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 December 31, 1997 Commission File No. 0-17538
WESTAMERICA CORPORATION
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(Exact name of Registrant as specified in its charter)
Oklahoma 73-1322822
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(State or other jurisdiction of (I.R.S. Employer
incorporated or organization) Identification No.)
7208 Sandlake Boulevard, Suite 304, Orlando, Florida 32819
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(407) 354-3333
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 [ ]
As of December 31, 1997, the Registrant had outstanding 17,673,400
shares of Common stock, par value $.01 per share, which is the Registrant's only
class of common stock.
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WESTAMERICA CORPORATION
QUARTERLY REPORT ON FORM 10-QSB
For the Quarter ended December 31, 1997
TABLE OF CONTENTS
PART I
Item 1. Consolidated Financial Statements (Unaudited)
Balance Sheet as of December 31, 1997
Statement of operations for three months ended
December 31, 1997 and 1996 (Unaudited)
Statement of operations for nine months ended
December 31, 1997 and 1996 (Unaudited)
Statement of cash flows for nine months ended
December 31, 1997 and 1996 (Unaudited)
Notes of Consolidated Financial Statements(Unaudited)
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
Signatures
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<TABLE>
<CAPTION>
WESTAMERICA CORPORATION
CONSOLIDATED BALANCE SHEET
(Dollars in Thousands)
(Unaudited)
December 31
ASSETS 1997
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<S> <C>
CURRENT ASSETS:
Cash and cash equivalents ...................................... $ 179
Investment ...................................................... 115
Accounts receivable:
Oil and gas partnership ................................. 340
Trade ................................................... 66
Other ................................................... 73
Notes receivable ............................................... 89
Inventories .................................................... 316
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TOTAL CURRENT ASSETS .................................... 1,178
PROPERTY AND EQUIPMENT:
Oil and gas properties, successful
efforts method ............................................... 5,108
Transportation, drilling and
other equipment .............................................. 807
Land, buildings, furniture and equipment ....................... 1,169
Less: accumulated depreciation,
depletion, and amortization .................................. (3,827)
TOTAL PROPERTY AND EQUIPMENT ................................ 3,257
OTHER ASSETS:
Other assets ................................................... 515
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TOTAL ASSETS ................................................... $ 4,950
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable and current portion
of long-term debt ....................................... $ 87
Accounts payable and accrued expenses .......................... 422
Prepaid drilling and well completion contract .................. 707
Deposits ........................................................ 500
TOTAL CURRENT LIABILITIES ............................... 1,716
DEFERRED INCOME .................................................. 27
LONG-TERM DEBT ................................................... 679
</TABLE>
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<TABLE>
<CAPTION>
WESTAMERICA CORPORATION
CONSOLIDATED BALANCE SHEET
(Dollars in Thousands)
(Unaudited)
(continued)
December 31
1997
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<S> <C>
STOCKHOLDERS' EQUITY:
Preferred stock authorized 1,000,000 shares,
$.01 par value; non voting convertible preferred stock,
redeemable and cumulative, outstanding 100,000
shares. Nonvoting cumulative non-convertible series B
preferred stock, outstanding 121,700 shares ................... 2
Common stock, $.01 par value authorized 50,000,000
shares; issued and outstanding 17,673,400 shares .............. 177
Additional paid-in capital ..................................... 7,187
Retained Earnings(Deficit) ...................................... (4,838)
TOTAL EQUITY ............................................ 2,528
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ..................... $ 4,950
=======
</TABLE>
See notes to consolidated financial statements
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<TABLE>
<CAPTION>
WESTAMERICA CORPORATION
STATEMENT OF OPERATIONS
(Dollars in Thousands)
(Unaudited)
Three Months Ended
DECEMBER 31,
-------------------------------
1997 1996
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<S> <C> <C>
REVENUES:
Oil and gas sales ...................... $ 128 97
Drilling, recompletion
and service income ................... 208 195
Lease sales ............................ 27 63
Interest and other ..................... 13 2
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376 357
COSTS AND EXPENSES:
Oil and gas operations ................. 199 147
Selling, general and administrative .... 865 132
Depreciation, depletion and
amortization ......................... 52 30
Interest ............................... 18 15
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1,134 324
NET GAIN (LOSS) FROM OPERATIONS .......... (758) 33
Less preferred stock dividend ............ (50) (45)
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Net Income(Loss) ......................... $ (808) $ (12)
============ ============
Net income (loss) applicable
to common stock ....................... $ (.04) $ (.01)
============ ============
AVERAGE SHARES OUTSTANDING ............... 17,673,400 2,995,911
============ ============
</TABLE>
See notes to consolidated financial statements.
