As filed with the Securities and Exchange Commission on August 14, 1997
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, 1997
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File Number: 000-21956
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 August 13, 1997:
3,090,939
1
<PAGE>
EVANS SYSTEMS, INC.
INDEX
PART I. FINANCIAL INFORMATION
Financial Statements (Unaudited) Page Number
Condensed Consolidated Balance Sheet
June 30, 1997 and September 30, 1996 3
Condensed Consolidated Statement of Income
Three Months and Nine Months Ended June 30, 1997 and 1996 4
Condensed Consolidated Statement of Cash Flows
Nine Months Ended June 30, 1997 and 1996 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)
<TABLE>
<CAPTION>
JUNE 30, SEPTEMBER 30,
------------------------------
1997 1996
-------- --------
ASSETS (in thousands) (in thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents ....................................................... $ 2,397 $ 2,793
Marketable equity securities .................................................... 16 1,599
Trade receivables, net of allowance for
of $50,000 and $50,000 ........................................................ 5,874 5,160
Inventory ....................................................................... 9,804 8,182
Prepaid expenses and other current assets ....................................... 1,241 955
Income taxes receivable ......................................................... 964 37
-------- --------
Total current assets ..................................................... 20,296 18,726
-------- --------
Property, plant and equipment, net ................................................. 21,261 20,848
-------- --------
Other assets:
Intangible assets, net
Other ........................................................................... 1,162 1,499
-------- --------
Total other assets ....................................................... 1,162 1,499
-------- --------
Total assets ............................................................. $ 42,719 $ 41,073
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses ........................................... $ 8,990 $ 6,051
Accrued excise and other taxes payable .......................................... 2,012 1,511
Current portion of long-term debt ............................................... 2,700 2,145
Deferred income taxes ........................................................... 38 17
-------- --------
Total current liabilities ................................................ 13,740 9,724
Long-term debt ..................................................................... 9,157 10,400
Deferred income taxes .............................................................. 1,201 1,201
Deferred income .................................................................... 76 0
-------- --------
Total liabilities ........................................................ $ 24,174 21,325
-------- --------
Commitments and contingencies
Stockholders' equity:
Preferred Stock $0.01 Par Value, 1,500,000 shares ............................... 0 0
authorized, 0 share issued and outstanding
Additional paid in capital ......................................................... 12,297 12,133
Retained earnings ............................................................... 6,650 8,393
Net unrealized loss on marketable equity securities ............................. 0 (375)
Treasury stock, 69,133 common shares at cost .................................... (434) (434)
-------- --------
Total stockholders' equity ............................................... 18,545 19,748
-------- --------
Total liabilities and stockholders' equity ............................... $ 42,719 $ 41,073
======== ========
</TABLE>
SEE NOTES TO THE CONDENSED FINANCIAL STATEMENTS
3
<PAGE>
EVANS SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, NINE MONTHS ENDED JUNE 30,
------------------------ --------------------------
1997 1996 1997 1996
-------- -------- --------- ---------
(in thousands, except per share amounts)
<S> <C> <C> <C> <C>
Revenue:
Refined product sales ............................................ 29,926 $ 30,072 88,427 $ 82,182
Other sales and services ................................... 8,210 13,402 22,085 37,850
-------- -------- --------- ---------
Total revenue .................................... 38,136 43,474 110,512 120,032
Cost of sales: ................................................... 33,505 36,566 96,823 103,883
-------- -------- --------- ---------
Gross profit: .................................................... 4,631 6,908 13,689 16,149
Operating expenses:
Employment expenses ........................................ 2,474 2,753 7,547 7,382
Other operating expenses ................................... 1,118 1,056 3,239 3,073
General & administrative expenses .......................... 1,055 927 2,866 2,503
Depreciation and amortization ................................. 578 344 1,513 950
-------- -------- --------- ---------
Total operating expenses ......................... 5,225 5,080 15,165 13,908
-------- -------- --------- ---------
Operating income (loss) .......................................... (594) 1,828 (1,476) 2,241
Other income/expense
Interest expense ........................................... (277) (220) (822) (706)
Other income net ........................................... 58 85 (372) 267
-------- -------- --------- ---------
