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 March 31, 2000
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 March 31, 2000
<PAGE>
<TABLE>
PART 1 - FINANCIAL INFORMATION
CONDENSED BALANCE SHEETS
VINEYARD OIL & GAS COMPANY
<CAPTION>
March 31, December 31,
2000 1999
(unaudited)
<S> <C> <C>
ASSETS
Current Assets
Cash $ 899,544 $ 507,161
Accounts receivable 3,717,909 3,297,071
Inventories 108,923 97,500
Prepaid Expenses 24,789 32,204
---------- ----------
Total Current Assets 4,751,165 3,933,936
Property, Plant and Equipment
Land and land improvements 193,680 193,680
Building and improvements 257,008 257,008
Oil and gas properties 6,804,544 6,804,544
Drilling and other equipment 1,205,870 1,231,658
---------- ----------
8,461,102 8,486,890
Less Accumulated depreciation (7,993,782) (8,000,460)
---------- ----------
467,320 486,430
Other Assets
Cash restricted for well plugging 381,893 360,006
Investments 169,674 158,226
---------- ----------
551,567 518,232
---------- ----------
TOTAL ASSETS $ 5,770,052 $ 4,938,598
---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable
Trade $3,399,647 $2,729,620
Limited Partnerships 412,726 279,059
Accrued expenses 19,444 20,822
---------- ----------
Total Current Liabilities 3,831,817 3,029,501
Deferred revenue 375,988 372,277
<PAGE>
Shareholder's Equity
Common Stock, authorized 15,000,000 shares
without par value, issued 5,125,562.5 shares
at March 31, 2000, 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) (3,404,541) (3,429,968)
---------- ----------
1,787,167 1,761,740
Less: cost of 67,944 shares held in treasury (224,920) (224,920)
---------- ----------
1,562,247 1,536,820
---------- ----------
$ 5,770,052 $ 4,938,598
---------- ----------
<FN>
See notes to condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
PART I. - FINANCIAL INFORMATION
CONDENSED STATEMENTS OF INCOME (UNAUDITED)
FOR THE THREE MONTHS
ENDED MARCH 31, 2000 AND 1999
VINEYARD OIL & GAS COMPANY
<CAPTION>
3 Months 3 Months
Ended Ended
March 31, March 31,
2000 1999
<S> <C> <C>
Earned revenues
Gas and Electric Marketing $4,020,177 $3,744,164
Well Services 32,141 47,564
Production and Royalties 100,780 72,728
Equipment rental and
service income 65,566 45,588
---------- ----------
$4,218,664 $3,910,044
Other Income
Gain on casualty 19,851 0
Rent and other income 8,694 5,156
Equity in earnings of jointly
owned company 11,448 6,460
---------- ----------
4,258,657 3,921,660
---------- ----------
Cost and Expenses
Direct costs of earned
revenues
Gas and electric marketing 3,960,867 3,648,593
Well services 93,766 82,641
Production 28,615 28,049
Equipment expenses 1,521 3,997
Depreciation/amortization 12,308 15,279
---------- ----------
4,097,077 3,778,559
General and Administrative 131,500 112,036
Depreciation 4,653 4,134
Interest 0 0
---------- ----------
4,233,230 3,894,729
---------- ----------
Net income before income taxes 25,427 26,931
---------- ----------
Income taxes (Note 3) 0 0
---------- ----------
Net income 25,427 26,931
Income per common share .005 .005
---------- ----------
<PAGE>
<FN>
See Note to condensed financial statements
</TABLE>
<TABLE>
<CAPTION>
CONDENSED STATEMENTS OF CASH FLOWS
VINEYARD OIL & GAS COMPANY (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
3 Months 3 Months
Ended Ended
March 31, March 31,
2000 1999
<S> <C> <C>
Cash flow from operating
activities:
Income (loss) from operations $ 25,427 $ 26,931
Adjustments To Reconcile Net
Income to Net Cash Provided by
Operating Activities:
Depreciation and amortization 16,961 19,413
Provision for losses on
accounts receivable and inventories 6,000 6,000
Gain on sale of property (19,851)
Changes in operating assets
and liabilities providing
(using) cash:
Accounts receivable (426,838) 775,038
Inventories ( 11,423) (16,624)
Prepaid expenses 7,415 (9,693)
Other assets ( 11,448) 10,239
Accounts payable 803,694 168,230
Other current liabilities ( 1,378) 6,722
Deferred revenue 3,711 4,702
---------- ---------
Net cash provided by (used in)
operating activities 392,270 990,958
---------- ---------
Cash flow from investing
activities: Capital expenditures 0 (30,741)
Proceeds from asset sale 22,000 0
---------- ----------
Net cash used in investing activities 22,000 (30,741)
---------- ----------
Cash flow from financing activities:
Principal payments on borrowings 0 0
---------- ----------
Net cash (used in) financing activities 0 0
---------- ----------
Increase (Decrease) in cash 414,270 960,217
Cash at beginning of period 867,167 877,942
---------- ----------
Cash at end of period $1,281,437 $1,838,159
---------- ----------
<FN>
See notes to condensed financial statements.