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<TABLE>
<CAPTION>
WESTAMERICA CORPORATION
STATEMENT OF OPERATIONS
(Dollars in Thousands)
(Unaudited)
Nine Months Ended
DECEMBER 31,
-------------------------------
1997 1996
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<S> <C> <C>
REVENUES:
Oil and gas sales ...................... $ 239 $ 238
Drilling, recompletion
and service income ................... 357 376
Lease sales ............................ 158 208
Interest and other ..................... 28 4
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782 826
COSTS AND EXPENSES:
Oil and gas operations ................. 442 424
Selling, general and administrative .... 1,360 266
Depreciation, depletion and
amortization ......................... 130 76
Interest ............................... 52 47
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1,984 813
NET (LOSS)INCOME FROM OPERATIONS ......... (1,202) 13
Less: Preferred stock dividend ........... (150) (137)
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Net Income (Loss) ........................ $ (1,352) $ (124)
============ ============
Net Income (Loss) ........................ $ (.07) $ (.04)
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AVERAGE SHARES OUTSTANDING ............... 17,673,400 2,995,911
============ ============
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
WESTAMERICA CORPORATION
NINE MONTHS ENDED DECEMBER 31, 1997
STATEMENT OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
Nine Months Ended
DECEMBER 31,
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1997 1996
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) ................................. $(1,202) $ 83
Adjustments to reconcile net income (loss)
to net cash used in operating activities
Depreciation, depletion and amortization ....... 130 96
Gain on sale of assets ......................... (158) (59)
Decrease (Increase) in receivables ............. 35 (191)
Decrease (Increase) in inventory ............... (52) (161)
Decrease (Increase) in other assets ............ (299) 4
Increase in accounts payable,
drilling and well completion advances
and accrued expenses ..................... 308 131
Other .......................................... 0 (2)
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Net cash used in operating activities .............. (1,238) (99)
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Cash Flows from Investing Activities
Purchase of marketable securities ................ (115) (59)
Sale of marketable securities .................... 64 121
Expenditures for property and equipment .......... (827) (706)
Proceeds from discontinued business .............. 443 -0-
Proceeds from sales of property
and equipment .................................. 180 78
Deposit on Sale of Assets ........................ 500 --
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Net cash provided by (used in)
investing activities ............................. 245 (566)
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Cash Flows from Financing Activities
Repayment of bank borrowing .................... (63) (75)
Increase in bank borrowing ..................... 214 30
Increase (Decrease) in notes payable
to stockholders .......................... (73) 152
Proceeds from preferred stock offering ......... -- 147
Increase (Decrease) in Loans ................... (22) --
Additional paid-in capital ..................... 987 --
Purchase of preferred stock .................... (14) --
Dividends paid ................................. (149) (136)
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</TABLE>
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<TABLE>
<CAPTION>
WESTAMERICA CORPORATION
NINE MONTHS ENDED DECEMBER 31, 1997
STATEMENT OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
Nine Months Ended
DECEMBER 31,
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1997 1996
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<S> <C> <C>
Net cash used in
financing activities ............................. 880 118
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Net decrease in cash and
cash equivalents ................................. (113) (547)
Cash and cash equivalents, beginning
of period ........................................ 292 1,025
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Cash and cash equivalents, end of period ........... $ 179 $ 478
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</TABLE>
See notes to consolidated financial statements.
<PAGE>
WESTAMERICA CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED DECEMBER 31, 1997
(Unaudited)
Item 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, 1997. 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 nine months ended December 31,
1997 may not be indicative of the results that may be expected for the year
ending March 31, 1998.
Item 2/3. 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 increased $66,000 to $1,178,000 at December 31,
1997, compared to $1,112,000 at September 30, 1997. Current liabilities
increased $799,000 to $1,716,000 at December 31, 1997, compared to $978,000 at
September 30, 1997. The increase in current liabilities was primarily the result
of a receipt of $500,000 from Ed Foraker as a refundable deposit on a purchase
contract for certain assets and the assumption of certain liabilities in the oil
and gas subsidiary at December 31, 1997, and accrued payroll of $145,000. The
Registrant has received from Capital Investment Partners, Inc. ("Capital") the
assurance that Capital will fund any cash flow short fall and provide liquidity
for the foreseeable future.
