As filed with the Securities and Exchange Commission on May 14, 1996
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarter ended MARCH 31, 1996
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File Number: 33-62684
EVANS SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Texas 74-1613155
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
720 Avenue F North, Bay City, Texas 77414 (409) 245-2424
(Address including zip code, and telephone number, including area code, of
registrant's principal executive offices)
JERRIEL L. EVANS, SR., PRESIDENT
Mailing Address: P.O. Box 2480, Bay City, Texas 77404-2480 (409) 245-2424
Physical Address: 720 Avenue F North, Bay City, Texas 77414 (409) 245-2424
(Name, address, including zip code,and telephone number,including area code,
of agent for service)
NONE
(Former name, former address and former fiscal year, if changed since
last report)
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 [ ]
Number of shares of common stock of registrant outstanding exclusive of
Treasury:
Shares or shares held by subsidiaries of the registrant at May 14, 1996:
2,865,072
1
<PAGE>
EVANS SYSTEMS, INC.
INDEX
PART I. FINANCIAL INFORMATION
Financial Statements (Unaudited) Page Number
Condensed Consolidated Balance Sheet
March 31, 1996 and September 30, 1995 ......................... 3
Condensed Consolidated Statement of Income
Six Months Ended March 31, 1996 and 1995 ....................... 4
Condensed Consolidated Statement of Cash Flows
Six Months Ended March 31, 1996 and 1995 ....................... 5
Notes to the Condensed Consolidated Financial Statements ........... 6
Management's Discussion and Analysis of Financial Condition and
Results of Operations ............................................. 8
PART II. OTHER INFORMATION
Exhibits and Reports on Form 8-K
A. Exhibits Index ............................................ 14
B. Reports on Form 8-K ....................................... 14
Signature .......................................................... 14
2
<PAGE>
PART I. FINANCIAL INFORMATION
EVANS SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
March 31, September 30,
1996 1995
-------- --------
ASSETS (in thousands)
Current Assets:
Cash and cash equivalents ......................... $ 4,316 $ 3,544
Marketable equity securities ...................... 1,810 2,026
Trade receivables, net of allowance of
doubtfulreceivable of $50,000 and $50,000 ........ 6,626 6,367
Inventory ......................................... 7,675 8,150
Prepaid expenses and other current assets ......... 2,306 1,387
Income taxes receivable ........................... 92 92
-------- --------
Total current assets ....................... 22,825 21,566
-------- --------
Property, plant and equipment, net ................... 19,071 17,623
-------- --------
Other assets:
Intangible assets, net ............................ 491 444
Other ............................................. 1,128 976
-------- --------
Total other assets ......................... 1,619 1,420
-------- --------
Total assets ............................... 43,515 $ 40,609
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses ............. 11,262 9,512
Accrued excise and other taxes payable ............ 1,616 1,738
Current portion of long-term debt ................. 6,568 5,423
Deferred income taxes ............................. 47 25
-------- --------
Total current liabilities .................. 19,493 16,698
Long-term debt ....................................... 4,544 4,663
Deferred income taxes ................................ 714 714
Deferred income ...................................... 120 0
-------- --------
Total liabilities .......................... 24,871 22,075
-------- --------
Commitments and contingencies
Stockholders' equity:
Common stock $0.01 par value, 15,000,000
shares authorized, 2,934,205 shares issued
and outstanding .................................. 29 29
Additional paid-in capital ........................... 11,381 11,381
Retained earnings ................................. 8,043 7,958
Net unrealized loss on marketable equity securities (375) (400)
Treasury stock, 69,133 common shares at cost ...... (434) (434)
-------- --------
Total stockholders' equity ................. 18,644 18,534
-------- --------
Total liabilities and stockholders' equity . $ 43,515 $ 40,609
======== ========
SEE NOTES TO THE CONDENSED FINANCIAL STATEMENTS
3
<PAGE>
EVANS SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, SIX MONTHS ENDED MARCH 31,
--------------------------- ---------------------------
1996 1995 1996 1995
-------- -------- -------- --------
(in thousands, except per share amounts)
<S> <C> <C> <C> <C>
Revenue:
Refined product sales .................................. $ 26,967 $ 27,846 $ 52,110 $ 53,720
Other sales and services ............................ 10,464 7,723 24,448 17,640
-------- -------- -------- --------
