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Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1998
Commission File Number 1-6537-3
ALL STAR GAS CORPORATION
(Exact Name of Registrant as Specified in its Charter)
MISSOURI 43-1494323
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
P.O. Box 303, 119 West Commercial Street, Lebanon, Missouri 65536
(Address of Principal Executive Offices and Zip Code)
(417) 532-3103
(Registrant's Telephone Number, Including Area Code)
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 outstanding common stock (one class only) as of January
31, 1999 was 1,564,050.
=============================================================================
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements
ALL STAR GAS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands, Except Per Share Amounts)
December 31, 1998
(Unaudited) June 30, 1998
------------------ -------------
Assets
Current Assets
Cash $ 1,825 $ 897
Trade receivables - Net 8,396 4,526
Inventories 6,222 6,985
Prepaid Expense 677 615
Refundable Income Taxes 1,450 1,135
Deferred Income Taxes 200 312
--------------- -------------
Total Current Assets 18,770 14,470
--------------- -------------
Property and Equipment 118,604 118,313
Less Accumulated Depreciation 39,759 37,323
--------------- -------------
Total Property and Equipment 78,845 80,990
--------------- -------------
Other Assets
Debt Acquisition Costs - Net 2,828 3,086
Excess of Cost Over Fair Value of Net
Assets Acquired - Net 12,259 13,202
Other 2,126 2,040
--------------- -------------
Total Other Assets 17,213 18,328
--------------- -------------
Total Assets $114,828 $113,788
=============== =============
ALL STAR GAS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands, Except Per Share Amounts)
December 31, 1998
(Unaudited) June 30, 1998
------------------ --------------
Liabilities and Stockholders' Equity
(Deficit)
Current Liabilities
Current Maturities of Long-Term Debt $ 9,087 $ 7,824
Accounts Payable and Accrued Expenses 21,438 18,877
------------- -------------
Total Current Liabilities 30,525 26,701
Long-Term Debt
139,011 134,526
Deferred Income Taxes
2,977 4,905
Accrued Self-Insurance Liability
363 330
------------- -------------
Total Liabilities 172,876 166,462
------------- -------------
Stockholders' Equity (Deficit)
Common; $.001 Par Value; Authorized
20,000,000 Shares, Issued Dec. 31,
1998 and June 30, 1998 - 14,291,020
Shares 14 14
Common Stock Purchase Warrants 1,227 1,227
Additional Paid-In Capital 27,279 27,279
Retained Earnings 1,506 6,880
------------- -------------
30,026 35,400
Treasury Stock at Cost
December 31, 1998 and June 30, 1998 -
12,726,970 Shares (88,074) (88,074)
------------- -------------
Total Stockholders' Equity (Deficit) (58,048) (52,674)
------------- -------------
Total Liabilities and Stockholders'
Equity (Deficit) $114,828 $113,788
============= =============
See Notes to Condensed Consolidated Financial Statements
ALL STAR GAS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS AND SIX MONTHS ENDED DECEMBER 31, 1998 AND 1997
(Unaudited)
(Dollars in Thousands, Except Per Share Amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31 December 31
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Operating Revenue $ 26,366 $ 29,836 $38,290 $ 42,914
Cost of Product Sold 12,965 14,903 18,436 21,554
------------- ------------- ------------- ------------
Gross Profit 13,401 14,933 19,854 21,360
------------- ------------- ------------- ------------
Operating Costs and Expenses
General and Administrative 7,721 7,744 14,719 14,510
Depreciation and 2,319 2,092 4,673 4,384
Amortization
(Gain) Loss on Sale of (3) 214 (351) 126
Assets
------------- ------------- ------------- ------------
10,037 10,050 19,041 19,020
------------- ------------- ------------- ------------
Operating Income 3,364 4,883 813 2,340
------------- ------------- ------------- ------------
Other Income (Expense)
Interest Expense, Net (2,976) (2,919) (5,774) (5,570)
Amortization of Debt
Discount and Expense (1,853) (1,625) (3,698) (3,298)
Restructuring Proposal Costs -- (291) -- (659)
------------- ------------- ------------- ------------
(4,829) (4,835) (9,472) (9,527)
------------- ------------- ------------- ------------
Income (Loss) Before Income
Taxes (1,465) 48 (8,659) (7,187)
Provision (Credit) for Income
Taxes (530) -- (3,285) (2,100)
------------- ------------- ------------- ------------
Net Income (Loss) $(935) $ 48 $ (5,374) $ (5,087)
============= ============= ============= ============
Basic and Diluted Loss Per
Common Share $(.60) $.03 $(3.44) $ (3.25)
============= ============= ============= ============
See Notes to Condensed Consolidated Financial Statements.
