U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly period ended September 30, 2001
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from to
Commission File No. 0-3802
WESTERN STANDARD CORPORATION
----------------------------
(Exact Name of Registrant as Specified in its Charter)
WYOMING 83-0184378
- ------- ----------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
205 SOUTH BROADWAY, RIVERTON, WY 82501
- -------------------------------- -----
(address of principal executive offices)
307-856-9288
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(Issuer's telephone number)
UNCHANGED
---------
(Former name, former address and former fiscal year, if changed
since last report)
Check whether the issuer (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the
past 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
_____.
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the
issuer's classes of common equity, as of the latest practicable
date: 9,965,015 common $.05 par at September 30, 2001.
PART 1, ITEM 1, 2 (1)(i)
CLIFFORD H. MOORE AND COMPANY, CPAs
205 South Broadway
Riverton, Wyoming 82501
INDEPENDENT ACCOUNTANT'S REPORT
We have reviewed the accompanying interim financial
statements required by the Securities and Exchange Commission
(SEC) form 10QSB of Western Standard Corporation and consolidated
subsidiaries as of September 30, 2001, and for the nine month
period then ended. These 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 financial
statements for them to be in conformity with generally accepted
accounting principles.
/s/ Clifford H. Moore and
Company, CPAs
Riverton, Wyoming
November 9, 2001
FORM 10QSB
WESTERN STANDARD CORPORATION
Consolidated Balance Sheet
Unaudited
September 30, 2001
Current Assets:
Cash $ 375,658.19
Accounts Receivable 486,298.01
Allowance for Doubtful Accounts ( 15,361.89)
Notes receivable - officer 10,000.00
Inventory - at cost 52,302.14
---------------
Total Current Assets $ 908,896.45
---------------
Property & Equipment, Net of
Accumulated Depreciation,
Amortization and Depletion $ 9,366,596.04
---------------
Other Assets:
* Accounts Receivable - Snow King Resort
Center, Inc. and JH Spring Water $ 1,495,702.42
Allowance for collectibility ( 1,330,000.00)
Pre-opening costs-Loveridge 4,792.71
Prepaid expenses 19,285.71
Prepaid loan fees and leases 64,495.00
Investment in SKRCI 6,720.00
Leasehold Interest 30,730.84
Patronage capital 234,492.21
Other 1,164.86
---------------
Total Other Assets $ 527,383.75
---------------
TOTAL ASSETS $10,802,876.24
===============
The Registrant also owns 12,000 shares of Class B Common stock in
Snow King Resort, Inc. at Zero Basis.
* This account receivable is from two new businesses; one is
approximately 49% owned by Western Standard Corporation and
operated by its subsidiary Snow King Resort, Inc. The other is
totally owned by Snow King Resort, Inc. This is not a short term
receivable.
PART 1, ITEM 1, 2 (1)(i)
FORM 10QSB
WESTERN STANDARD CORPORATION
Consolidated Balance Sheet
Unaudited
September 30, 2001
Liabilities:
Accounts Payable $ 434,090.70
Accounts Payable - Other
Portion of Long Term Debt
payable within one year 249,806.56
Advance Deposit 189,070.17
Accrued Expenses 610,936.83
First Interstate Bank line of credit -0-
Xerox notes 3,132.16
SL Land LLC payable 3,447.00
---------------
Subtotal $1,490,483.42
Long Term Debt 8,705,029.21
Fee Payable - Officer 90,000.00
---------------
TOTAL LIABILITIES $10,285,512.63
---------------
Minority Interest in Subsidiary
2,150 shares of Class A stock
in SKRI $ 2,096,559.96
---------------
STOCKHOLDERS INVESTMENT:
Common Stock, $0.05 par
value, 10,000,000 shares
authorized, 9,965,015
issued and outstanding
at September 30, 2001 $ 401,201.02
Capital in Excess of Par
Value 3,334,801.45
Accumulated Deficit ( 5,315,198.82)
---------------
Net Stockholders
Investment ($ 1,579,196.35)
---------------
TOTAL LIABILITIES AND CAPITAL $10,802,876.24
===============
PART 1, ITEM 1, 2 (1)(ii)
FORM 10QSB
WESTERN STANDARD CORPORATION
Consolidated Statement of Operations
Unaudited
Profit and Loss Information
For the Nine (9) Months Ended
Sep. 30, 2001 Sep. 30, 2000
1. Gross sales less discounts,
returns and allowances $ 8,356,329.78 $ 8,540,073.61
2. Operating Revenues -0- -0-
3. Total of Captions 1 and 2 8,356,329.78 8,540,073.61
4. Costs and Expenses
(a) Operating Expenses 6,989,243.03 6,897,448.70
(b) Interest Expense 623,885.08 587,366.40
(c) Depreciation 428,600.00 627,546.21
Total Costs and Expenses 8,041,728.11 8,112,361.31
5. Income (Loss) before taxes
on income & extraordinary
items 314,601.67 427,712.30
6. Discontinued Operations -0- -0-
7. Provisions for taxes on
income 105,944.78 145,422.18
8. Income or (Loss) 208,656.89 282,290.12
9. Minority interest in
profit (loss) of
subsidiary 77,633.36 103,810.42
10. Income (Loss) 131,023.53 178,479.70
11. Income tax, benefit of
net operating loss
carryover 105,944.78 145,422.18
12. Net Income (Loss) 236,968.31 323,901.88
13. Earnings (Loss) per share:
$236,968.31: 9,965,015
issued and outstanding
$323,901.88 : 9,965,015
issued and outstanding .024 .03
14. Dividends per share -0- -0-
The results for interim periods are not necessarily indicative of
results to be expected for the year.