Total revenue .................................... 37,431 35,569 76,558 71,360
Cost of sales: ......................................... 32,823 31,121 67,317 61,865
-------- -------- -------- --------
Gross profit: .......................................... 4,608 4,448 9,241 9,495
-------- -------- -------- --------
Operating expenses:
Employment expenses ................................. 2,399 2,184 4,629 4,285
Other operating expenses ............................ 1,087 1,014 2,017 1,851
General & administrative expenses ................... 724 904 1,576 1,885
Depreciation and amortization ....................... 312 257 606 499
-------- -------- -------- --------
Total operating expenses ......................... 4,522 4,359 8,828 8,520
-------- -------- -------- --------
Operating income ....................................... 86 89 413 975
Other income/expense
Interest expense .................................... (255) (176) (486) (329)
Other income net .................................... 234 77 182 133
-------- -------- -------- --------
Income/(Loss) before provision for .................... 65 (10) 109 779
income taxes
Provision for income taxes: ............................ (15) 18 (21) (274)
-------- -------- -------- --------
Net income ............................................. $ 50 $ 8 $ 88 $ 505
======== ======== ======== ========
Earnings per share ..................................... $ 0.02 $ 0.00 $ 0.03 $ 0.17
</TABLE>
SEE NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
4
EVANS SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
SIX MONTHS ENDED
MARCH 31,
------------------
1996 1995
------- -------
(in thousands)
Cash flows from operating activities:
Net income .......................................... $ 88 $ 505
Non-cash adjustments:
Depreciation and amortization ................. 606 499
Changes in:
Current assets ............................ (487) (2,309)
Current liabilities ....................... 2,793 615
Other, net .................................... 25
------- -------
Net cash provided by operating activities .. 3,000 (665)
------- -------
Cash flows from investing activities:
Capital expenditures .......................... (2,030) (2,771)
Purchase of Treasury Stock ........................... (24)
Other, net .................................... (199) (81)
------- -------
Net cash used by investing activities (2,229) (2,876)
------- -------
Cash flows from financing activities:
Notes payable, net .................................. (119) 1,680
Deferred income ..................................... 120 0
Net cash provided (used) by
------- -------
Financing activities ................... 1 1,680
------- -------
Net increase/(decrease) in cash .......................... 772 (1,861)
Cash and cash equivalents, beginning of period ........... 3,544 4,526
------- -------
Cash and cash equivalents, end of period ................. $ 4,316 $ 2,665
======= =======
SEE NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
5
EVANS SYSTEMS, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A -- BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. They do not include all information and notes required
by generally accepted accounting principles for complete financial statements.
However, except as disclosed herein, there has been no material change in the
information disclosed in the notes to the consolidated financial statements
included in Form 10-K of Evans Systems, Inc. (the Company) for the year ended
September 30, 1995. In the opinion of Management, all adjustments (consisting
only of normal recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the six month period ended March 31,
1996 are not necessarily indicative of the results that may be expected for the
year ending September 30, 1996.
NOTE B -- ACCOUNTING STANDARDS
In October 1995, the Financial Accounting Standards Board issued FAS 123,
Accounting for Awards of Stock-Based Compensation to Employees. The Statement
encourages the fair value based method of accounting for an employee stock
option; however, the Statement allows entities to continue to measure
compensation costs for plans using the intrinsic value based method of
accounting prescribed by Accounting Principles Board Opinion No. 25, Accounting
for Stock Issued to Employees. Under the fair value based method, compensation
cost is measured at the grant date based on the value of the award and is
recognized over the service period. Adoption of the Statement is not required by
the Company until fiscal 1997. The Company does not believe that the effect of
this Statement on future results of operations will be material.
NOTE C -- SEASONAL NATURE OF BUSINESS
The refined petroleum products market customarily experiences competitive
margins in the fall and winter followed by increased demand during the spring
and summer when construction, travel, and recreational activities increase.