RESULTS OF OPERATIONS
Revenues for the three months ended December 31, 1997, were $376,000 compared to
oil and gas operating revenues of $357,000 for the three months ended December
31, 1996. The increase in revenue was due to an increase in oil and gas sales,
drilling, recompletion and service income.
<PAGE>
Expenses attributable to oil and gas operations increased $52,000 to a total of
$324,000 for the three months ended December 31, 1996, to $365,000 due to cost
of oil and gas operations for the three months ended December 31, 1997. Costs
and Expenses increased primarily due to a $760,000 advance for the preparation
and development of the company's entry into the destination/leisure resort
business, and a $24,000 decrease at the oil and gas operations selling, general
and administrative expenses, and a $22,000 increase in depreciation, depletion
and amortization. Net gain from oil and gas operations decreased from $33,000
for the three months ended December 31, 1996, to a net gain of $11,000 for the
three months ended December 31, 1997.
PART II
OTHER INFORMATION
Item 4
A. WestAmerica Corporation, on January 8, 1998, signed a purchase agreement to
acquire a 285 acre site, located on U.S. Highway 27, approximately 4 miles south
of U.S. Highway 192 and 4 miles north of Federal Interstate Highway 4. The
contract calls for a closing on 35 acres for $700,000 on or before June 10, 1998
with the remaining 250 acres at a cost of $5,000,000 over a one and a half year
period thereafter. WestAmerica Corporation plans to develop 750 residential
units (39,000 timeshare weeks), an 18 hole championship golf course, clubhouse,
swimming pool, shopping arcade and other facilities on the property.
B. WestAmerica is one of several guarantors to a certain mortgage in the
original principal amount of $1,267,951.40 dated May 26, 1995 in conjunction
with a prior investment in a restaurant venture in New Mexico during 1995 known
as B.C. Village Inn Partners, Limited Partnership. The cost of the total
property securing the mortgage, including land, building and improvements, and
furniture fixtures and equipment, was $1,490,467. Foreclosure proceedings were
initiated on November 17, 1997 by the mortgage holders against parties other
than WestAmerica as well as litigation to enforce the guarantee against the
Registrant. WestAmerica intends to vigorously defend the ligation and
anticipates that there is sufficient equity in the property to offset any
potential liability under the mortgage guarantee.
Item 5.
A. WestAmerica issued convertible debentures to seven accredited investors for
the period September 24, 1997 through December 31, 1997 and received net
proceeds of $867,580. The company issued to such investors 6,435,740 shares of
common stock upon conversion of the debentures.
B. WestAmerica Corporation has completed its divestiture of the subsidiary, ECC
Energy Corporation ("ECC") a California Corporation, to Edward R. Foraker, of
Scottsdale, Arizona, effective as of January 1, 1998. WestAmerica sold to Ed
Foraker 2,072,484 shares of ECC Common Stock, representing 100% of the issued
and outstanding shares of all classes of stock of ECC, which were owned by
WestAmerica prior to the Purchase Date (the "Shares").
WestAmerica received $500,000 in cash from Foraker. Foraker also agreed in
addition to the Purchase Price to assume and guarantee $2,000,000 for the
purchase and or exchange of WestAmerica's Preferred Stock (the "WestAmerica
Preferred Shareholders"). The parties agreed that the stated value of such
WestAmerica Preferred Stock is $2,000,000.
<PAGE>
C. WestAmerica Corporation (the "Registrant") and Capital Investment Partners,
Inc., ("Capital") a Delaware Corporation, have agreed to extend until December
31, 1999 Capital's prior commitment to fund up to $4,000,000 in total working
capital to the Registrant.
D. On August 11, 1997, the Registrant issued 9,500,000 newly issued restricted
Common Shares (the "Acquisition Shares") to Capital for all of the stock of
Sportsworld 2000 Resort, Inc., a Florida Corporation. 500,000 of such shares
were, issued by Capital to a non-affiliated finder (and certain members of the
finder's family) who introduced Capital to the Registrant and assisted in
bringing about the transaction. The transaction is reflected in the December 31,
1997 Balance Sheet and the Acquisition Shares were accounted for at par value.
<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.
WESTAMERICA CORPORATION
DATE: February 13, 1998 By: /s/Daniel M. Boyar
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Daniel M. Boyar
Chairman, President, and
Chief (Principal)
Executive Officer
By: /s/Max P. Cawal
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Max P. Cawal
Director