</TABLE>
ALL STAR GAS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED DECEMBER 31, 1998 AND 1997
(Unaudited)
(Dollars in Thousands)
<TABLE>
<CAPTION>
1998 1997
---- ----
Cash Flows From Operating Activities
<S> <C> <C>
Net Loss $(5,374) $ (5,087)
Items not requiring (providing) cash
Depreciation 3,619 3,552
Amortization 4,755 4,130
Loss (Gain) on sale of assets (351) 126
Deferred income taxes (1,816) (2,100)
Changes In:
Trade receivables (3,576) (3,980)
Inventories 722 (240)
Prepaid expense and other (187) (343)
Accounts payable and accrued expenses 1410 4,374
------------------- -------------------
Net cash provided by (used in) operating
activities (798) 432
------------------- -------------------
Cash Flows From Investing Activities
Purchase of property and equipment (1,641) (4,365)
Acquisition of retail service centers (601) (4,562)
Proceeds from sales of property and
equipment 286 189
Disposal of retail service centers 803 550
Advances from related parties 270 --
------------------- -------------------
Net cash used in investing activities (883) (8,188)
------------------- -------------------
Cash Flows From Financing Activities
Checks in process of collection 595 822
Increase in working capital financing 2,956 9,110
Proceeds on long-term debt obligations 1,684 --
Principal payments on other long-term debt (2,626) (1,067)
------------------- -------------------
Net cash provided by financing activities 2,609 8,865
------------------- -------------------
INCREASE IN CASH 928 1,109
CASH, BEGINNING OF PERIOD 897 965
------------------- -------------------
CASH, END OF PERIOD $1,825 $ 2,074
=================== ===================
See Notes to Condensed Consolidated Financial Statements
</TABLE>
ALL STAR GAS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED DECEMBER 31, 1998 AND 1997
(Unaudited)
(1) BASIS OF PRESENTATION
All Star Gas Corporation (the Company) was founded in 1963 and
through its subsidiaries has been in operation for over 35 years.
The Company is engaged primarily in the retail marketing of propane
and propane related appliances, supplies and equipment to
residential, agricultural and commercial customers. As of the last
fiscal year, the Company provided service to approximately 115,000
customers in 21 states through 130 retail service centers.
The accompanying unaudited condensed consolidated financial
statements contain, in the opinion of Management, all adjustments
necessary to present fairly the Company's condensed consolidated
financial position as of December 31, 1998, and the condensed
consolidated results of its operations and cash flows for the
periods ended December 31, 1998 and 1997. All such adjustments are
of a normal recurring nature.
These financial statements should be read in conjunction with the
Company's audited consolidated financial statements as of June 30,
1998, and the notes thereto included in the Form 10-K as filed with
the United States Securities and Exchange Commission as disclosure
which would substantially duplicate the disclosure contained in that
registration has been omitted.
Due to the seasonal nature of the Company's business, the results of
operations for the six and three months ended December 31, 1998 are
not necessarily indicative of the results to be expected for the
full year.
(2) MANAGEMENT'S CONSIDERATION OF GOING CONCERN MATTERS
The Company has net working capital and stockholders' equity
deficiencies and its working capital borrowing facility is due in
full in March 1999. The financial statements have been prepared
assuming the Company will continue as a going concern, realizing
assets and liquidating liabilities in the ordinary course of
business. Management is considering several alternatives for
mitigating these conditions during the next year. These include
obtaining a new credit facility and exploring other financing and
recapitalization alternatives. Management is also seeking
operational improvements and economies, such as those the Company
expects to realize from reductions in general and administrative
expenses undertaken in the latter part of fiscal 1998. Management
believes the Company will be able to obtain the necessary financing
and/or capital however, no agreements have been completed. Although
not currently planned, realization of assets in other than the
ordinary course of business to meet liquidity needs could incur
losses not reflected in these financial statements.