6
NOTE D -- INVENTORIES
Inventories consist of the following:
MARCH 31, 1996 SEPTEMBER 30, 1995
-------------- ------------------
PETROLEUM MARKETING
Refined Petroleum Products .......... 2,903,136 3,167,971
Non-Petroleum Products ............. 463,347 604,836
CONVENIENCE STORES
Refined Petroleum Products ........... 745,057 697,867
Non-Petroleum Products .............. 1,009,854 1,133,555
CHEMWAY
Aerosol Chemical Products ............ 1,961,976 2,071,812
Liquid Automotive Products ........... 329,373 339,031
EDCO ENVIRONMENTAL
Environmental Remediation Products .. 262,540 134,971
TOTAL INVENTORIES ........................ 7,675,283 8,150,043
NOTE E -- EARNINGS (LOSS) PER SHARE
Earnings (loss) per common and common equivalent share for the quarters ended
March 31, 1996 and 1995 were computed using 2,865,072 and 2,889,050 weighted
average common shares outstanding plus 47,003 and 55,510 weighted average shares
of common stock equivalents, respectively. Earnings per common and common
equivalent share for the six months ended March 31, 1996 and 1995 were computed
using 2,865,072 and 2,890,931 common shares outstanding plus 49,923 and 49,177
weighted average shares of common stock equivalents, respectively.
Common stock equivalents are based on the assumed issuance of common stock for
dilutive options and warrants net of assumed repurchase of common shares based
upon the treasury stock method.
7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
Segment results of operations have been restated for the quarters ended 1996 and
1995. The Way Energy segment has been restated into the Petroleum Marketing and
Convenience Store segments. Distributor Information Systems Corporation is
included in the Petroleum Marketing results. The Convenience Store operations
previously reported in the Way Energy segment are presented separately to
provide a more meaningful and comparative relationship to comparable industries.
The following table reflects the operating results of the Company's business
segments for the Three Months ended March 31, 1996 and 1995.
THREE MONTHS ENDED
----------------------------------
MARCH 31, 1996 MARCH 31, 1995
-------------- ---------------
PETROLEUM MARKETING(1)
Revenue ............................ $ 21,604,000 $ 22,988,000
Operating Income ................... (110,000) 30,000
CONVENIENCE STORES
Revenue ............................ 9,789,000 9,072,000
Operating Income ................... 94,000 56,000
CHEMWAY
Revenue ............................ 5,305,000 3,095,000
Operating Income ................... 167,000 99,000
EDCO ENVIRONMENTAL
Revenue ............................ 733,000 414,000
Operating (Loss) .................. (65,000) (96,000)
TOTAL
Revenue ............................ $ 37,431,000 35,569,000
Operating Income ................... 86,000 89,000
(1) Includes the Parent Company
The Company's (ESI's) after-tax profits for the Three Months ended March 31,
1996 and 1995 respectively were $50,000 and $8,000. Management attributes the
after-tax profit increase of $42,000 in 1996 over 1995 mainly to a $78,000
increase in other income, reduced by a $33,000 increase in income taxes. ESI's
revenues for the Three Months ended March 31, 1996, were $37,431,000 compared to
$35,569,000 for the comparable period ending March 31, 1995. The $1,862,000
(5.2%) three-month increase in this year's revenues was attributable to
increases in Convenience Stores $717,000; ChemWay $2,210,000; EDCO Environmental
$319,000; and a decrease in Petroleum Marketing of $1,384,000. ESI's gross
profits for the Three Months ended March 31, 1996 were $4,608,000 (12.3%)
compared to $4,448,000 (12.5 %) for the comparable Three Months ended March 31,
1995.
8
Operating expenses increased to $4,522,000 in 1996 compared to $4,359,000 in
1995. Operating expenses increased $163,000 in 1996, but were a lower percentage
of revenues. Operating expenses were 12.1 percent of revenues in 1996 and 12.3
percent in 1995. The Company began realigning its organization structure at the
end of December 1995 to refocus on its Petroleum Marketing and Convenience Store
segments. This realignment was completed by the middle of March 1996.
PETROLEUM MARKETING
The Petroleum Marketing segment sales were $21,604,000 in 1996 compared to
$22,988,000 in 1995, a $1,384,000 (6.0%) decrease. Fuel sales gallonage
decreased to 20,816,000 gallons compared to 22,211,000 in 1995, a 1,395,000
(6.3%) decrease. Gross profits for 1996 and 1995 were $1,926,000 and $2,213,000
respectively. Gross profit margins decreased to 8.9 percent compared to 9.6
percent in 1995. Margins were effected by continued competitive pricing and a
reduction in higher margin commercial and industrial business. Operating
expenses decreased $147,000 in 1996. Operating expenses were 9.4 percent of
revenues in 1996, and 9.5 percent in 1995. Management attributes the decrease to
employment expenses ($93,000); transportation ($58,000); general and
administrative expenses ($66,000); and an increase in repairs to buildings and
fuel dispensing equipment $49,000; and depreciation $21,000. ESI, the parent
company, is included in the Petroleum Marketing results. Operating income (loss)
decreased to ($110,000) compared to $30,000 in 1995.
