As filed with the Securities and Exchange Commission on August 13, 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 JUNE 30, 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
(State or other jurisdiction
of incorporation or organization)
74-1613155
(I.R.S. Employer
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 August 13, 1996:
2,865,572
1
EVANS SYSTEMS, INC.
INDEX
PART I. FINANCIAL INFORMATION
Financial Statements (Unaudited) Page Number
Condensed Consolidated Balance Sheet
June 30, 1996 and September 30, 1995 3
Condensed Consolidated Statement of Income
Three Months and Nine Months Ended June 30, 1996 and 1995 4
Condensed Consolidated Statement of Cash Flows
Nine Months Ended June 30, 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
PART I. FINANCIAL INFORMATION
EVANS SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
June 30, September 30,
1996 1995
-------- --------
(in thousands) (in thousands)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents ........................... $ 4,226 $ 3,544
Marketable equity securities ........................ 1,755 2,026
Trade receivables, net of allowance
for
of $50,000 and $50,000 ............................. 7,233 6,367
Inventory ........................................... 8,565 8,150
Prepaid expenses and other current assets ........... 1,177 1,387
Income taxes receivable ............................. 92 92
-------- --------
Total current assets ......................... 23,048 21,566
-------- --------
Property, plant and equipment, net ..................... 19,744 17,623
-------- --------
Other assets:
Intangible assets, net .............................. 479 444
Other ............................................... 1,157 976
-------- --------
Total other assets ........................... 1,635 1,420
-------- --------
Total assets ................................. $ 44,428 $ 40,609
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses ............... 10,890 9,512
Accrued excise and other taxes payable .............. 2,014 1,738
Current portion of long-term debt ................... 6,700 5,423
Deferred income taxes ............................... -0- 25
-------- --------
Total current liabilities .................... 19,604 16,698
Long-term debt ......................................... 4,237 4,663
Deferred income taxes .................................. 714 714
Deferred income ........................................ 119 0
-------- --------
Total liabilities ............................ 24,674 22,075
-------- --------
Commitments and contingencies
Stockholders' equity:
Common stock $0.01 par value, 15,000,000 shares
authorized, 2,934,205 shares issued and .......... 29 29
outstanding
Additional paid-in capital ............................. 11,381 11,381
Retained earnings ................................... 9,140 7,958
Net unrealized loss on marketable equity securities . (362) (400)
Treasury stock, 69,133 common shares at cost ........ (434) (434)
-------- --------
Total stockholders' equity ................... 19,754 18,534
-------- --------
Total liabilities and stockholders' equity ... $ 44,428 $ 40,609
======== ========
</TABLE>
SEE NOTES TO THE CONDENSED FINANCIAL STATEMENTS
3
EVANS SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
Three Months Ended Nine Months Ended
June 30, June 30,
1996 1995 1996 1995
-------- -------- --------- ---------
(in thousands, except per share amounts)
Revenue:
Refined product sales ....... $ 30,072 $ 32,633 $ 82,182 $ 86,353
Other sales and services .. 13,402 12,283 37,850 29,923
-------- -------- --------- ---------
Total revenue .......... 43,474 44,916 120,032 116,276
Cost of sales: .............. 36,566 40,262 103,883 102,127
-------- -------- --------- ---------
Gross profit: ............... 6,908 4,654 16,149 14,149
-------- -------- --------- ---------
Operating expenses:
Employment expenses ....... 2,753 2,258 7,382 6,544
Other operating expenses .. 1,056 961 3,073 2,811
General & administrative
expenses .......... 927 890 2,503 2,775
Depreciation and
amortization ................ 344 281 950 780
-------- -------- --------- ---------
Total operating expenses 5,080 4,390 13,908 12,910
-------- -------- --------- ---------
Operating income ............ 1,828 264 2,241 1,239
Other income/expense
Interest expense .......... (220) (225) (706) (555)
Other income net .......... 85 169 267 303
-------- -------- --------- ---------
Income/(Loss) before
provision for income taxes .. 1,693 208 1,802 987
Provision for income taxes: . (596) (71) (617) (345)
-------- -------- --------- ---------
Net income .................. $ 1,097 $ 137 $ 1,185 $ 642
======== ======== ========= =========
Earnings per share .......... $ 0.37 $ 0.05 $ 0.40 $ 0.22
SEE NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
4
EVANS SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
JUNE 30,