</TABLE>
<PAGE>
VINEYARD OIL & GAS COMPANY
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2000
1. In the opinion of the Company, the accompanying condensed (unaudited)
financial statements contain all adjustments (consisting of only normal
recurring accruals) necessary to present fairly the results for
the three months ended March 31, 2000 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 2000 and 1999).
3. No federal income tax was due or paid during the periods ending March 31,
2000, and 1999, due to available operating loss carry forwards.
4. Cash is classified as follows for financial statement reporting purposes:
<TABLE>
<CAPTION>
March 31, 2000 December 31, 1999
<S> <C> <C>
Cash in bank $ 899,544 $ 507,161
Cash restricted for well
plugging 381,893 360,006
---------- ----------
$1,281,437 $ 867,167
---------- ----------
</TABLE>
NOTE 5. BUSINESS SEGMENT INFORMATION
Description of the types of products and services from which each
reportable segment derives its revenue
The Company's three reportable business segments are gas marketing, well
services and equipment rental and oil and gas production. The Company's gas
marketing operation involves marketing gas from local producers and interstate
pipeline sources, as well as marketing gas from the Company's managed limited
partnerships, and selling that gas to industrial gas users through
transportation arrangements on intrastate and interstate pipeline systems.
In the well services and equipment rental operation, the Company rents
well service equipment (e.g. for use in water hauling, pipeline installation,
and welding) and provides workover and well tending services for producing
wells.
<PAGE>
Revenues from oil and gas production operations are primarily derived from
working and royalty interests in the sale of oil and gas production and for the
transmission of such production.
Measurement of segment profit or loss and segment assets
The accounting policies of the segments are the same as those described in
the summary of significant accounting policies. The Company evaluates
performance based on profit and loss from operations before income taxes not
including nonrecurring gains and losses.
The Company accounts for intersegment sales and transfers as if the sales
or transfers were to third parties, that is, at current market prices.
Factors management used to identify the Company's reportable segments
The Company's reportable segments are strategic business units that offer
different products and services. They are managed separately because each
segment requires different technology and marketing strategies.
