SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 1996 Commission File No. 0-17538
WESTAMERICA CORPORATION
(Exact name of Registrant as specified in its charter)
Oklahoma 73-1322822
(State or other jurisdiction of (I.R.S. Employer
incorporated or organization) Identification No.)
Highway 75 North, Dewey, Oklahoma 74029
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (918) 534-1700
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.
As of June 30, 1996 the Registrant had outstanding 8,685,875
shares of Common stock, par value $.01 per share, which is the
Registrant's only class of common stock.
<PAGE>
WESTAMERICA CORPORATION
QUARTERLY REPORT ON FORM 10-QSB
For the Quarter ended June 30, 1996
TABLE OF CONTENTS
PART I
Page
Item 1. Consolidated Financial Statements (Unaudited):
Balance Sheets as of June 30, 1996 . . . . . . . . . . . 3
Statement of operations for three months ended
June 30, 1996 and 1995 (Unaudited). . . . . . . . . . 4
Statement of cash flows for three months ended
June 30, 1996 and 1995 (Unaudited). . . . . . . . . . 5
Notes to Consolidated Financial Statements (Unaudited) . 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations . . 7 & 8
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
<PAGE>
WESTAMERICA CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
ASSETS June 30
1996
CURRENT ASSETS:
Cash and cash equivalents $ 541
Marketable securities 109
Accounts receivable:
Affiliates 162
Trade 345
Other 135
Notes receivable 89
Inventories 285
TOTAL CURRENT ASSETS 1,666
PROPERTY AND EQUIPMENT:
Oil and gas properties, successful
efforts method 4,125
Transportation, drilling and
other equipment 607
Land and buildings 950
Less accumulated depreciation,
depletion, and amortization (3,479)
2,203
OTHER ASSETS:
Goodwill, less accumulated amortization 383
Other assets 245
Investment in Casmyn Corp 6,970
$ 11,467
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable and current portion
of long-term debt $ 426
Accounts payable 427
Accrued expenses 176
Prepaid drilling/completion contract 399
TOTAL CURRENT LIABILITIES 1,428
DEFERRED INCOME 35
LONG-TERM DEBT 132
NOTES PAYABLE TO STOCKHOLDER 191
STOCKHOLDERS' EQUITY:
Preferred stock authorized 1,000,000 shares, $.0l par
value; non voting convertible preferred stock, redeem-
able and cumulative, outstanding 100,000 shares. Non-
voting cumulative non-convertible series B preferred
stock, outstanding 97,700 shares. 2
Common stock, $.01 par value authorized 10,000,000
shares; issued 8,687,805, outstanding 8,685,875 shares 87
Additional paid-in capital 13,192
Deficit (3,598)
Treasury stock, at cost, 1,930 shares ( 2)
9,681
$ 11,467
See notes to consolidated financial statements
<PAGE>
WESTAMERICA CORPORATION
STATEMENT OF OPERATIONS
(Dollars in Thousands)
(Unaudited)
Three Months Ended
June 30,
1996 1995
REVENUES:
Commission income $ 1,074 $ 500
Oil and gas sales 71 50
Drilling, Recompletion and Service Income 123 33
Interest and other 2 5
1,270 588
COSTS AND EXPENSES:
Brokerage commissions and clearing brokers
charges 668 342
Brokerage operating expenses 305 252
Oil and gas operations 132 82
Selling, general and administrative 62 55
Depreciation, depletion and
amortization 33 21
Interest 17 12
1,217 763
NET INCOME (LOSS) $ 53 $ (176)
Per Share:
Net Income (Loss) $ .01 $ (.06)
AVERAGE SHARES OUTSTANDING 5,315,020 2,936,490
See notes to consolidated financial statements.
<PAGE>
WESTAMERICA CORPORATION
THREE MONTHS ENDED JUNE 30, 1995
STATEMENT OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
Three Months Ended
June 30
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ 53 $ (176)
Adjustments to reconcile net income (loss)
to net cash provided by (used in)
operating activities
Depreciation, depletion and amortization 33 21
(Gain) loss on sale of assets (101) -
Increase in receivables (111) (62)
Decrease (Increase) in other assets 5 (1)
Increase (decrease) in accounts payable,
drilling and well completion advances
and accrued expenses (99) 6
Other (49) 50
Net cash provided by (used in)
operating activities (269) (162)
Cash Flows from Investing Activities
Purchases of marketable securities (39) -
Expenditures for property and equipment (321) (50)
Proceeds from sales of property
and equipment 120 73
Net cash used in investing activities (240) 23
Cash Flows from Financing Activities
Repayment of bank borrowing (13) (18)
Proceeds from bank borrowing 85 -
Decrease in notes payable to stockholders - (5)
Dividends paid (47) (22)
Net cash provided by (used in)
financing activities 25 (45)
Net decrease in cash and
cash equivalents (484) (184)
Cash and cash equivalents, beginning
of period 1,025 574
Cash and cash equivalents, end of period $ 541 $ 390
Non-Cash Transactions:
On May 24, 1996, the Company issued 5,680,514
common shares in exchange for 606,061 common
shares of Casmyn Corp. $ 6,970
See noted to consolidated financial statements
<PAGE>
WESTAMERICA CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED JUNE 30, 1996
(Unaudited)
1. Basis of Presentation.
The financial statements presented herein were prepared in accordance with
the instructions to Form 10-QSB. Accordingly the statements presented do
not include all the information and note disclosure required by generally
accepted accounting principles. The statements should be read in
conjunction with the financial statements and notes thereto included in the
Registrant's Form 10-KSB for the year ended March 31, 1996. The
accompanying financial statements have not been audited by independent
accountants but, in the opinion of management, contain all adjustments, all
of which were of a normal recurring nature, necessary to summarize fairly
the Registrant's financial position and results of operations. The results
of operations for the three months ended June 30, 1996 may not be
indicative of the results that may be expected for the year ending March
31, 1997.
