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
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 June 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 June 30, 1996
<PAGE>
<TABLE>
PART 1 - FINANCIAL INFORMATION
BALANCE SHEETS (UNAUDITED)
VINEYARD OIL & GAS COMPANY
<CAPTION>
June 30, December 31,
1996 1995
<S> <C> <C>
ASSETS
Current Assets
Cash $ 374,500 $ 521,160
Accounts receivable 1,243,148 1,659,385
Inventories 233,669 222,408
Prepaid Expenses 18,095 33,506
__________ __________
Total Current Assets 1,869,412 2,436,459
Property, Plant and Equipment 8,617,818 8,559,725
Accumulated depreciation (7,959,729) (7,914,048)
_________ _________
658,089 645,677
Deferred Costs and Other Assets
Cash restricted for plugging 405,241 342,285
Other noncurrent assets 46,473 4,392
__________ __________
451,714 346,677
__________ __________
TOTAL ASSETS (NOTE) $ 2,979,215 $ 3,428,813
__________ __________
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 1,042,792 $ 1,631,591
Other accrued liabilities 34,675 74,398
Current portion, long term debt 84,153 79,867
__________ __________
Total Current Liabilities 1,161,620 1,785,856
Long Term Debt - less current portion 11,996 55,172
Deferred revenue 374,559 365,129
Shareholder's Equity Common Stock, authorized
15,000,000 shares without par value, issued
5,125,562.5 shares at June 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) (3,535,748) (3,744,132)
__________ __________
1,655,960 1,447,576
Less: cost of 67,944 shares held in treasury ( 224,920) ( 224,920)
__________ __________
1,431,040 1,222,656
__________ __________
$ 2,979,215 $ 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 SIX MONTHS
ENDED JUNE 30, 1996 AND 1995
VINEYARD OIL & GAS COMPANY
<CAPTION>
3 Months 3 Months 6 Months 6 Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Earned revenues $ 855,465 $ 986,322 $ 2,853,333 $ 2,367,463
Other Income 14,559 22,115 48,184 43,673
__________ __________ __________ __________
870,024 1,008,437 2,901,517 2,411,136
Cost of Earned Revenues 705,367 905,940 2,486,737 2,084,990
Selling, general and
administrative expenses 109,786 128,148 200,149 220,756
Interest 3,037 5,656 6,247 9,518
__________ __________ __________ __________
818,190 1,039,744 2,693,133 2,315,264
__________ __________ __________ __________
Income before income taxes 51,834 (31,307) 208,384 95,872
Income taxes 0 0 0 0
__________ __________ __________ __________
Net Income 51,834 (31,307) 208,384 95,872
Retained Earnings (Deficit)
Beginning of period (3,587,582) (3,693,607) (3,744,132) (3,820,786)
__________ __________ __________ __________
Retained Earnings (Deficit)
End of period (3,535,748) (3,724,914) (3,535,748) (3,724,914)
__________ __________ __________ __________
Income per common share .010 (.006) .041 .020
__________ __________ __________ __________
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
STATEMENTS OF CASH FLOWS (UNAUDITED)
VINEYARD OIL & GAS COMPANY
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995
[CAPTION]
<TABLE>
3 Months 3 Months 6 Month 6 Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Cash flow from operating
activities:
Income (loss) from operations $ 51,834 $ (31,307)$ 208,384 $ 95,872
Adjustments To Reconcile Net
Income to Net Cash Provided by
Operating Activities:
Depreciation and amortization 23,959 34,301 45,681 63,707
Provision for losses on
accounts receivable and
inventories 6,000 4,500 6,000 9,000
Gain on sale of property 0 0 100 0
Changes in operating assets
and liabilities providing
(using cash):
Accounts receivable 1,407,353 (41,244) 410,237 610,517
Inventories 11,758 4,734 (11,261) (4,775)
Prepaid expenses 6,945 13,242 15,411 11,306
Other assets (24,965) 0 (42,081) 0
Accounts payable (1,633,275) 73,755 (588,799) (781,383)
Other current liabilities 8,936 23,094 (39,723) (7,232)
Deferred revenue 4,690 0 9,430 0
__________ __________ ________ _________
Net cash provided by (used in)
operating activities (136,765) 81,075 13,379 (2,988)
__________ __________ ________ _________
Cash flow from investing
activities:Capital expenditures (3,802) (50,839) (58,093) (50,839)
__________ __________ ________ _________
Net cash used in investing
activities (3,802) (50,839) (58,093) (50,839)
__________ __________ ________ _________
Cash flow from financing
activities:Principal payments
on borrowings (19,531) ( 21,732) (38,890) (37,860)
__________ __________ ________ _________
Net cash (used in) financing
activities (19,531) ( 21,732) (38,890) (37,860)
__________ __________ ________ _________
Increase (Decrease) in cash (160,098) 8,504 (83,604) (91,687)
Cash at beginning of period 939,839 784,745 863,345 884,936
__________ __________ ________ _________
Cash at end of period $ 779,741 $ 793,249 $ 779,741 $ 793,249
__________ __________ ________ _________
<FN>
See notes to condensed financial statements.