(3) SELF-INSURANCE AND CONTINGENCIES
Under the Company's current insurance program, coverage for
comprehensive general liability, workers' compensation and vehicle
liability is obtained for catastrophic exposures as well as those
risks required to be insured by law or contract. The Company
self-insures the first $200,000 for each and every general liability
incident. For the vehicle and workers' compensation programs, the
Company has a $250,000 deductible per occurrence. The Company
obtains excess coverage on occurrence basis policies. Provisions for
self-insured losses are recorded based upon the Company's estimates
of the aggregate self-insured liability for claims incurred,
resulting in a retention for a portion of these expected losses.
The Company and its subsidiaries are defendants in various lawsuits
related to the self-insurance program, which are not expected to
have a material adverse effect on the Company's financial position
or results of operations.
The Company currently self-insures health benefits provided to the
employees of the Company and its subsidiaries, subject to a $75,000
maximum per claim. Provisions for losses expected under this program
are recorded based upon the Company's estimate of the aggregate
liability for claims incurred.
As previously reported, the State of Missouri has made an assessment
of state income tax for the years ended June 30, 1992 and 1993, the
nature and magnitude of which has not changed. The Company continues
to believe that it has a strong position on this matter and intends
to vigorously contest the assessment. It is likely that this matter
will have to be settled in litigation.
The Company and its subsidiaries are presently involved in other
various state tax audits, which are not expected to have a material
adverse effect on the Company's financial position or results of
operations.
(4) ACCOUNTING FOR DERIVATIVES
There has been no change since June 30, 1998 in the Company's
treatment of commodity futures contracts. As of December 31, 1998,
the Company's open positions on futures contracts are immaterial.
(5) RELATED PARTY TRANSACTIONS
During the three months ending December 31, 1998, the Company
received advances bearing interest at a rate 12% from its Principal
Shareholder totaling $70,000.
(6) LOSS PER COMMON SHARE
Loss per common share is computed by dividing the net loss for the
three month periods by the average number of common shares and,
except where anti-dilutive, common share equivalents outstanding, if
any. The weighted average number of common shares outstanding used
in the computation of loss per common share was 1,564,050 as of
December 31, 1998 and 1997, respectively.
(7) ACQUISITIONS OF RETAIL SERVICE CENTERS
The Company continues to pursue growth and improved results through
the acquisition of retail service centers in its market area and the
disposition of service centers in accordance with its overall
marketing plan. During the three months ended December 31, 1998, the
Company disposed of one retail service center. The Company received
$120,000 in cash for the disposition. Pro forma results of these
operations as if the transactions had been completed at the
beginning of the period would not be materially different from
actual results due to the timing of the transaction and the seasonal
nature of the business.
(8) ADDITIONAL CASH FLOW INFORMATION (In Thousands)
<TABLE>
<CAPTION>
Additional Cash Payment Information 1998 1997
----------------------------------- ---- ----
<S> <C> <C>
Interest Paid $5,777 $5,467
Income Taxes Paid (net of refunds) $(1,156) $ (520)
Noncash Investing and Financing
Activities
---------------------------------
Mortgage obligations incurred on the
acquisition of a service center $75 $6,719
Note receivable from sale of a service
center $207 ---
</TABLE>
(9) FUTURE LIQUIDITY NEEDS
The Company's $15 million revolving credit facility expires March
29, 1999. The Company has executed a commitment letter and paid a
lender a $150,000 commitment fee and advanced non-refundable
expenses of $125,000 to replace this facility, but no new agreement
has yet been reached. Should the Company be unable to obtain such
financing, it may not be able to meet its working capital needs.
Under the terms of the Company's 12 7/8% Senior Secured Notes, due
2004, the cash interest rate increases from 7% to 12 7/8% effective
July 16, 1999 resulting in a significantly higher semiannual
interest payment to be paid January 15, 2000 and subsequently.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Financial Condition and Liquidity
The following table is presented as a measure of the Company's liquidity
and financial condition (in thousands).
<TABLE>
<CAPTION>
December 31 June 30
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Total long-term debt (including
current maturities) $148,098 $144,427 $142,350 $126,632
Working Capital (deficit) $(11,755) $(14,916) $(12,231) $ (4,598)
Current Ratio .61 .57 .54 .75
</TABLE>
During the six months ended December 31, 1998, the Company incurred $75,000
of additional debt related to the acquisition of a retail service center.
The remainder of the increase in long-term debt is related to the $3.7
million of amortization of original issue discount on the Company's 12 7/8%
Senior Secured Notes, due 2004 and the increase in the revolving credit
facility of $3.0 million offset by mortgage obligation principal payments.