Income/(Loss) before provision for income taxes ................. (813) 1,693 (2,670) 1,802
Provision for income taxes: ...................................... 280 (596) 929 (617)
-------- -------- --------- ---------
Net income (loss) ................................................ $ (533) $ 1,097 $ (1,741) $ 1,185
======== ======== ========= =========
Earnings (Loss) per share ........................................ $ (0.17) $ 0.37 $ (0.56) $ 0.40
</TABLE>
SEE NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
4
<PAGE>
EVANS SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
JUNE 30,
------------------
1997 1996
------- -------
(in thousands) (in thousands)
<S> <C> <C>
Cash flows from operating activities:
Net income .................................................. ($1,741) $ 1,185
Non-cash adjustments:
Depreciation and amortization .................................. 1,513 950
Gain on sale of assets ......................................... (43) --
Loss on reclassification of securities ......................... 375 --
Changes in:
Current assets ............................................. (1,966) (838)
Current liabilities ........................................ 4,016 2,904
Other, net ..................................................... -- 37
------- -------
Net cash provided by operating activities ................... 2,154 4,238
------- -------
Cash flows from investing activities:
Capital expenditures ........................................ (1,881) (3,034)
Purchase of Treasury Stock
Other, net .................................................. 337 (215)
------- -------
Net cash used by investing activities ...................... (1,544) (3,249)
------- -------
Cash flows from financing activities:
Notes payable, net .......................................... (1,242) (307)
Deferred income ............................................. 71 --
Issuance of Common Stock .................................... 165 --
------- -------
Net cash provided (used) by
Financing activities ................................... (1,006) (307)
------- -------
Net increase/(decrease) in cash .................................. (396) 682
Cash and cash equivalents, beginning of period ................... 2,793 3,544
------- -------
Cash and cash equivalents, end of period ......................... 2,397 $ 4,226
======= =======
</TABLE>
SEE NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
5
<PAGE>
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, 1996. 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,
1997 are not necessarily indicative of the results that may be expected for the
year ending September 30, 1997.
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
<PAGE>
NOTE D -- INVENTORIES
Inventories consist of the following:
JUNE 30, 1997 SEPTEMBER 30, 1996
------------- ------------------
PETROLEUM MARKETING
Refined Petroleum Products ............ 2,808 3,197
Non-Petroleum Products ............... 628 638
CONVENIENCE STORES
Refined Petroleum Products ............. 541 492
Non-Petroleum Products ................ 1,446 1,049
CHEMWAY
Aerosol Chemical Products
Liquid Automotive Products ............. 3,409 2,257
607 412
EDCO ENVIRONMENTAL
Environmental Remediation Products .... 365 137
TOTAL INVENTORIES .......................... 9,804 8,182
NOTE E -- EARNINGS (LOSS) PER SHARE
Earnings (loss) per common and common equivalent share for the quarters
ended June 30, 1997 and 1996 were computed using 3,090,939 and 2,865,204
weighted average common shares outstanding plus 8,169 and 82,212 weighted
average shares of common stock equivalents, respectively. Earnings per
common and common equivalent shares for the nine months ended June 30, 1997
and 1996 were computed using 3,069,291 and 2,865,116 common shares
outstanding plus 24,716 and 64,132 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
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1997 AND 1996
The following table reflects the operating results of the Company's business
segments for the Three Months ended June 30, 1997 and 1996.
THREE MONTHS THREE MONTHS
ENDED ENDED
JUNE 30, 1997 JUNE 30, 1996
-------- --------
(in thousands)
PETROLEUM MARKETING(1)
Revenue ............................ $ 24,593 $ 24,057
Operating Income (Loss) ............ (201) 389
CONVENIENCE STORES
Revenue ............................ 10,056 10,813
Operating Income (Loss) ............ (65) 232
CHEMWAY
Revenue ............................ 3,263 8,063
Operating Income (Loss) ............ (320) 1,364
EDCO ENVIRONMENTAL
Revenue ............................ 224 541
Operating (Loss) .................. (8) (157)
TOTAL
Revenue ............................ $ 38,136 $ 43,474
Operating Income (Loss) ............ (594) 1,828
(1) Includes the Parent Company
The Company's (ESI's) after-tax income (loss) for the Three Months ended June
30, 1997 and 1996 respectively were ($533,000) and $1,097,000. Operating
revenues for the Three Months ended June 30, 1997 were $38,136,000 compared to
$43,474,000 for the comparable period ending June 30, 1996. The $5,338,000
(12.3%) three month decrease in this year's revenues was attributable to
decreases in ChemWay $4,800,000; EDCO Environmental $317,000; Convenience
Stores $757,000 and an increase in Petroleum Marketing of $536,000. ESI's
gross profits for the Three Months ended June 30, 1997 were $4,631,000 (12.1%)
compared to $6,908,000 (15.9%) for the comparable Three Months ended June 30,
1996.