CONVENIENCE STORES
The Convenience Store segment sales were $9,789,000 in 1996 compared to
$9,072,000 in 1995; a $717,000 (7.9%) increase. Fuel sales increased to
$5,786,000 in 1996 compared to $5,427,000. Fuel sales gallonage increased to
5,125,000 gallons compared to 4,834,000 in 1995; a 291,000 (6.0%) increase.
Merchandise sales increased to $3,823,000 in 1996 compared to $3,502,000 and
other income increased to $180,000 compared to $143,000. Management attributes
the increase in sales to fuel $359,000; merchandise sales of $321,000, and other
income of $37,000. These revenues increased because of competitive fuel pricing,
upgrades to store image, and co-branding initiatives. Gross profit for 1996 and
1995 was $1,869,000 and $1,780,000 respectively. Management attributes the
$89,000 increase mainly to a $170,000 increase in merchandise gross profits and
other income of $37,000 and a ($118,000) decrease in fuel gross profits created
by competitive pricing. Gross profit margins decreased to 19.1% in 1996 compared
to 19.6% in 1995. Gross profit margins on fuel sales decreased to 9.0% compared
to 11.8%; merchandise margins increased to 30.5% compared to 28.5% in 1995.
Operating expenses increased $51,000 in 1996. Operating income increased to
$94,000 compared to $56,000 in 1995.
CHEMWAY
ChemWay sales were $5,305,000 in 1996 compared to $3,095,000 in 1995. The
$2,210,000 (71.4%) increase in revenue was mainly attributable to an expanded
customer base and the addition of new products. Gross profit for three months
was $630,000 and $359,000 respectively. Gross profit margins increased to 11.9
percent compared to 11.6 percent in 1995. Operating expenses increased $203,000
in 1996 compared to 1995. The $203,000 increase was mainly attributable to
employment expenses of $124,000; transportation $40,000; facility and equipment
maintenance $26,000; general and administrative $5,000; and depreciation $8,000,
all of which are related to increased revenues. Operating income for the quarter
ended March 31, 1996 and 1995 respectively was $167,000 and $99,000.
9
EDCO ENVIRONMENTAL
EDCO Environmental sales were $733,000 compared to $414,000 in 1995. Gross
profit for three months was $181,000 and $95,000 respectively. Gross profit
margins increased to 24.7 percent compared to 22.9 percent in 1995 due to the
addition of its equipment and construction department. Operating expenses
increased to $54,000 in 1996 compared to 1995. The $54,000 increase was mainly
attributable to its first Matrix application process. Operating (loss) for the
quarters ended March 31, 1996 and 1995 respectively were ($65,000) and
($96,000). The $31,000 loss decrease was mainly attributable to increased
margins from new construction work.
10
SIX MONTHS ENDED MARCH 31, 1996 AND 1995
The following table reflects the operating results of the Company's business
segments for the six months ended March 31, 1996 and 1995.
SIX MONTHS ENDED
--------------------------------
MARCH 31, 1996 MARCH 31, 1995
-------------- ---------------
PETROLEUM MARKETING(1)
Revenue ............................ $ 41,977,000 $ 43,634,000
Operating Income (Loss) ............ (89,000) 273,000
CONVENIENCE STORES
Revenue ............................ 18,788,000 18,454,000
Operating Income ................... 102,000 525,000
CHEMWAY
Revenue ............................ 14,456,000 8,492,000
Operating Income ................... 577,000 304,000
EDCO ENVIRONMENTAL
Revenue ............................ 1,337,000 780,000
Operating (Loss) .................. (177,000) (127,000)
TOTAL
Revenue ............................ $ 76,558,000 $ 71,360,000
Operating Income ................... 413,000 975,000
(1) Includes the Parent Company
The Company's operating revenues for the six months ended March 31, 1996, were
$76,558,000 compared to $71,360,000 for the comparable period ending March 31,
1995. The $5,198,000 six month increase in this year's revenues was attributable
to the following business segments: Convenience Store revenues $334,000; ChemWay
$5,964,000; and EDCO Environmental $557,000, and a decrease in Petroleum
Marketing of $1,657,000. The Company's gross profit for the six months ended
March 31, 1996 was $9,240,000 (12.1%) compared to $9,495,000 (13.3%) for the
comparable six months ended March 31, 1995. Operating expenses were $8,827,000
and $8,520,000 for the six months ended March 31, 1996 and 1995, a $307,000
increase. The increase was mainly attributable to ChemWay's growth where
expenses increased $376,000 on improved profits, EDCO Environmental $87,000;
Convenience Stores $165,000 and a decrease in Petroleum Marketing of ($323,000).