The significant change in working capital and the resulting effect on the
current ratio is due to several factors, including:
o the balance of the revolving credit facility and its classification as
current;
o the use of funds generated from the Company's prepaid product program;
and
o the tax related impact of operations affecting deferred tax assets and
liabilities.
Customer prepayments primarily related to the Company's prepaid product
program, increased to $8.7 million as of December 31, 1998 compared to $8.3
million as of December 31, 1997. The program allows customers to prebuy
product at an established price, reducing their risk of winter price
fluctuations brought about by changes in demand and allowing the Company to
improve its seasonal cash flow and further enhance its product purchases
and customer marketing programs.
The Company decided to utilize its 30 day grace period for the payment of
the $4.5 million interest payment due on January 15, 1999 on its $127.2
million 12 7/8% Senior Secured Notes, due 2004. The Company continues to
experience cash shortages due to the unusually warm weather and lower
petroleum prices, which cause a decrease in customer demand for propane.
The Company has made the interest payment as of the date of this filing.
The Company has net working capital and stockholders' equity deficiencies
and its working capital borrowing facility is due in full in March 1999.
The Company is considering several alternatives for mitigating these
conditions during the year, which include obtaining a new credit facility
and exploring other financing and recapitalization alternatives. In
addition, management has undertaken significant reductions in general and
administrative expenses during the latter portion of fiscal 1998 which are
expected to positively impact fiscal 1999 results. Capital expenditures
have been high over the past three fiscal years as the Company has upgraded
and improved its trucks and equipment. During the past fiscal year, the
Company has also incurred costs related to the change of the Company name
on its retail facilities and the renovation of an existing building which
was converted into the corporate facilities for the Company allowing the
Company to exit an expensive lease agreement.
While the Company believes that it will be able to obtain the necessary
financing and/or capital to mitigate these conditions, no agreements have
been obtained and no assurances can be made that such financing and/or
capital will be available to the Company. An inability to obtain financing
and/or capital could have a material adverse effect on the Company and its
ability to conduct business.
The Year 2000 issue
The Year 2000 problem concerns the inability of information systems to
recognize and process date- sensitive information properly from and after
January 1, 2000.
To minimize or eliminate the effect of the year 2000 problem on the
Company's information systems and applications, the Company is continually
identifying, evaluating, implementing and testing changes to its computer
systems, applications and software necessary to achieve Year 2000
compliance. The Company has given an Executive Officer of the Company
responsibility to identify, evaluate and implement a plan to bring all of
the Company's critical business systems and applications into Year 2000
compliance prior to December 31, 1999.
The year 2000 initiative consists of four phases: (i) identification of all
critical business systems subject to Year 2000 risk (the "Identification
Phase"), (ii) assessment of such business systems and applications to
determine the method of correcting any Year 2000 problems (the "Assessment
Phase"); (iii) implementing the corrective measures (the "Implementation
Phase"); and (iv) testing and maintaining system compliance (the "Testing
Phase"). The Company has substantially completed the Identification,
Assessment and Implementation Phases and has identified and assessed four
areas of risk; (i) third party vendor software, such as business
applications and operating systems; (ii) computer hardware components;
(iii) electronic data transfer systems between the Company and its
suppliers and customers; and (iv) embedded systems, such as phone switches.
Although no assurances can be made, the Company believes that it has
identified substantially all of its systems, application and related
software that are subject to Year 2000 compliance risk and has either
implemented or initiated the implementation of a plan to correct such
systems that are not Year 2000 compliant. The Company does not anticipate
completion of the Testing Phase until sometime prior to December 1999.
The Company relies on third party service providers for services such as
telecommunications, internet service, utilities and other key services as
well as on other third parties such as customers and suppliers.
Interruption of those services and business due to Year 2000 issues could
affect the Company's operations. The Company has developed a course of
action to determine the status of such third party service providers,
customers and suppliers to determine alternative and contingency
requirements. While approaches to reducing risks of interruption of
business operations vary, options include identification of alternative
service providers, customers and suppliers available to provide such
service and business if such third party failures to become Year 2000
compliant within an acceptable time frame prior to December 31, 1999.