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS- CONTINUED
Operating expenses increased to $5,225,000 in 1997 compared to $5,080,000 in
1996. Operating expenses increased $145,000 in 1997. The increase was
mainly attributable to increased depreciation.
PETROLEUM MARKETING
The Petroleum Marketing segment sales were $24,593,000 in 1997 compared to
$24,057,000 in 1996, a $536,000 (2.2%) increase. Fuel sales gallonage
increased to 23,294,000 gallons compared to 20,977,000 in 1996, a 2,317,000
(11.0%) increase. The increase in gallons was mainly in commercial,
industrial and wholesale sales at low margins. Gross profits for 1997 and
1996 were $1,988,000 and $2,469,000, respectively. Gross profit margins
decreased to 8.1 percent compared to 10.3 percent in 1996. Operating
expenses increased $109,000 in 1997. The increase was mainly attributable
to general and administrative $64,000; depreciation $150,000 and decreases in
employment $33,000; transportation $49,000; and facility and equipment
maintenance of $23,000. ESI, the parent company, is included in the
Petroleum Marketing results. Operating income (loss) was $(201,000) compared
to $389,000 in 1996.
CONVENIENCE STORES
The Convenience Store segment sales were $10,056,000 in 1997 compared to
$10,813,000 in 1996; a $757,000 decrease. Fuel sales decreased to $5,679,000
in 1997 compared to $6,381,000. Fuel sales gallonage decreased to 4,715,000
gallons compared to 5,034,000 in 1996; a 319,000 (6.3%) decrease.
Merchandise sales increased to $4,411,000 in 1997 compared to $4,264,000 and
other income was a loss of $(34,000) compared to $168,000 in profit. The
company currently operates 34 locations compared to 43 locations in 1996.
Gross profit for 1997 and 1996 was $2,057,000 and $2,260,000 respectively, a
$203,000 (9%) decrease. Gross profit margins decreased to 20.5% in 1997
compared to 20.9% in 1996. Operating expenses increased $95,000 in 1997
mainly in depreciation, insurance and taxes. Operating income (loss) was
($65,000) compared to $232,000 in 1996.
CHEMWAY
ChemWay sales were $3,263,000 in 1997 compared to $8,063,000 in 1996; a
$4,800,000 (59.5%) decrease. Gross profit for three months was $416,000 and
$2,065,000 respectively. Gross profit margins decreased to 12.7 percent compared
to 25.6 percent in 1996. A major contributing factor to the decrease in revenues
and margins was attributable to the absence of R-12 sales in this quarter
compared to high demand and margins on this product in the same quarter of 1996.
Operating expenses increased $35,000 in 1997 compared to 1996. The $35,000
increase was mainly attributable to transportation $2,000; facility and
equipment maintenance $25,000; depreciation $22,000; general and administrative
expenses $65,000 and a decrease in employment expenses of $79,000. Operating
income(loss) for the quarter ended June 30, 1997 and 1996 respectively was
$(320,000) and $1,364,000.
9
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS- CONTINUED
EDCO ENVIRONMENTAL
EDCO Environmental sales were $224,000 compared to $541,000 in 1996. Gross
profit for three months was $169,000 and $115,000 respectively. Gross profit
margins increased to 75.6 percent compared to 21.3 percent in 1996. Management
attributes the increase in margins mainly to a change in its business plan. From
August 1996 EDCO has concentrated solely on environmental remediation which
produces higher margins and discontinued equipment sales and construction
projects which were characterized by lower margins. Operating expenses decreased
$95,000 in 1997 compared to 1996. The $95,000 decrease was mainly attributable
to employee costs of $63,000; transportation and equipment costs $15,000;
equipment maintenance $22,000 and increases in depreciation $4,000 and general
and administrative expenses of $1,000. Operating (loss) for the quarters ended
June 30, 1997 and 1996 respectively were ($8,000) and ($157,000).
THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK.
10
<PAGE>
NINE MONTHS ENDED JUNE 30, 1997 AND 1996
The following table reflects the operating results of the Company's business
segments for the nine months ended June 30, 1997 and 1996.
