PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PHOENIX RESOURCES TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEET
FOR THE PERIOD ENDED
(Unaudited)
4/30/96 4/30/95
Current assets:
Cash $ 55,354 $ 24,611
Trade receivable 2,057,476 2,172,239
Inventories 2,215,625 2,665,894
Timber deeds 661,884 753,112
Prepaid expenses 291,183 553,584
Deferred income tax 211,183 229,658
TOTAL CURRENT ASSETS $ 5,492,705 $ 6,399,099
Long-term receivables -- 315,294
Property and equipment 22,070,155 13,607,511
Other assets 2,250,000 1,118,376
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TOTAL ASSETS $29,812,860 $21,440,279
LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities:
Notes payable and current maturities
of long term debt $ 5,217,222 2,355,673
Bank overdraft 415,760 --
Accounts payable 4,559,927 2,551,848
Customer deposits 63,021 76,456
Accrued expenses 102,039 315,715
Advances from shareholders 265,750 --
----------- ----------
Total current liabilities $ 10,623,719 $ 5,299,692
Long term debt
(less current maturities) 988,389 3,140,187
Deferred income taxes 388,491 255,215
STOCKHOLDERS' EQUITY
Common stock $ 7,780 141,215
Preferred stock-Series A 200 200
Preferred stock-Series B 1,000 -
Preferred stock-Series C 1,000 -
Additional paid in capital 20,381,951 11,406,788
Treasury stock (733,400) (733,400)
Retained earnings (1,846,270) 1,830,382
TOTAL STOCKHOLDERS' EQUITY 17,812,261 12,745,185
TOTAL LIABILITIES AND EQUITY 29,812,860 21,440,279
PHOENIX RESOURCES TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Six Months Ended:
4/30/96 4/30/95
Income:
Net Sales-Woodproducts $10,393,639 $ 12,661,978
Net Sales-Oil and gas 689,458 85,312
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TOTAL INCOME $11,083,097 $ 6,769,653
Cost of Sales 8,532,010 11,348,391
Gross Profit 2,551,087 1,398,899
Operating expenses 1,977,883 1,369,032
Operating income 573,204 29,867
Other income (expense)
Other income 0 9,006
Interest expense ( 342,312) (346,162)
Total other income (expense) ( 342,312) (337,156)
Net income before income tax 230,892 (307,289)
Income tax expense 32,000 (112,413)
-----------
Net income after income tax (470,563) $(215,679)
Earnings per share of common
stock outstanding $ (0.06) $ (0.04)
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Three Months Ended:
4/30/96 4/30/95
Income:
Net Sales-Woodproducts $ 5,360,941 $ 5,892,325
Net Sales-Oil and gas 375,621 86,312
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TOTAL INCOME $ 5,736,562 $ 5,978,637
Cost of Sales 3,429,310 5,209,337
Gross Profit 2,307,252 769,300
Operating expenses 1,349,076 576,250
Operating income 958,176 193,050
Other income (expense)
Other income 0 9,006
Interest expense ( 256,541) (172,554)
Total other income (expense) ( 256,541) (163,548)
Net income before income tax 701,635 ( 29,502)
Income tax expense 103,545 ( 8,700)
-----------
Net income after income tax (598,090) $( 20,802)
Earnings per share of common
stock outstanding $ (0.08) $ (0.01)
PHOENIX RESOURCES TECHNOLOGIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 Basis of Presentation
The financial information included herein is unaudited however such information
reflects all adjustments (consisting solely of normal adjustments) which are in
the opinion of management necessary for a fair statement of results for the
interim periods.
The results of operations for the three month and six month period ended
April 30, 1996 are not necessarily indicative of the results to be expected for
the full year.
The condensed consolidated financial statements include the accounts of
Phoenix Resources Technologies, Inc. and the following subsidiaries. Hughes Wood
Products, Inc. Houston Woodtech, Inc.
Note 2. Inventories
The company values its inventories generally at the lower of cost (first in
first-out) or market. Lumber and wood products are valued using a full
absorption procedure using standard cost techniques. Inventoried costs include
material, direct labor and production overhead. Cost for the log inventory
generally represents average current purchase cost.
Note 3 Income taxes
The provision for income taxes has been estimated by annualizing income
based on the results of operations for the first six months of this fiscal year.
Then the annual income taxes are calculated at the statutory rate of 34%. The
quarterly estimated income tax expense is calculated at one fourth (1/4) of the
estimated annual income tax expense. No provision for tax savings on the
quarterly loss was computed due to the continuing losses incurred by the
corporation. Under the applicable FAS tax assets are to be accrued only if a
reasonable certainity that such assets can be utilized by the corporation.
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
The corporation had a significant increase in profitability during the
second quarter. This is due to the cost and inventory containment efforts of
management that are presently taking effect. Profits for the second quarter
totaled $0.08 per share and the total year to date profits are $0.02 per share.
The majority of the increase comes from the wood products sector which enjoyed
high profit margins and a change in the mixture of products sold to decrease the
cost of sales as a percentage of sales. The oila nd gas division had a higher
than expected increase in both revenue and profit which is expected to continue
during the remainder of this fiscal year.
Demand for and prices of wood prodicts and energy products continue to be strong
,but the prices are expected to decline a bit in the third and fourth quarters
of the fiscal year.
Liquidity and Capital Resources
Phoenix Resources Technologies, Inc. had a working capital deficit at the
end of April 30, 1996. It is expected that adequate cash flow will come from the
conversion of Accounts Receivable and inventories into cash to meet all
obligations of the corporation.
PART II
ITEM 1. Legal proceedings
None
ITEM 2. Changes in securities
None
ITEM 3. Defaults upon senior securities
None
ITEM 4. Submission of Matters to a Vote of Security Holders
None
ITEM 5. Other information
None
ITEM 6. Exhibits and reports on form 8-k
None
SIGNATURES
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.
PHOENIX RESOURCES TECHNOLOGIES, INC.
June 24, 1996 s/James R. Ray
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Date Signature
June 24, 1996 s/George W. Smith
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Date Signature