Since the Company has recently updated its information systems (which have
been certified to be Year 2000 compliant) in the ordinary course of
business, there has not been any additional cost incurred by the Company in
connection with its Year 2000 compliance plan other than as would have been
incurred in the ordinary course. The Company has been expensing and
capitalizing the costs of updating its information systems in connection
with its Year 2000 compliance plan in accordance with generally accepted
accounting policies. The Company does not believe that it will incur
significant future costs for remediation in connection with Year 2000
compliance. In the event the Year 2000 modifications and conversions are
not adequate, the Year 2000 problem could have a material impact on the
operations and financial condition of the Company.
THE ESTIMATES AND CONCLUSIONS HEREIN ARE FORWARD-LOOKING STATEMENTS AND ARE
BASED ON MANAGEMENT'S BEST ESTIMATES OF FUTURE EVENTS. RISKS OF COMPLETING
THE PLAN INCLUDE THE AVAILABILITY OF RESOURCES, THE ABILITY TO DISCOVER AND
CORRECT THE POTENTIAL YEAR 2000 SENSITIVE PROBLEMS WHICH COULD HAVE A
SERIOUS IMPACT ON CERTAIN OPERATIONS AND THE ABILITY OF THE COMPANY'S
SERVICE PROVIDERS, CUSTOMERS AND SUPPLIERS TO BRING THEIR SYSTEMS INTO YEAR
2000 COMPLIANCE.
Results of Operations
Due to the seasonal nature of its business, the Company usually realizes an
operating loss the first quarter and operating income for the second
quarter. Operating revenues for a particular quarter are not necessarily
indicative of a full fiscal year's operations because of the seasonal
element. Other expense items such as depreciation and general and
administrative expenses, however, generally continue on a more annualized
basis. Interest expense also continues on a more level basis although
interest expense is generally higher during the summer and fall months due
to increased working capital borrowings used to finance inventory purchases
in preparation for the Company's principal sales months.
The following table presents additional operating data for the periods
ended December 31, 1998 and 1997 and the year ended June 30, 1998 (in
thousands).
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended Year Ended
12/31/98 12/31/97 12/31/98 12/31/97 6/30/98
-------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C>
Propane Gallons Sold 27,538 32,047 41,382 46,527 93,908
(Bulk and Bottle)
Revenues:
Propane $23,357 $ 26,595 $ 33,699 $ 38,124 $ 78,583
Gas systems, appliances
and other fuels 1,370 1,431 2,169 2,231 3,694
Other 1,639 1,810 2,422 2,559 4,233
Gross Profit:
Propane 11,297 12,640 16,712 18,054 38,848
Gas systems, appliances
and other fuels 465 483 720 747 1,013
Other 1,639 1,810 2,422 2,559 4,233
</TABLE>
Volumes. Retail volumes of propane sold decreased in the three and six
months ended December 31, 1998 compared to the same periods ended December
31, 1997. Heating degree-days experienced by the Company during the six
months ended December 31, 1998 were only 89% of those experienced in a
normal winter. Comparing stores that were operated by the Company during
both 1998 and 1997, volumes decreased approximately 11%.
Revenues. Operating revenues decreased 11% in both the three and six months
ended December 31, 1998 compared to the same periods in 1997. During the
six months ended December 31, 1998 the impact on the continuing
industry-wide decline in product costs compared to the same period in 1997
resulted in a similar decline in revenues as sales prices tend to move with
product costs in the margin driven propane market. Sales prices per gallon
fell 8% in the six months ended December 31, 1998 compared to 1997. Other
sales, including gas systems, appliances and other fuels, had no
significant impact on the change in revenues as indicated in the table
above.
Cost of product and gross profit. As indicated in the discussion of
revenues, product costs were dramatically lower in 1998 than 1997. Through
December 31, 1998, the propane industry has experienced higher than
historical supply levels. Combined with warmer winter weather, which has
depressed demand, these large supplies have resulted in significantly lower
product costs. Although sales volume decreased as discussed above, gross
profit margins increased 1.6(cent) per gallon. There were no significant
changes in the cost or related profit on other sales as indicated in the
table above.
General and administrative expense. General and administrative expense was
relatively comparable in total between the three months ended December 31,
1998 and 1997. These expenses for the six months ended December 31, 1998
increased $209,000 over the same period in 1997. Salaries and employee
benefits increased $318,000 due to the increased number of personnel
associated with the acquisition of retail service centers as well as
increased health insurance claims and premium costs. Insurance and
liability claims increased $353,000 due to increased provisions to the
Company's self-insurance liabilities related to those claims. The Company
has, however, been able to recognize cost savings in transportation,
rental, and office expenses.