1996 1995
------- -------
(in thousands) (in thousands)
<S> <C> <C>
Cash flows from operating activities:
Net income ....................................... $ 1,185 $ 642
Non-cash adjustments:
Depreciation and amortization .............. 950 780
Changes in:
Current assets ......................... (838) (4,068)
Current liabilities .................... 2,904 4,900
Other, net ................................. 37 37
------- -------
Net cash provided by operating activities 4,238 2,291
------- -------
Cash flows from investing activities:
Capital expenditures ............................. (3,034) (3,880)
Purchase of Treasury Stock ............................... (153)
Other, net ....................................... (215) (211)
------- -------
Net cash used by investing activities .. (3,249) (4,244)
------- -------
Cash flows from financing activities:
Notes payable, net ............................... (307) 1,537
Deferred income .................................. 0
Net cash provided (used) by
------- -------
Financing activities ................ (307) 1,537
------- -------
Net increase/(decrease) in cash ....................... 682 (416)
Cash and cash equivalents, beginning of period ........ 3,544 4,526
------- -------
Cash and cash equivalents, end of period .............. $ 4,226 $ 4,110
======= =======
</TABLE>
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 nine month period ended June 30,
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:
JUNE 30, SEPTEMBER 30,
1996 1995
------------- -------------
PETROLEUM MARKETING
Refined Petroleum Products .................. 3,098,323 3,167,971
Non-Petroleum Products ..................... 474,309 604,836
CONVENIENCE STORES
Refined Petroleum Products ................... 674,622 697,867
Non-Petroleum Products ...................... 1,032,144 1,133,555
CHEMWAY
Aerosol Chemical Products .................... 316,917 2,071,812
Liquid Automotive Products ................... 2,757,123 339,031
EDCO ENVIRONMENTAL
Environmental Remediation Products .......... 211,384 134,971
TOTAL INVENTORIES ................................ 8,564,822 8,150,043
NOTE E -- EARNINGS (LOSS) PER SHARE
Earnings (loss) per common and common equivalent share for the quarters ended
June 30, 1996 and 1995 were computed using 2,865,204 and 2,880,584 weighted
average common shares outstanding plus 82,212 and 64,296 weighted average shares
of common stock equivalents, respectively. Earnings per common and common
equivalent share for the nine months ended June 30, 1996 and 1995 were computed
using 2,865,116 and 2,887,482 common shares outstanding plus 64,132 and 52,788
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 JUNE 30, 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 June 30, 1996 and 1995.
Three Months Three Months
Ended Ended
JUNE 30, 1996 JUNE 30, 1995
-------- ---------
( in thousands )
PETROLEUM MARKETING(1)
Revenue .................................. $ 24,057 $ 26,569
Operating Income ......................... 389 (10)
CONVENIENCE STORES
Revenue .................................. 10,813 10,815
Operating Income ......................... 232 1
CHEMWAY
Revenue .................................. 8,063 7,136
Operating Income ......................... 1,364 303
EDCO ENVIRONMENTAL
Revenue .................................. 541 396
Operating (Loss) ........................ (157) (30)
TOTAL
Revenue .................................. $ 43,474 $ 44,916
Operating Income ......................... 1,828 264
(1) Includes the Parent Company
The Company's (ESI's) after-tax profits for the Three Months ended June 30, 1996
and 1995 respectively were $1,097,000 and $137,000. Management attributes the
after-tax profit increase of $960,000 in 1996 over 1995 mainly to the improved
operating results in ChemWay, Petroleum Marketing, and Convenience Store
operations partially offset by the decline in EDCO Environmental's increased
loss. Operating revenues for the Three Months ended June 30, 1996 were
$43,474,000 compared to $44,916,000 for the comparable period ending June 30,
1995. The $1,442,000 (3.2%) three month decrease in this year's revenues was
attributable to increases in ChemWay $927,000; EDCO Environmental $145,000; and
a decrease in Convenience Stores $2,000 and in Petroleum Marketing $2,512,000.
ESI's gross profits for the Three Months ended June 30, 1996 were $6,908,000
(15.9%) compared to $4,654,000 (10.4%) for the comparable Three Months ended
June 30, 1995.
8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS - CONTINUED
Operating expenses increased to $5,080,000 in 1996 compared to $4,390,000 in
1995. Operating expenses increased $690,000 in 1996. The increase was mainly
attributable to ChemWay's growth where expenses increased on improved profits,
and the Convenience Store's growth in co-branding which increased wages and
store maintenance expenses.