Nine Months Nine Months
Ended Ended
JUNE 30, 1997 JUNE 30, 1996
--------- ---------
(in thousands)
PETROLEUM MARKETING(1)
Revenue ............................... $ 72,675 $ 66,034
Operating Income (Loss) ............... (397) 300
CONVENIENCE STORES
Revenue ............................... 29,138 29,601
Operating Income ...................... (328) 334
CHEMWAY
Revenue ............................... 7,781 22,519
Operating Income (Loss) ............... (802) 1,941
EDCO ENVIRONMENTAL
Revenue ............................... 918 1,878
Operating Income (Loss) ............... 51 (334)
TOTAL
Revenue ............................... $ 110,512 $ 120,032
Operating Income (Loss) ............... (1,476) 2,241
(1) Includes the Parent Company
The Company's operating revenues for the nine months ended June 30, 1997, were
$110,512,000 compared to $120,032,000 for the comparable period ending June
30, 1996. The $9,520,000 nine month decrease in this year's revenues was
attributable to the following business segments: ChemWay $14,738,000; EDCO
Environmental $960,000, Convenience Store revenues $463,000 and an increase in
Petroleum Marketing of $6,641,000. The Company's gross profit for the nine
months ended June 30, 1997 was $13,689,000 (12.4%) compared to $16,149,000
(13.5%) for the comparable nine months ended June 30, 1996. Operating
expenses were $15,165,000 and $13,908,000 for the nine months ended June 30,
1997 and 1996, a $1,257,000 increase. The increase was mainly attributable
to ChemWay $400,000; Petroleum Marketing $268,000; Convenience Stores $716,000
and a decrease in EDCO Environmental of $127,000. The Company's after-tax
profit/(loss) for the nine months ended June 30, 1997 and 1996 respectively
were ($1,741,000) and $1,185,000.
11
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS- CONTINUED
PETROLEUM MARKETING
The Petroleum Marketing segment sales were $72,675,000 for the nine months ended
June 30, 1997 compared to $66,034,000 in 1996, a $6,641,000 increase. Fuel
sales gallonage increased to 65,604,000 gallons compared to 62,649,000 in
1996; a 2,955,000 increase. The increase in gallons was mainly in commercial,
industrial and wholesale sales at low margins. Gross profits for the nine
month period ended June 30, 1997 and 1996 respectively were $5,895,000 and
$6,322,000. Gross profit margins decreased to 8.1 percent compared to 9.6
percent in 1996. Operating expenses increased to $6,291,000 compared to
$6,023,000 in 1996. Operating expenses were 8.7 percent of revenues in 1997
and 9.1 percent in 1996. Management attributes the $268,000 increase to
employment expenses $8,000; transportation $12,000; depreciation $344,000 and
decreases in repairs to facilities and equipment $93,000 and general and
administrative expenses of $3,000. ESI, the parent company, is included in the
Petroleum Marketing results. Operating income (loss) was ($397,000) for the
nine month period ended June 30, 1997 compared to $300,000 for the comparable
nine month period in 1996.
CONVENIENCE STORES
The Convenience Store segment sales were $29,138,000 for the nine month period
ended June 30, 1997 compared to $29,601,000 for the comparable nine month
period in 1996. Fuel sales decreased to $16,929,000 for 1997 compared to
$17,296,000 for 1996, a $367,000 decrease. Fuel sales gallonage decreased to
14,608,000 for the nine month period ended June 30, 1997 compared to
14,796,000 for the comparable nine month period in 1996. Merchandise sales
decreased to $11,774,000 compared to $11,800,000 and other income decreased to
$435,000 compared to $506,000 for the comparable nine month period in 1996.
Gross profit for the nine month period ended June 30, 1997 and 1996 was
$5,986,000 and $5,935,000 respectively. Gross profit margins increased to 20.5
percent for the nine month period ended June 30, 1997 compared to 20.0 percent
for 1996. Operating expenses increased to $6,315,000 for the nine month period
ended June 30, 1997 compared to $5,599,000 for the comparable nine month
period in 1996. Operating income (loss) was $328,000 for 1997 compared to
$334,000 in 1996.