Depreciation and amortization. Depreciation and amortization expense
increased for both the three and six month periods ended December 31, 1998
compared to the same periods in 1997. This increase is due primarily to the
increased amortization on purchased goodwill and noncompete agreements
incurred through retail service center acquisitions.
Interest expense. Interest expense increased for the three and six month
periods ending December 31, 1998 compared to the same periods in 1997
primarily due to the increased mortgage obligation debt service resulting
from recent acquisitions and increased balances on the Company's revolving
credit facility.
Restructuring proposal costs. As discussed in Note 12 of the June 30, 1998
financial statements referred to above, the Company abandoned a proposal to
restructure its debt and equity as of June 30, 1997. These expenses for the
three and six month periods ended December 31, 1997 consist of residual
expenses and forfeited deposits related to the abandonment of this
proposal.
Potential Impact of Future Accounting Pronouncements
The Financial Accounting Standards Board (FASB) recently adopted Statement
of Financial Accounting Standards (SFAS 133), Accounting for Derivative
Financial Instruments and Hedging Activities. This Statement establishes
accounting and reporting standards for derivative instruments, including
certain derivative instruments embedded in other contracts, and for hedging
activities. SFAS 133 is effective for all fiscal quarters of fiscal years
beginning after June 15, 1999, may be adopted early for periods beginning
after issuance of the Statement and may not be applied retroactively. The
effects of adoption of SFAS 133 on the Company's financial statements are
not determinable currently. The Company expects to initially adopt SFAS 133
for the quarter ending September 30, 1999.
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings
Reference is made to Note 3 of the Condensed Consolidated Financial
Statements.
Items 2, 3, 4 and 5
No information is reportable under these sections
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit No. Description
(27) Financial Data Schedule
(b) Reports on Form 8-K
January 15, 1999
Reviewed by Independent Certified Public Accountants
The December 31, 1998 financial statements included in this filing on Form
10-Q have been reviewed by Baird, Kurtz & Dobson, Independent Certified
Public Accountants, in accordance with established professional standards
and procedures for such a review. The report of Baird, Kurtz & Dobson
commenting upon their review is appended hereto.
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.
ALL STAR GAS CORPORATION
Registrant
Date: February 16, 1999 /s/ Paul S. Lindsey
----------------------------
Paul S. Lindsey
President
Independent Accountants' Report
Board of Directors and Stockholders
All Star Gas Corporation
Lebanon, Missouri
We have reviewed the accompanying condensed consolidated balance sheet
of ALL STAR GAS CORPORATION as of December 31, 1998, and the related
condensed consolidated statements of operations and cash flows for the
three-month and six-month periods ended December 31, 1998 and 1997. These
condensed consolidated financial statements are the responsibility of the
Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical
procedures to financial data and making inquiries of persons responsible
for financial and accounting matters. It is substantially less in scope
than an audit conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion regarding
the financial statements taken as a whole. Accordingly, we do not express
such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying condensed consolidated financial
statements referred to above for them to be in conformity with generally
accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet of ALL STAR GAS
CORPORATION as of June 30, 1998, and the related consolidated statements of
operations, stockholders' equity (deficit) and cash flows for the year then
ended (not presented herein); and in our report dated August 28, 1998, we
expressed an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet as of June 30, 1998, is fairly stated,
in all material respects, in related to the consolidated balance sheet from
which it has been derived.
/s/ Baird, Kurtz & Dobson
Springfield, Missouri
January 26, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-END> DEC-31-1998
<CASH> 1,825,000
<SECURITIES> 0
<RECEIVABLES> 9,419,000
<ALLOWANCES> 1,023,000
<INVENTORY> 6,222,000
<CURRENT-ASSETS> 18,770,000
<PP&E> 118,604,000
<DEPRECIATION> 39,759,000
<TOTAL-ASSETS> 114,828,000
<CURRENT-LIABILITIES> 30,525,000
<BONDS> 139,011,000
<COMMON> 14,000
0
0
<OTHER-SE> (58,062,000)
<TOTAL-LIABILITY-AND-EQUITY> 114,828,000
<SALES> 35,869,000
<TOTAL-REVENUES> 38,290,000
<CGS> 18,436,000
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<INCOME-TAX> (3,285,000)
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<NET-INCOME> (5,374,000)
<EPS-PRIMARY> (3.50)
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</TABLE>