PETROLEUM MARKETING
The Petroleum Marketing segment sales were $24,057,000 in 1996 compared to
$26,569,000 in 1995, a $2,512,000 (9.5%) decrease. Fuel sales gallonage
decreased to 20,977,000 gallons compared to 26,321,000 in 1995, a 5,344,000
(20.3%) decrease. Gross profits for 1996 and 1995 were $2,469,000 and $2,070,000
respectively. Gross profit margins increased to 10.3 percent compared to 7.8
percent in 1995. Margins increased by a reduction in low margin rack sales to
other wholesalers and improved seasonal conditions in the industry. Operating
expenses increased $2,000 in 1996. Operating expenses were 8.7 percent of
revenues in 1996, and 7.8 percent in 1995. ESI, the parent company, is included
in the Petroleum Marketing results. Operating income increased to $389,000
compared to a loss of $(10,000) in 1995.
CONVENIENCE STORES
The Convenience Store segment sales were $10,813,000 in 1996 compared to
$10,815,000 in 1995; a $2,000 decrease. Fuel sales decreased to $6,381,000 in
1996 compared to $6,553,000. Fuel sales gallonage decreased to 5,034,000 gallons
compared to 5,521,000 in 1995; a 487,000 (8.8%) decrease. Merchandise sales
increased to $4,264,000 in 1996 compared to $4,171,000 and other income
increased to $168,000 compared to $91,000. The company currently operates 39
locations compared to 44 locations (43 with fuel) in 1995. Gross profit for 1996
and 1995 was $2,260,000 and $1,798,000 respectively, a $462,000 (25.7%)
increase. Management attributes the increase mainly to a $273,000 increase in
merchandise gross profits, a $112,000 increase in fuel, and other income of
$77,000. Gross profit margins increased to 20.9% in 1996 compared to 16.6% in
1995. Gross profit margins on fuel sales increased to 11.0% compared to 9.0%;
merchandise margins increased to 32.6% compared to 26.8% in 1995. Operating
expenses increased $231,000 in 1996. Operating income increased to $232,000
compared to $1,000 in 1995.
CHEMWAY
ChemWay sales were $8,063,000 in 1996 compared to $7,136,000 in 1995. The
$927,000 (13.0%) increase in revenue was mainly attributable to an expanded
customer base in all 50 states, new customers in four overseas countries, and
the addition of new products. Gross profit for three months was $2,065,000 and
$612,000 respectively. Gross profit margins increased to 25.6 percent compared
to 8.6 percent in 1995. A major contributing factor to the increase in margins
was attributable to increase margins on R-12 created by high demand. Operating
expenses increased $387,000 in 1996 compared to 1995. The $392,000 increase was
mainly attributable to employment expenses of $308,000 centered in accrued
employment contract bonuses and labor costs on increased production;
transportation $51,000; facility and equipment maintenance $25,000; and
depreciation $8,000, all of which are related to increased revenues. Operating
income for the quarter ended June 30, 1996 and 1995 respectively was $1,364,000
and $303,000.
9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS - CONTINUED
EDCO ENVIRONMENTAL
EDCO Environmental sales were $541,000 compared to $396,000 in 1995. Gross
profit for three months was $115,000 and $174,000 respectively. Gross profit
margins decreased to 21.3 percent compared to 44.1 percent in 1995. Gross profit
margin percentage fell due primarily to low margin equipment sales and
competitive pricing on construction work. With the TNRCC (Texas Natural Resource
Conservation Commission) fund now fully funded, management is focusing on TNRCC
remediation work. This work produces higher margins and requires less overhead
to support the work. Operating expenses increased $68,000 in 1996 compared to
1995. The $68,000 increase was mainly attributable to increased employee costs
of $25,000; depreciation $8,000; transportation and equipment costs $34,000; and
general and administrative $1,000. The higher operating expenses are a result of
the service department overhead and high maintenance of Matrix and construction
equipment. Operating (loss) for the quarters ended June 30, 1996 and 1995
respectively were ($157,000) and ($30,000). The $127,000 loss increase was
mainly attributable to higher operating expenses and reduced margins.
10
NINE MONTHS ENDED JUNE 30, 1996 AND 1995
The following table reflects the operating results of the Company's business
segments for the nine months ended June 30, 1996 and 1995.