2. Subsequent Events
On May 24, 1996, the Company issued 5,680,514 common shares (approximately
65% of the outstanding common shares) in exchange for 606,061 common shares
of Casmyn Corp. ("Casmyn"). The shares issued are restricted from trading
and are subject to a repurchase agreement whereby the Company may, until
May 24, 1997, repurchase the common shares it issued by returning the
Casmyn shares. The Company and Casmyn have also executed a proxy agreement
whereby the Company's president may vote the shares owned by Casmyn.
The Company's investment in Casmyn, representing approximately seven
percent of Casmyn's outstanding common stock, is valued at approximately
$6,970,000, representing $1.23 per share of the Company's common stock.
This value reflects a discount from the recent average trading price of the
Company's common stock due to the restricted nature of the shares issued in
the transaction
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
This discussion should be read in conjunction with the financial statements
of WestAmerica Corporation and the notes related thereto included under
Item 1 of this report.
MD&A CAPITAL RESOURCES & LIQUIDITY
Consolidated current assets decreased $278,000 to $1,666,000 at June 30,
1996, compared with $1,944,000 at March 31, 1996. Current liabilities
decreased from $1,544,000 at March 31, 1996 to $1,428,000 at June 30, 1996.
The current ratio was 1.16:1 at June 30, 1996 compared to 1.26:1 at March
31, 1996. The current liabilities include $360,000 which, though
technically due during the current fiscal year (March 21, 1997) is expected
to be rolled forward into a new three year note. The Registrant has
sufficient liquidity to provide for foreseeable business needs.
RESULTS OF OPERATIONS
Revenues for the three months ended June 30, 1996, were $1,270,000 compared
to $588,000 for the three month period ended June 30, 1995. Commission
income increased $574,000 to $1,074,000 due to an increased number of
investment representatives being employed by the company's subsidiary,
WestAmerica Investment Group, Inc. ("WIG"), increased revenue per
representative and a generally favorable market environment for securities.
Oil and gas activities contributed $196,000 in revenue for the three months
ended June 30, 1996, compared to $83,000 for the three months ended June
30, 1995. The $113,000 increase in oil and gas activities was primarily
due to the sale of coalbed methane producing wells during the three month
period ended June 30, 1996.
Cost and expenses were $1,217,000 for the three month period ended June 30,
1996, compared to $763,000 for the three month period ended June 30, 1995.
Brokerage commissions, clearing brokers' charges and operating expenses
totaled $973,000 for the three months ended June 30, 1996, compared to
$594,000 for the three months ended June 30, 1995. Brokerage costs
declined from 119% of brokerage revenue during the three months ended June
30, 1995 to 91% of revenue during the three months ended June 30, 1996.
Expenses of oil and gas operations were $132,000 or 67% of revenue in the
three months ended June 30, 1996 compared to $82,000 or 99% of revenue
during the three months ended June 30, 1995. Costs and expenses generally
did not increase proportionately to the increase in revenue, for example,
revenue increased 215% while total cost and expenses increased 159%. The
Company's primary sources of revenue during the period ended June 30, 1996
were commission and investment management fee income - 85% and Oil and gas
operations - 15%. Net income was $53,000 for the three months ended June
30, 1996 compared to a net loss of $176,000 for the three months ended June
30, 1995. This change to profitability was primarily a result of economies
of scale effecting both the Company's oil and gas operations as well as its
financial services subsidiary.
<PAGE>
Separately stated, the Company's oil and gas operations posted a loss of
$41,000 and the financial services subsidiary net income of $94,000 in the
three months ended June 30, 1996.
On May 24, 1996 the Company issued 5,680,514 common shares (approximately
65% of the outstanding shares) in exchange for 606,061 shares of Casmyn
Corp. ("Casmyn"). The shares issued are restricted from trading and are
subject to a repurchase agreement whereby the Company may, until May 24,
1997 repurchase the common shares it issued by returning the Casmyn shares.
The Company and Casmyn have also executed a proxy agreement whereby the
Company's president may vote the shares owned by Casmyn. The Company's
investment in Casmyn, representing approximately seven percent of Casmyn's
outstanding common stock is valued at approximately $6,970,000 representing
$1.23 per share of the Company's common stock. This value reflects a
discount from the recent average trading price of the Company's common
stock due to the restricted nature of the shares issued in the transaction.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Resistant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ECC ENERGY CORPORATION
Date: August 14, 1996 By: /s/ Edward R. Foraker
Edward R. Foraker
President and Director,
Principle Executive Officer,
Principle Financial Officer, and
Principle Accounting Officer
/s/ William F. Groszkruger
William F. Groszkruger, Director
/s/ Stewart Smith
Stewart Smith, Director
/s/ Michael C. Pryor
Michael C. Pryor, Director
/s/ Robert M. Coleman
Robert M. Coleman, Director
<PAGE>
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