CHEMWAY
ChemWay sales were $7,781,000 for the nine months ended June 30, 1997 compared
to $22,519,000 for the comparable nine month period ended June 30, 1996. The
$14,738,000 (65.4%) decrease in revenue was mainly attributable to a decline in
automotive aftermarket refrigerant sales in R-12 products, as well as loss of
aerosol sales created by the aerosol production line being out of service from
November through January for complete refurbishing during the first half of the
fiscal year.
12
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS- CONTINUED
Gross profit for 1997 and 1996 was $1,150,000 and $3,493,000 respectively. Gross
profit margins decreased to 14.8 percent compared to 15.5 percent in 1996.
Operating expenses increased $400,000 in 1997 compared to 1996. Increases in
operating expenses were mainly attributable to employment expense $77,000;
transportation $47,000; facility and equipment maintenance $34,000; depreciation
$53,000; and general and administrative expenses of $189,000, mainly
attributable to insurance, taxes and computer systems. Operating income(loss)
was $(802,000) compared to $1,941,000 in 1996.
EDCO ENVIRONMENTAL
EDCO Environmental sales were $918,000 compared to $1,878,000 in 1996. Gross
profit for the nine months was $657,000 and $399,000 respectively. Gross
profit margins increased to 71.6 percent in 1997 compared to 21.3 percent in
1996. Management attributes the increase in margins mainly to a change in its
business plan. From August 1996 EDCO has concentrated solely on environmental
remediation which produces higher margins and discontinued equipment sales and
construction projects which were characterized by lower margins. Operating
expenses decreased $127,000 in 1997 compared to 1996. Decreases were mainly
in employment expenses $136,000; transportation $35,000; maintenance $17,000;
and increases in depreciation $21,000; and general and administrative
expenses of $40,000. Operating income/(loss) for the nine months ended June
30, 1997 and 1996 respectively was $51,000 compared to ($334,000).
CAPITAL RESOURCES AND LIQUIDITY
Cash, cash equivalents and marketable securities were $2,413,000 as of June 30,
1997 compared to $2,793,000 for September 30, 1996. Working capital was
$6,556,000 as of June 30, 1997, a decrease from $9,002,000 as of September 30,
1996. The decrease in working capital was largely attributable to a $2,939,000
increase in the trade payables.
Cash provided from operations was $2,154,000 as of June 30, 1997 compared to
$4,238,000 for the same period ending June 30, 1996. Net cash flow for the year
to date ending June 30, 1997 is $(396,000) compared to $682,000 for the year to
date ending June 30, 1996.
ESI's current ratio, the ratio of current assets to current liability, was 1.48
as of June 30, 1997 and 1.92 as of September 30, 1996.
ESI utilized proceeds from its $7,000,000 line of credit up to a maximum of
$5,344,000 in 1997 to fund operations. As of June 30, 1997, ESI had
$1,856,000 available in unused lines of credit. The Company's credit
facilities with one financial institution in the amount of $6,700,000 was
increased to $10,200,000 on August 4, 1997 and will expire on August 1999 and
a $300,000 line of credit with another financial institution expires in March
1998. The company's current total line of credit is $10,500,000.
The Company anticipates that existing sources of liquidity and cash flow from
operations will be sufficient to satisfy continued operations; however,
additional sources of capital may be required to finance acquisitions.
13
<PAGE>
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, 1997 By: Charles N. Way
Vice President and Chief Financial Officer
And authorized to sign on behalf of the
Registrant
By: Denis J. Waldron
Corporate Controller
And authorized to sign on behalf of the
Registrant
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY 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> 9-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> JUN-30-1997
<CASH> 2,397
<SECURITIES> 16
<RECEIVABLES> 5,924
<ALLOWANCES> 50
<INVENTORY> 9,804
<CURRENT-ASSETS> 20,296
<PP&E> 34,372
<DEPRECIATION> 13,111
<TOTAL-ASSETS> 42,719
<CURRENT-LIABILITIES> 13,740
<BONDS> 0
0
0
<COMMON> 32
<OTHER-SE> 18,513
<TOTAL-LIABILITY-AND-EQUITY> 42,719
<SALES> 110,512
<TOTAL-REVENUES> 110,512
<CGS> 96,823
<TOTAL-COSTS> 111,988
<OTHER-EXPENSES> 372
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 822
<INCOME-PRETAX> (2,670)
<INCOME-TAX> (929)
<INCOME-CONTINUING> (1,741)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,741)
<EPS-PRIMARY> (0.56)
<EPS-DILUTED> 0
</TABLE>