Nine Months Nine Months
Ended Ended
JUNE 30, 1996 JUNE 30, 1995
--------- ---------
(in thousands)
PETROLEUM MARKETING(1)
Revenue .................................. $ 66,034 $ 70,203
Operating Income (Loss) .................. 300 263
CONVENIENCE STORES
Revenue .................................. 29,601 29,269
Operating Income ......................... 334 525
CHEMWAY
Revenue .................................. 22,519 15,628
Operating Income ......................... 1,941 608
EDCO ENVIRONMENTAL
Revenue .................................. 1,878 1,176
Operating (Loss) ........................ (334) (157)
TOTAL
Revenue .................................. $ 120,032 $ 116,276
Operating Income ......................... 2,241 1,239
(1) Includes the Parent Company
The Company's operating revenues for the nine months ended June 30, 1996, were
$120,032,000 compared to $116,276,000 for the comparable period ending June 30,
1995. The $3,756,000 nine month increase in this year's revenues was
attributable to the following business segments: ChemWay $6,891,000; EDCO
Environmental $702,000, Convenience Store revenues $332,000 and a decrease in
Petroleum Marketing of $4,169,000. The Company's gross profit for the nine
months ended June 30, 1996 was $16,149,000 (13.5%) compared to $14,149,000
(12.2%) for the comparable nine months ended June 30, 1995. Operating expenses
were $13,908,000 and $12,910,000 for the nine months ended June 30, 1996 and
1995, a $998,000 increase. The increase was mainly attributable to ChemWay's
growth where expenses increased $769,000 on improved profits, EDCO Environmental
$155,000; Convenience Stores $395,000 and a decrease in Petroleum Marketing of
$323,000. The Company's after-tax profits for the nine months ended June 30,
1996 and 1995 respectively were $1,185,000 and $642,000. Management attributes
the after-tax profit increase mainly to ChemWay's growth.
11
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS- CONTINUED
PETROLEUM MARKETING
The Petroleum Marketing segment sales were $66,034,000 for the nine months ended
June 30, 1996 compared to $70,203,000 in 1995. The $4,169,000 decrease in
revenue was mainly attributable to a decrease in rack sales to other
wholesalers. Fuel sales gallonage decreased to 62,649,000 gallons compared to
70,094,000 in 1995; a 7,445,000 decrease. Gross profits for the nine month
period ended June 30, 1996 and 1995 respectively were $6,322,000 and $6,608,000.
Gross profit margins increased to 9.6 percent compared to 9.4 percent in 1995.
Operating expenses decreased to $6,022,000 compared to $6,345,000 in 1995.
Operating expenses were 9.1 percent of revenues in 1996 and 9.0 percent in 1995.
Management attributes the $323,000 decrease to employment expenses ($269,000);
transportation ($71,000); general administrative expenses ($164,000) ; and
increases in depreciation $91,000 and repairs to buildings and fuel dispensing
equipment of $90,000. ESI, the parent company, is included in the Petroleum
Marketing results. Operating income increased to $300,000 for the nine month
period ended June 30, 1996 compared to $263,000 for the comparable nine month
period in 1995.
CONVENIENCE STORES
The Convenience Store segment sales were $29,601,000 for the nine month period
ended June 30, 1996 compared to $29,269,000 for the comparable nine month period
in 1995. Fuel sales decreased to $17,296,000 for 1996 compared to $17,641,000
for 1995, a $345,000 decrease. Fuel sales gallonage decreased to 14,796,000 for
the nine month period ended June 30, 1996 compared to 15,301,000 for the
comparable nine month period in 1995. Merchandise sales increased to $11,800,000
compared to $11,235,000 and other income increased to $506,000 compared to
$394,000 for the comparable nine month period in 1995. Management attributes the
$332,000 increase to merchandise sales $565,000; other income $112,000; and a
decrease in fuel sales of $345,000. Gross profit for the nine month period ended
June 30, 1996 and 1995 was $5,933,000 and $5,729,000 respectively. Management
attributes the $204,000 increase mainly to a $494,000 increase in merchandise
gross profits and other income of $112,000 and a $402,000 decrease in fuel gross
profits created by competitive pricing in the first two quarters and fewer
company-owned locations. Gross profit margins increased to 20.0 percent for the
nine month period ended June 30, 1996 compared to 19.6 percent for 1995. Gross
profit margins on fuel sales decreased to 10.4 percent compared to 12.4 percent;
merchandise margins increased to 30.8 percent compared to 28.0 percent for 1995.
Operating expenses increased to $5,599,000 for the nine month period ended June
30, 1996 compared to $5,204,000 for the comparable nine month period in 1995.
