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, 1997
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, 1997
<PAGE>
<TABLE>
PART 1 - FINANCIAL INFORMATION
BALANCE SHEETS (UNAUDITED)
VINEYARD OIL & GAS COMPANY
<CAPTION>
June 30, December 31,
1997 1996
<S> <C> <C>
ASSETS
Current Assets
Cash $ 312,445 $ 281,186
Accounts receivable 1,999,876 3,667,173
Inventories 174,071 198,686
Prepaid Expenses 39,742 22,346
__________ __________
Total Current Assets 2,526,134 4,169,391
Property, Plant and Equipment 8,577,994 8,577,994
Accumulated depreciation (8,019,387) (7,975,647)
__________ __________
558,607 602,347
Deferred Costs and Other Assets
Cash restricted for plugging 340,763 325,737
Investment at equity 168,109 130,683
__________ __________
508,872 456,420
__________ __________
TOTAL ASSETS (NOTE) $ 3,593,613 $ 5,228,158
__________ __________
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 1,877,295 $ 3,515,682
Other accrued liabilities 21,254 52,295
Current portion, long term debt 11,996 48,132
__________ __________
Total Current Liabilities 1,910,545 3,616,109
Long Term Debt - less current portion 0 0
Deferred revenue 387,468 382,293
Shareholder's Equity Common Stock, authorized
15,000,000 shares without par value, issued
5,125,562.5 shares at June 30, 1997,
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) (3,737,032)
__________ __________
1,520,520 1,454,676
Less: cost of 67,944 shares held in treasury ( 224,920) ( 224,920)
__________ __________
1,295,600 1,229,756
__________ __________
$ 3,593,613 $ 5,228,158
__________ __________
<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, 1997 AND 1996
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,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Earned revenues $ 2,036,062 $ 855,465 $ 4,908,462 $ 2,853,333
Other Income 19,317 14,559 45,007 48,184
__________ __________ ___________ ___________
2,055,379 870,024 4,953,469 2,901,517
Cost of Earned Revenues 1,959,242 705,367 4,677,626 2,486,737
Selling, general and
administrative expenses 111,869 109,786 207,759 200,149
Interest 751 3,037 2,240 6,247
__________ __________ ___________ ___________
2,071,862 818,190 4,887,625 2,693,133
__________ __________ ___________ ___________
Income before income taxes (16,483) 51,834 65,844 208,384
Income taxes 0 0 0 0
__________ __________ ___________ ___________
Net Income (16,483) 51,834 65,844 208,384
Retained Earnings (Deficit)
Beginning of period (3,654,705) (3,587,582) (3,737,032) (3,744,132)
Retained Earnings (Deficit)
End of period (3,671,188) (3,535,748) (3,671,188) (3,535,748)
__________ __________ ___________ ___________
Income per common share (.003) .010 .0128 .041
__________ __________ ___________ ___________
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
<TABLE>
STATEMENTS OF CASH FLOWS (UNAUDITED)
VINEYARD OIL & GAS COMPANY
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
<CAPTION>
3 Months 3 Months 6 Months 6 Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Cash flow from operating
activities:
Income (loss) from operations $ (16,483) $ 51,834 $ 65,844 $ 208,384
Adjustments To Reconcile Net
Income to Net Cash Provided by
Operating Activities:
Depreciation and amortization 21,557 23,959 43,740 45,681
Provision for losses on
accounts receivable and
inventories 6,000 6,000 12,000 6,000
Gain on sale of property 0 0 0 100
Changes in operating assets
and liabilities providing
(using cash):
Accounts receivable 906,660 1,407,353 1,655,297 410,237
Inventories 12,704 11,758 24,615 (11,261)
Prepaid expenses (2,758) 6,945 (17,396) 15,411
Other assets (17,609) (24,965) (37,426) (42,081)
Accounts payable (909,527) (1,633,275) (1,638,387) (588,799)
Other current liabilities 2,828 8,936 (31,041) (39,723)
Deferred revenue 3,113 4,690 5,175 9,430
__________ __________ __________ __________
Net cash provided by (used in)
operating activities 6,485 (136,765) 82,421 13,379
__________ __________ __________ __________
Cash flow from investing
activities:Capital expenditures 0 (3,802) 0 (58,093)
__________ __________ __________ __________
Net cash used in investing
activities 0 (3,802) 0 (58,083)
__________ __________ __________ __________
Cash flow from financing
activities:Principal payments
on borrowings ( 21,870) ( 19,531) (36,136) (38,890)
__________ __________ __________ __________
Net cash (used in) financing
activities ( 21,870) ( 19,531) (36,136) (38,890)
__________ __________ __________ __________
Increase (Decrease) in cash ( 15,385) (160,098) 46,285 (83,604)
Cash at beginning of period 668,593 939,839 606,923 863,345
__________ __________ __________ __________
Cash at end of period $ 653,208 $ 779,741 $ 653,208 $ 779,741
__________ __________ __________ __________
<FN>
See notes to condensed financial statements.