The Company's after-tax profits for the six months ended March 31, 1996 and 1995
respectively were $88,000 and $505,000. Management attributes the after-tax
profit decrease mainly to a decline in fuel margins incurred during this period.
11
PETROLEUM MARKETING
The Petroleum Marketing segment sales were $41,977,000 for the six months ended
March 31, 1996 compared to $43,634,000 in 1995. The $1,657,000 decrease in
revenue was mainly attributable to a decrease in commercial and industrial
sales. Fuel sales gallonage decreased to 41,672,000 gallons compared to
43,773,000 in 1995; a 2,101,000 decrease. Gross profits for the six month period
ended March 31, 1996 and 1995 respectively were $3,853,000 and $4,538,000. Gross
profit margins decreased to 9.2 percent compared to 10.4 percent in 1995.
Operating expenses decreased to $3,942,000 compared to $4,265,000 in 1996.
Operating expenses were 9.4 percent of revenues in 1996 and 9.8 percent in 1995.
Management attributes the $323,000 decrease to decreased employment expenses
($231,000); transportation ($67,000); general administrative expenses ($166,000)
; and increases in depreciation $59,000 and repairs to buildings and fuel
dispensing equipment of $82,000. ESI, the parent company, is included in the
Petroleum Marketing results. Operating income/loss decreased to ($89,000) for
the six month period ended March 31, 1996 compared to $273,000 for the
comparable six month period in 1995.
CONVENIENCE STORES
The Convenience Store segment sales were $18,788,000 for the six month period
ended March 31, 1996 compared to $18,454,000 for the comparable six month period
in 1995. Fuel sales decreased to $10,915,000 for 1996 compared to $11,088,000
for 1995, a $173,000 decrease. Fuel sales gallonage decreased to 9,762,000 for
the six month period ended March 31, 1996 compared to 9,780,000 for the
comparable six month period in 1995. Merchandise sales increased to $7,535,000
compared to $7,064,000 and other income increased to $338,000 compared to
$303,000 for the comparable six month period in 1995. Management attributes the
$334,000 increase to merchandise sales $472,000; other income $35,000; and a
decrease in fuel sales of $173,000. Gross profit for the six month period ended
March 31, 1996 and 1995 was $3,673,000 and $3,931,000 respectively. Management
attributes the $258,000 decrease mainly to a $220,000 increase in merchandise
gross profits and other income of $35,000 and a ($513,000) decrease in fuel
gross profits created by competitive pricing. Gross profit margins decreased to
19.6 percent for the six month period ended March 31, 1996 compared to 21.3
percent for 1995. Gross profit margins on fuel sales decreased to 10.0 percent
compared to 14.5 percent; merchandise margins increased to 29.8 percent compared
to 28.7 percent for 1995. Operating expenses increased to $3,572,000 for the six
month period ended March 31, 1996 compared to $3,407,000 for the comparable six
month period in 1995. Operating income decreased to $102,000 for 1996 compared
to $525,000 in 1995. Management attributes the decrease to a lower gross profit
of $258,000 centered in fuel and increased expenses of $165,000.
CHEMWAY
ChemWay sales were $14,456,000 for the six months ended March 31, 1996 compared
to $8,492,000 for the comparable six month period ended March 31, 1995. The
$5,964,000 (70.2%) increase in revenue was mainly attributable to an expanded
customer base and the addition of new products.
12
Gross profit for 1996 and 1995 was $1,429,000 and $780,000 respectively. Gross
profit margins increase to 9.9 percent compared to 9.2 percent in 1995.