Operating income decreased to $334,000 for 1996 compared to $525,000 in 1995.
CHEMWAY
ChemWay sales were $22,519,000 for the nine months ended June 30, 1996 compared
to $15,628,000 for the comparable nine month period ended June 30, 1995. The
$6,891,000 (44.1%) increase in revenue was mainly attributable to an expanded
customer base in all 50 states, new customers in four overseas countries, and
the addition of new products.
12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS- CONTINUED
Gross profit for 1996 and 1995 was $3,493,000 and $1,391,000 respectively. Gross
profit margins increased to 15.5 percent compared to 8.9 percent in 1995.
Operating expenses increased $769,000 in 1996 compared to 1995. Increases in
operating expenses were mainly attributable to employment expense $535,000
centered in accrued employment contract bonuses and labor costs on increased
production; transportation $107,000; facility and equipment maintenance $87,000;
depreciation $29,000; and general and administrative expenses of $11,000.
Operating income increased to $1,941,000 compared to $608,000 in 1995.
EDCO ENVIRONMENTAL
EDCO Environmental sales were $1,878,000 compared to $1,176,000 in 1995. Gross
profit for the nine months was $399,000 and $421,000 respectively. Gross profit
margins decreased to 21.3 percent in 1996 compared to 35.8 percent in 1995.
Margins were lower due to competitive pricing on construction work, low margin
equipment sales and the Matrix job completed in the fiscal second quarter 1996.
Operating expenses increased $155,000 in 1996 compared to 1995. Increases were
mainly attributable to employment expenses $63,000; transportation $10,000;
maintenance $50,000; general and administrative $10,000; and depreciation
$22,000. Operating (loss) for the nine months ended June 30, 1996 and 1995
respectively was ($334,000) compared to ($157,000).
CAPITAL RESOURCES AND LIQUIDITY
Cash, cash equivalents and marketable securities were $5,981,000 as of June 30,
1996 compared to $5,570,000 for September 30, 1995. Working capital was
$3,444,000 as of June 30, 1996, a decrease from $4,868,000 as of September 30,
1995. The decrease in working capital was largely attributable to a $1,277,000
increase in the current portion of long-term debt and an increase in trade
payables.
Cash provided from operations was $4,238,000 as of June 30, 1996 compared to
$2,291,000 for the same period ending June 30, 1995.
ESI's current ratio, the ratio of current assets to current liability, was 1.18
as of June 30, 1996 and 1.29 as of September 30, 1995.
ESI utilized proceeds from its $7,000,000 line of credit up to a maximum of
$4,595,000 in 1996 to fund operations. As of June 30, 1996, ESI had $2,405,000
available in unused lines of credit. The Company's credit facilities of
$4,500,000 with one financial institution was renewed on July 29, 1996 and will
expire September 27, 1996. A second credit facility of $2,200,000 was renewed on
July 23, 1996 and will expire October 23, 1996. The Company has a commitment
letter executed on August 2, 1996 and the loan documents from another financial
institution to replace the two existing lines into one facility. The new
facility is for a term of three years.
It is expected that the Company's continued expansion of its operations will
result in additional uses of funds in the future. However, the company
anticipates that its existing sources of liquidity, its new relationship with a
major financial institution capable of providing term loans for capital
expenditures, and cash flows from operations will be sufficient to satisfy
presently anticipated cash needs for the next twelve months.
13
PART II. OTHER INFORMATION
EXHIBITS AND REPORTS ON FORM 8-K
A. EXHIBITS INDEX
EXHIBITS SEQUENTIAL PAGE NUMBER
10.1 None
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: August 13, 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
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> JUN-30-1996
<CASH> 4,226
<SECURITIES> 1,755
<RECEIVABLES> 7,283
<ALLOWANCES> 50
<INVENTORY> 7,233
<CURRENT-ASSETS> 23,048
<PP&E> 31,446
<DEPRECIATION> 11,702
<TOTAL-ASSETS> 44,428
<CURRENT-LIABILITIES> 19,604
<BONDS> 0
0
0
<COMMON> 29
<OTHER-SE> 19,725
<TOTAL-LIABILITY-AND-EQUITY> 44,428
<SALES> 43,474
<TOTAL-REVENUES> 43,474
<CGS> 36,566
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<OTHER-EXPENSES> (85)
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<INCOME-TAX> 596
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,097
<EPS-PRIMARY> 0.37
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</TABLE>