</TABLE>
VINEYARD OIL & GAS COMPANY
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 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 six months ended June 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 June 30,
1996, due to available operating loss carry forwards.
4. Long-term debt is summarized as follows:
[CAPTION]
<TABLE>
June 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. $ 96,149 $135,039
__________ __________
96,149 135,039
Current portion long-term debt (84,153) (79,867)
__________ __________
11,996 55,172
__________ __________
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
IN THE QUARTER ENDED JUNE 30, 1996
Material Changes in Financial Conditions
Vineyard Oil & Gas Company's cash position decreased $83,604 for the six
month period and $160,098 for the three month period ended June 30, 1996. This
represents decreases of 9.7% and 18.5%, respectively, from December 31, 1995,
balances. The principal reason for the decreases is the effect of accounts
receivable and accounts payable. Accounts receivable decreased $410,637, or
$24.7%, for the six month period and $1,407,353, or 53%, for the three month
period ended June 30, 1996. Accordingly, accounts payable decreased $588,799,
or 36.1%, for the six month period and $1,633,275,or 61%, for the three month
period ended June 30, 1996. This resulted in net decreases in cash of $178,162
for the six month period and $225,922 for the three month period ended June 30,
1996. The reasons for the large decreases are that December and March have the
largest receivable and payable balances due to increased volume and price.
Inventories and prepaid expenses changed slightly, reflecting normal seasonal
adjustments.
Fixed assets increased $58,093 from December 31, 1995, due to purchases of
equipment and vehicles. Depreciation and amortization of $45,681 accounted for
the increase in accumulated depreciation for the six month period.
Other assets increased $105,037 from December 31, 1995, to June 30, 1996.
The increase was the result of additional investment in a subsidiary of
$42,081, and additional cash designated for plugging of $62,956.
Current liabilities decreased $624,263 during the six month period ending
June 30, 1996, the principal reason being the decrease in accounts payable of
$588,799. The seasonal decrease in accounts payable was explained previously.
Long term debt decreased during the six month period by the amounts paid
against the principle. No additional long term debt was incurred. Deferred
revenue increased $9,430 from December 31, 1995, such amounts representing
interest earned on monies held for future plugging activities.
Shareholders' equity increased $208,384 in the six month period, this
being the net income for the six month period ended June 30, 1996.
Material Changes and Results of Operations
Earned revenues decreased $130,857 for the three month period and increased
$485,870 for six month period ended June 30, 1996, as compared to the same
periods in 1995. The six month increase was due mainly to the increase in
marketing revenues of $540,254 offset by royalty decreases of $47,715. The
marketing revenue increase was due to increased volume and increased prices of
gas. The three month decrease of $130,857 was due mainly to a decrease in gas
marketing of $100,670, a result of decreased volume in the three month period
ended June 30, 1996. Cost of earned revenues increased $401,747 over the same
six month period in 1995. The increased activity is directly related to the
gas marketing revenue increase for the same period. Similarly, the $200,573
decrease in cost of revenues for the three month period ended June 30, 1996,
as compared to the same period in 1995, was mainly the result of a decrease in
gas marketing costs of $163,911 due to decreased purchases of gas. Selling,
general and administrative expenses decreased $20,607 for the six month period
and $18,362 for the three month period ended June 30, 1996, as compared to the
same periods in 1995. This represents decreases of 9% and 14%, respectively.
Interest expense for the six and three month periods ended June 30, 1996,
decreased $3,271 and $2,619, respectively as long term debt decreased. Net
income increased $112,512 for the six month period and $83,141 for the three
month period ended June 30, 1996, as compared to the same periods in 1995.
The increases result from increased volume and increased prices of gas sold in
1996 reduced by increased cost of purchased gas.
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> 6-MOS
<EXCHANGE-RATE> 1
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 374,500
<SECURITIES> 0
<RECEIVABLES> 1,328,507
<ALLOWANCES> 85,359
<INVENTORY> 233,669
<CURRENT-ASSETS> 1,869,412
<PP&E> 8,617,818
<DEPRECIATION> 7,959,729
<TOTAL-ASSETS> 2,979,215
<CURRENT-LIABILITIES> 1,161,620
<BONDS> 11,996
<COMMON> 256,278
0
0
<OTHER-SE> 1,174,762
<TOTAL-LIABILITY-AND-EQUITY> 2,979,215
<SALES> 2,853,333
<TOTAL-REVENUES> 2,901,517
<CGS> 2,486,737
<TOTAL-COSTS> 2,486,737
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,247
<INCOME-PRETAX> 208,384
<INCOME-TAX> 0
<INCOME-CONTINUING> 208,384
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 208,384
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
</TABLE>