</TABLE>
VINEYARD OIL & GAS COMPANY
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 1997
1. In the opinion of the Company, the accompanying unaudited condensed
consolidated financial statements contain all adjustments (consisting of
only normal recurring accruals) necessary to present fairly the results for
the three months ended June 30, 1997, 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 1997 and 1996).
3. No federal income tax was due or paid during the periods ending June 30
1997, due to available operating loss carry forwards.
4. Long-term debt
Long-term debt is summarized as follows:
<TABLE>
<CAPTION>
June 30, 1997 December 31, 1996
<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. $ 11,996 $ 48,132
__________ __________
11,996 48,132
Current portion long-term debt ( 11,996) ( 48,132)
__________ __________
0 0
__________ __________
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
IN THE QUARTER ENDED JUNE 30, 1997
Material Changes in Financial Conditions
Vineyard Oil & Gas Company's cash position increased $46,285, or 7.6%, for
the six month period and decreased $15,385, or 2.3%, for the three month period
ended June 30, 1997. Accounts receivable decreased $1,655,297, or 45%, for the
six month period and $906,660, or 31%, for the three month period. Accounts
payable decreased $1,638,387, or 47%, and $909,527, or 33%, for the same
periods. The net effect of accounts receivable and accounts payable balances
was a cash increase of $16,910 for the six month period and a cash decrease of
$2,867 for the three month period. The majority of accounts receivable and
accounts payable are associated with gas marketing. Marketing volumes are
generally higher during the fourth and first quarters of the year, thus the
large dollar volume changes during the year. Inventories decreased $24,615
and $12,704 for the six and three month periods respectively. This is in line
with the Company's policy of attempting to reduce inventory levels to current
requirements. Prepaid expenses increased $17,396 for the six month period,
of which was for prepaid gas in 1997. Other assets increased $37,426 and
$17,609 for the six and three month periods. This represents additional
investment in pipelines. There were no fixed asset purchases during this
period. The increase in accumulated depreciation was accounted for by
depreciation and amortization charges of $43,740 and $21,557 for the six and
three month periods.
Current liabilities decreased by $1,705,564 for the six month period
ended June 30, 1997. Of this amount, $1,638,387 was attributable to accounts
payable as explained previously.
No additional long term debt was incurred during the six month period
ended June 30, 1997. Outstanding debt of $11,996 is shown as current portion
of long-term debt in current liabilities. Deferred revenue increased $5,175
for the six month period, such amount representing interest earned on monies
held for future plugging activities.
Shareholders' equity increased $65,844 in the six month period, this
being the net income for the six month period ended June 30, 1997.
Material Changes and Results of Operations
Earned revenues increased $2,055,129 for the six month period and
$1,180,597 for the three month period ended June 30, 1997, over the same
periods in 1996. Of these increases, gas marketing revenues accounted for
$1,962,959 and $1,128,046. Offsetting gas purchases increased $2,077,575 and
$1,225,325 resulting in a net gas marketing revenue decrease of $114,616 for
the six month period and $97,279 for the three month period in 1996. The main
reason for the decrease in net revenues in 1997 was a decrease in spot deal
margins. Other income remained materially the same during the comparable
periods. Cost of earned revenues increased $2,190,889 of which $2,077,575 was
gas marketing for the six month period. The remaining increase of $113,314
was caused mainly by costs which increased proportionately to income in other
revenues. Selling general and administrative expenses remained fairly
constant for the six and three month periods as compared to similar periods
for 1996. Interest expense decreased $4,007 and $2,286 for the respective
periods as a result of debt reduction during the period.
Net income decreased $142,540 and $68,317 for the six and three month
periods ended June 30, 1997, as compared to the prior year. For the six month
period, net gas marketing revenues decreased $114,616 and for the three month
period net gas marketing revenues decreased $97,279. Net gas marketing
decreases accounted for a substantial part of the decrease in net income.
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-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 312,445
<SECURITIES> 0
<RECEIVABLES> 2,103,911
<ALLOWANCES> 104,035
<INVENTORY> 174,071
<CURRENT-ASSETS> 2,526,134
<PP&E> 8,577,994
<DEPRECIATION> 8,019,387
<TOTAL-ASSETS> 3,593,613
<CURRENT-LIABILITIES> 1,910,545
<BONDS> 0
<COMMON> 256,278
0
0
<OTHER-SE> 1,039,322
<TOTAL-LIABILITY-AND-EQUITY> 3,593,613
<SALES> 4,908,462
<TOTAL-REVENUES> 4,953,469
<CGS> 4,677,626
<TOTAL-COSTS> 4,677,626
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,489
<INCOME-PRETAX> 65,844
<INCOME-TAX> 0
<INCOME-CONTINUING> 65,844
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 65,844
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