Operating expenses increased $376,000 in 1996 compared to 1995. Increases in
operating expenses were mainly centered in employment expense $225,000;
transportation $55,000; facility and equipment maintenance $63,000; depreciation
$21,000; and general and administrative expenses of $12,000. Operating income
increased to $577,000 compared to $304,000 in 1995.
EDCO ENVIRONMENTAL
EDCO Environmental sales were $1,337,000 compared to $780,000 in 1995. Gross
profit for the six months was $284,000 and $247,000 respectively. Gross profit
margins decreased to 21.2 percent in 1996 compared to 31.6 percent in 1995.
Operating expenses increased $87,000 in 1996 compared to 1995. Increases were
mainly attributable to employment expenses $38,000; transportation $5,000;
maintenance $22,000; general and administrative $8,000; and depreciation
$14,000. Operating (loss) for the six months ended March 31, 1996 and 1995
respectively was ($177,000) compared to ($127,000). The $50,000 loss increase
was mainly attributable to its first application of the Matrix process, and
higher operating expenses on lower margin percentages.
CAPITAL RESOURCES AND LIQUIDITY
Cash, cash equivalents and marketable securities were $6,126,000 as of March 31,
1996 compared to $5,570,000 for September 30, 1995. Working capital was
$3,332,000 as of March 31, 1996, a decrease from $4,868,000 as of September 30,
1995. The decrease in working capital was largely attributable to a $1,145,000
increase in our current portion of long-term debt and an increase in trade
payables.
Cash provided from operations was $3,000,000 as of March 31, 1996 compared to
($665,000) for the same period ending March 31, 1995.
ESI's current ratio, the ratio of current assets to current liability, was 1.17
as of March 31, 1996 and 1.29 as of September 30, 1995.
ESI utilized proceeds from its $7,200,000 line of credit up to a maximum of
$4,785,000 in 1996 to fund operations. As of March 31, 1996, ESI had $2,415,000
available in unused lines of credit. The Company's credit facilities of
$4,500,000 with one financial institution was renewed on March 29, 1996 and will
expire July 29, 1996. This facility offered to renew the line, but at a rate and
terms not acceptable to the Company. A second credit facility of $2,200,000 was
renewed on April 24, 1996 and will expire July 23, 1996. The Company is
negotiating with other financial institutions to replace these facilities and
does not anticipate any difficulty in obtaining them, but cannot be certain they
will be obtained.
The Company is focused on improving its core business profitability and does not
anticipate any major acquisitions or capital outlays in the next six months. ESI
anticipates that existing sources of liquidity and cash flow from operations
will be sufficient to satisfy presently anticipated cash needs.
PART II. OTHER INFORMATION
EXHIBITS AND REPORTS ON FORM 8-K
A. EXHIBITS INDEX
EXHIBITS
10.1
B. REPORTS ON FORM 8-K
No report on Form 8-K has been filed during the quarter for which this report
is filed.
SIGNATURE
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.
EVANS SYSTEMS, INC.
(REGISTRANT)
Date: May 14, 1996 By: /s/CHARLES N. WAY
Charles N. Way
Vice President and Chief Financial
Officer And authorized to sign on
behalf of the Registrant
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM BALANCE SHEET AND STATEMENT OF INCOME AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> MAR-31-1996
<CASH> 4,316
<SECURITIES> 1,810
<RECEIVABLES> 6,676
<ALLOWANCES> 50
<INVENTORY> 7,675
<CURRENT-ASSETS> 22,825
<PP&E> 30,419
<DEPRECIATION> 11,348
<TOTAL-ASSETS> 43,515
<CURRENT-LIABILITIES> 19,493
<BONDS> 0
0
0
<COMMON> 29
<OTHER-SE> 18,615
<TOTAL-LIABILITY-AND-EQUITY> 43,515
<SALES> 37,431
<TOTAL-REVENUES> 37,431
<CGS> 32,823
<TOTAL-COSTS> 37,345
<OTHER-EXPENSES> (234)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 255
<INCOME-PRETAX> 65
<INCOME-TAX> 15
<INCOME-CONTINUING> 50
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 50
<EPS-PRIMARY> 0.02
<EPS-DILUTED> 0
</TABLE>