The information furnished for Western Standard Corporation
reflects adjustments which are, in the opinion of management,
necessary to a fair statement of the results for this interim
period.
PART 1, ITEM 1, 2 (1)(iii)
FORM 10QSB
WESTERN STANDARD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
For the Nine (9) Months Ended
Sep. 30, 2001 Sep. 30, 2000
INCREASE (DECREASE) IN CASH:
Cash flows from operating
activities:
Cash received from
customers $8,130,252.01 $ 7,760,957.82
Cash paid to suppliers
and employees ( 6,970,695.48) ( 6,647,671.21)
Interest paid ( 623,885.08) ( 587,366.40)
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Net cash provided
by operations $ 535,671.45 $ 525,920.21
-------------- --------------
Cash flows from investing
activities:
Condominium preopening costs($ 4,792.71) $ -0-
Reduction in loans to
officer -0- 800.00
Capital expenditures ( 307,393.48) ( 561,742.94)
(Increase) decrease in
restricted cash 5,803.26 17,548.15
(Increase) reduction in
Snow King Center loan 22,368.91 12,411.00
SK Land LLC Payable 3,447.00 -0-
Repayment Loveridge
Receivable 49,516.86 33,360.95
-------------- --------------
Net cash provided
(used) by investing
activities ($ 231,050.16) ($ 497,622.84)
-------------- --------------
Cash flows from financing
activities:
New loans $ -0- $ 776,533.67
Principal payments to
banks ( 309,019.46) ( 410,216.17)
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Net cash provided
(used) by financing
activities ($ 309,019.46) $ 366,317.50
-------------- --------------
Net increase (decrease) in
cash ($ 4,398.17) $ 394,614.87
Cash at beginning of year 380,056.36 276,312.60
-------------- --------------
Cash at end of quarter $ 375,658.19 $ 670,927.47
============== ==============
RECONCILIATION OF NET INCOME
TO NET CASH USED BY OPERATING
ACTIVITIES:
Net income $ 236,968.31 $ 323,901.88
Adjustments:
Depreciation and
amortization 449,849.00 627,546.21
Decrease (increase) in
advance deposits 163,711.65 ( 270,914.74)
Increase (decrease) in
accrued expenses ( 301,204.84) 156,503.05
Decrease (increase) in
accounts receivable ( 223,327.77) ( 508,201.05)
Decrease in prepaid
expenses 183,912.44 195,493.33
Decrease (increase)in
inventories 69.93 21,053.44
(Decrease) increase in
accounts payable ( 51,940.63) ( 123,272.33)
Allocation of minority
interest in profit
(loss) of subsidiary 77,633.36 103,810.42
-------------- --------------
Net cash provided (used)
by operations $ 535,671.45 $ 525,920.21
============== ==============
PART I, ITEM 1, 2 (2)
FORM 10QSB
WESTERN STANDARD CORPORATION
(ii) Material Subsequent Events and Contingencies
None
(iii) Significant Equity Investors
Six investors own approximately 23.57% of Snow King
Resort, Inc., a Western Standard Corporation sub-
sidiary.
(iv) Significant Disposition and Purchase Business
Combinations.
Form 8-K dated June 12, 2001 - Western Standard
Corporation today announced that its Board of
Directors has undertaken to explore ways to realize
value for its shareholders, and endorsed the actions
of the directors of Snow King Resort, Inc. (SKRI).
As an initial step, SKRI has engaged Sonnenblick-
Goldman Company to advise its Board and help deter-
mine a specific strategy and the transactional value
of the Snow King Resort properties. No proposition
has been received at September 30, 2001.
Western Standard's largest asset is its equity
interest in SKRI. SKRI owns and operates the Snow
King ski resort and hotel in Jackson, Wyoming and
engages in real estate activities in the immediate
area.
