ __________ __________ __________
Retained Earnings (Deficit)
End of period (3,671,188) (3,685,367) (3,671,188) (3,685,367)
__________ __________ __________ __________
Income per common share (.027) .008 .014 .027
__________ __________ __________ __________
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF CASH FLOWS (UNAUDITED)
VINEYARD OIL & GAS COMPANY
FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
<CAPTION>
3 Months 3 Months 9 Month 9 Months
Ended Ended Ended Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Cash flow from operating
activities:
Income (loss) from operations $ (135,440)$ 39,547 $ 72,944 $ 135,419
Adjustments To Reconcile Net
Income to Net Cash Provided by
Operating Activities:
Depreciation and amortization 28,261 27,474 73,942 91,181
Provision for losses on
accounts receivable and
inventories 6,000 4,500 12,000 13,500
Gain on sale of property
Changes in operating assets
and liabilities providing
(using cash):
Accounts receivable (621,813) (153,217) (211,576) 457,300
Inventories (12,337) 1,869 (23,598) (2,906)
Prepaid expenses 9,458 10,458 24,869 21,764
Other assets (25,368) 0 (67,449) 0
Accounts payable 584,899 (136,523) (3,900) (917,906)
Other current liabilities 55,790 7,700 16,067 468
Deferred revenue 4,449 0 13,879 0
__________ __________ ________ _________
Net cash provided by (used in)
operating activities (106,101) (198,192) (92,822) (201,180)
__________ __________ ________ _________
Cash flow from investing
activities:Capital expenditures (20,241) (4,807) (78,334) (55,646)
Common Stock 0 2,850 0 2,850
__________ __________ ________ _________
Net cash used in investing
activities (20,241) (1,957) (78,334) (52,796)
__________ __________ ________ _________
Cash flow from financing
activities:Principal payments
on borrowings (20,221) (20,508) (59,111) (58,368)
__________ __________ ________ _________
Net cash (used in) financing
activities (20,221) (20,508) (59,111) (58,368)
__________ __________ ________ _________
Increase (Decrease) in cash (146,563) (220,657) (230,267) (312,344)
Cash at beginning of period 779,741 793,249 863,445 884,936
__________ __________ ________ _________
Cash at end of period $ 663,178 $ 572,592 $ 633,178 $ 572,592
__________ __________ ________ _________
<FN>
See notes to condensed financial statements.
</TABLE>
VINEYARD OIL & GAS COMPANY
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
1. In the opinion of the Company, the accompanying condensed financial
statements contain all adjustments (consisting only of normal accruals)
necessary to present fairly the results for the nine months ended September 30,
1996, and are not necessarily indicative of the results to be expected for the
full year.
2. Primary earnings per share are determined by dividing net income by the
weighted average number of common equivalent shares outstanding (5,125,562.50
in 1996 and 1995).
3. No federal income tax was due or paid during the period ending September 30,
1996, due to available operating loss carry forwards.
4. Long-term debt is summarized as follows:
<TABLE>
<CAPTION>
September, 30, 1996 December 31, 1995
<S> <C> <C>
Mortgage payable individual,
secured by all assets of the
Company, payable in monthly
payments of $7,523, including
interest at 10.5%, through
July, 1997. $ 75,928 $135,039
__________ __________
75,928 135,039
Current portion long-term debt 75,928 (79,867)
__________ __________
0 55,172
__________ __________
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
IN THE QUARTER ENDED SEPTEMBER 30, 1996
Material Changes in Financial Conditions
Vineyard Oil & Gas Company's cash position decreased $230,267 in the nine
month period and $146,563 in the three month period ended September 30, 1996.
This represents decreases of 26.7% and 18.8% respectively. The principal
reason was the effect of accounts receivable and accounts payable in the
period. For the nine month period, accounts receivable increased $211,576 while
accounts payable decreased $3,900 resulting in a net decrease in cash of
$207,676. For the three month period accounts receivable increased $621,813
and accounts payable increased $584,899, resulting in a net decrease in cash of
$36,914. The timing of billings and collections and resulting payments was the
principal cause of the large nine month difference. Inventories increased
$23,598 and $12,337 for the nine and three month periods respectively. These
are normal adjustments. Other assets increased $67,449 and $25,368
respectively. This represents an increasing investment in a limited liability
corporation company.
Capital expenditures of $78,334 and $20,241 for the nine and three month
periods decreased cash accordingly.
Other current liabilities increased $16,067 and $55,790 or the respective
nine and three month periods. Accrued commissions accounted for $35,000 of the
three month increase.
Long term debt decreased during the nine month period by the amounts paid
against the principal. This amounted to $59,111 and $20,221 for the nine and
three month periods.
Shareholders' equity increased $72,944 for the nine month period and
decreased $135,440 for the three month period ending September 30, 1996. This
was the results of operations for the respective periods.
Material Changes and Results of Operations
Earned revenues increased $876,884 for the three month period and
$1,362,694 for the nine month period ended September 30, 1996, compared to the
same periods in 1995. The major reason for the increase was the dramatic
increase in natural gas prices in 1996. Gas marketing represents 83% of the
total earned revenues for 1996, and the increased gas selling prices impacted
earned revenues dramatically. Likewise, the price increase had a similar
effect on the cost of earned revenues. Gas purchases comprises 82% of total
cost of earned revenue and costs increased $1,048,499 for the three month
period and $1,450,246 for the nine month period ended September 30, 1996 over
1995. Also contributing to the increased costs was adjustment of pool average
prices and replacement of pool imbalances.
General and administrative expenses decreased $17,882, or 5.4%, for the
nine month period and increased $2,725, or 2.5%, for the three month period as
compared to 1995. The overall decrease was caused by a slight reduction in
insurance and communication costs. Interest expense for the three and nine
month periods decreased $3,997 and $7,268 over similar periods in 1995, as a
result of continuing debt reduction.
Net income decreased $174,987 for the three month period and $62,475 for
the nine month period ending September 30, 1996, as compared to the same
periods in 1995. The overall decrease is due in part to the high cost of
replacement gas and inflated pool averages.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
____________________________
NOT APPLICABLE
ITEM 2. CHANGES IN SECURITIES
________________________________
NOT APPLICABLE
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
__________________________________________
NOT APPLICABLE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
______________________________________________________________
NOT APPLICABLE
ITEM 5. OTHER INFORMATION
____________________________
NOT APPLICABLE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
___________________________________________
(a) EXHIBITS
________
NONE
(b) REPORTS ON FORM 8-K
___________________
NONE.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<EXCHANGE-RATE> 1
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 223,941
<SECURITIES> 0
<RECEIVABLES> 1,944,652
<ALLOWANCES> 85,691
<INVENTORY> 246,006
<CURRENT-ASSETS> 2,337,545
<PP&E> 8,638,059
<DEPRECIATION> 7,987,990
<TOTAL-ASSETS> 3,468,692
<CURRENT-LIABILITIES> 1,794,084
<BONDS> 0
<COMMON> 256,278
0
0
<OTHER-SE> 1,039,322
<TOTAL-LIABILITY-AND-EQUITY> 3,468,692
<SALES> 4,737,151
<TOTAL-REVENUES> 4,789,379
<CGS> 4,394,636
<TOTAL-COSTS> 4,394,636
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,596
<INCOME-PRETAX> 72,944
<INCOME-TAX> 0
<INCOME-CONTINUING> 72,944
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 72,944
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