The Company's segment profit or loss and assets are as follows:
Well Services
Gas & Electric and Equipment Oil & Gas All
Marketing Rental Production Others Totals
March 31,
2000
Revenues
from
external
customers 4,020,177 97,707 100,780 -0- 4,218,664
Intersegment
revenues -0- -0- -0- -0- -0-
Other
revenue -0- -0- -0- 39,993 39,993
Depreciation
and
amortization -0- 8,708 3,600 4,653 16,961
Segment profit 59,310 (6,288) 68,565 (96,160) 25,427
Segment
assets 1,547,765 2,386,414 405,760 1,430,113 5,770,052
Expenditures
for segment
assets -0- -0- -0- -0- -0-
<PAGE>
March 31,
1999
Revenues
from
external
customers 3,744,164 93,152 72,728 -0- 3,910,044
Intersegment
revenues -0- -0- -0- -0- -0-
Other
revenue -0- -0- -0- 11,616 11,616
Depreciation
and
amortization -0- 10,914 4,365 4,134 19,413
Segment profit 95,571 (4,400) 40,314 (104,554) 26,931
Segment
assets 2,200,583 903,837 635,859 1,155,283 4,895,562
Expenditures
for segment
assets -0- 30,741 -0- -0- 30,741
A) Revenue from segments below quantitative thresholds are attributed to
the Company's equity in earnings of its jointly owned company and unallocated
revenues such as interest income and gains recognized on the disposition of
assets. General and administrative expenses are not allocated to the Company's
four business segments. This activity is reported as "all others"
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
IN THE QUARTER ENDED MARCH 31, 2000
Material Changes in Financial Conditions
Vineyard Oil & Gas Company's cash position increased $414,270 during the
quarter ended March 31, 2000. The principal reason was the increase in
accounts payable of $803,694 offset by an increase in accounts receivable of
$426,838, resulting in a net increase in cash of $376,856. Inventories
increased $11,423, or 12%, during the quarter while prepaid expenses decreased
$7,415 due to periodic changes to operations. Other assets increased $11,448,
the Company's first quarter share of income from a jointly owned company. Long
lived assets decreased $25,788 during the quarter due to the write off of a
vehicle which was destroyed in an accident. The decrease of $6,678 in the
allowance was the net effect of an increase of $16,961 for depreciation charged
to operations, offset by a decrease of $23,639, the accumulated depreciation of
the disposed vehicle.
<PAGE>
Accrued expenses decreased slightly, $1,378, during the quarter and deferred
revenue increased $3,711, the amount of earnings on funds held for future
plugging costs. Shareholders' equity increased $25,427, the amount of net
income for the period.
Earned revenues increased $308,620 for the three month period ended March 31,
2000, over the same three month period in 1999. Gas marketing increased
$271,286, or 7%, while electric brokering revenues decreased $16,800. Well
services decreased $15,423, or 32%. The Company purchased limited partners'
interest in the fourth quarter 1999, and closed the partnerships. This
resulted in reduced billing for well tending services. Production and
royalties revenue increased $28,052, or 39%, in the first quarter over the
previous year because of the above mentioned ownership of partnership wells.
Equipment and rental income increased $19,978 due to increased activity in the
current quarter. Other income increased $23,389 over the same quarter in 1999.
Of this amount, $19,851 was the excess of proceeds received over the net book
value of the vehicle involved in the accident.
Cost of revenues increased $318,518 over the similar period in 1999. The
increase in gas purchases of $279,266 accounted for most of the difference.
Changes in other department costs were minimal. General and administrative
expenses increased $19,464, or 17%, over the first quarter 1999. Officers
salaries and payroll taxes increased $9,552, insurance costs increased $2,648,
and corporate taxes increased $6,115. Office salaries decreased $2,781 while
other expenses fluctuated slightly higher.
Net income of $25,427 at March 31, 2000, is a decrease of $1,504 from the same
period in 1999. Segmented profit and loss indicates gas and electric marketing
decreased $36,261, well services and equipment rental decreased $1,888, oil
and gas production increased $28,251 and all other increased $8,394 totaling
the difference of $1,504.
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
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
___________________________________________
(a) EXHIBITS
________
NONE
(b) REPORTS ON FORM 8-K
___________________
NONE.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<EXCHANGE-RATE> 1
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 899,544
<SECURITIES> 0
<RECEIVABLES> 3,861,688
<ALLOWANCES> 143,779
<INVENTORY> 108,923
<CURRENT-ASSETS> 4,751,165
<PP&E> 8,461,102
<DEPRECIATION> 7,993,782
<TOTAL-ASSETS> 5,770,052
<CURRENT-LIABILITIES> 3,831,817
<BONDS> 0
<COMMON> 256,278
0
0
<OTHER-SE> 1,305,969
<TOTAL-LIABILITY-AND-EQUITY> 5,770,052
<SALES> 4,218,664
<TOTAL-REVENUES> 4,258,657
<CGS> 4,097,077
<TOTAL-COSTS> 4,097,077
<OTHER-EXPENSES> 136,153
<LOSS-PROVISION> 6,000
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 25,427
<INCOME-TAX> 0
<INCOME-CONTINUING> 25,427
<DISCONTINUED> 0
<PAGE>
<CHANGES> 0
<NET-INCOME> 25,427
<EPS-BASIC> .005
<EPS-DILUTED> .005
</TABLE>