(v) Material accounting changes
None
PART I, Item 1, 2 (2)(iii)
Significant Equity Investors
Unaudited
January 1 to
Sep. 30, 2001
Sales $8,319,082.64
Gross Income $8,319,082.64
Net Income (Loss) from continuing operations $ 329,373.63
Less Minority Interest in profit or (loss) -
23.57% $ 77,633.36
Net Income (Loss) $ 251,740.27
The above figures are for Snow King Resort, Inc., a Western
Standard Corporation subsidiary. The Registrant owns
approximately 76.43 percent of the outstanding Snow King Resort,
Inc. voting stock.
PART II
FORM 10QSB
WESTERN STANDARD CORPORATION
Other Information
1. Legal Proceedings.
At September 30,2001, there is one lawsuit filed against
Snow King Resort, Inc. Our insurance company is handling
it and we don't expect any corporate liability.
2. Change in Securities
None
3. Defaults upon senior securities.
None
4. Submission of matters to a vote of security holders.
None
5. Other information.
None
6. Exhibits and reports on Form 8-K.
(a) Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
Form 8-K dated 6/12/01 is the last Form 8-K filed.
303(b) 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations.
(a) ANALYSIS OF FINANCIAL CONDITION:
Heavy startup and operating costs at the Snow King Resort
Center have created a heavy drain on Snow King Resort's
cash flow. Snow King Resort, at times, has not had
sufficient cash flow to pay its creditors in a timely
manner. Snow conditions in Jackson were fair for skiing
during the winter of 2000-01. However, more rooms
available in Jackson and fewer people vacationing,
had an adverse effect on winter revenues. Summer
bookings were impressive. Fewer airline arrivals brought
fewer people to the Jackson area, thus fewer customers.
The September 11, 2001 attack on America took an
estimated 20% of our anticipated business for September.
Several groups cancelled their reservations and only two
groups have re-booked for a later date. Snow King Resort
is very dependent on the airlines to bring customers. It
is unknown how people will continue to react to flying.
On March 23, 1999, Snow King Resort, Inc. closed a
refinancing loan in the amount of $9,370,000 with an
additional line of credit in the amount of $640,000.
At September 30, 2001, $-0- had been drawn against
the $640,000. A fixed interest rate of 7.98% applies
to the $9,370,000 mortgage. Monthly payments have been
made since 6/10/00 in the amount of $107,847 per month
except for the months of April, May and November. The
borrowing was to pay off the previous mortgage, short
term debts and for refurbishing the Hotel. Principal and
interest payments on loans are current.
Western Standard Corporation, the parent company, will
have sufficient funds to cover its expenses during 2001
from cash reserves, oil and gas royalties, interest, and
accounts receivable.
(c) RESULTS OF OPERATIONS:
Net profit for the first nine months of 2001 amounted to
$314,602, compared to a net income for the first nine
months of 2000 in the amount of $427,712.
Profits and losses for the first nine months of 2001 and
2000 came from:
SOURCE 2001 2000
----------- -----------
Western Standard Corporation ($ 15,644) ($ 12,697)
Snow King Resort, Inc. 329,374 440,434
Western Recreation Corporation 872 ( 25)
----------- -----------
$ 314,602 $ 427,712
=========== ===========
Major increases and decreases in the first 9 months of 2001 from
the same period in 2000 are:
Total revenues decreased $ 183,744
Caused by:
Room rentals ( 135,669)
Food and beverage ( 89,534)
Mountain operations ( 58,743)
Condominium rentals 172,115
Other departments ( 71,913)
-----------
($ 183,744)
Total costs and expenses decreased $ 70,633
Rooms Dept:
Labor costs $ 43,678
Operating expenses 144,507
Commissions $121,919
Cleaning ( 4,715)
Supplies ( 620)
Linens 22,234
Telephone ( 2,363)
Cable TV 1,065
Uniforms ( 5,226)
Data Processing 2,300
Courtesy Car 5,050
Misc. 4,863
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$144,507
Food Dept ($ 17,165)
Beverage Dept ( 38,923)
Ski Area ( 99,740)
Slide Dept 1,746
Condominium Dept 32,387
Telephone Dept ( 10,062)
Jackson Village Room Rentals ( 20,447)
Administrative & General ( 18,647)
Marketing Dept: (Labor costs, 26,770
advertising, dues, subscriptions
increased while entertainment,
telephone, airline, postage, travel
decreased)
Maintenance Dept ( 775)
Energy Dept.-gas & electricity were higher 27,726
Property Taxes 3,260
Insurance ( 2,407)
Management Fees ( 3,749)
Interest 25,483
Depreciation ( 178,295)
Oil & Gas Expense 3,039
Shareholder Expenses 5,587
Stock Transfer Fees 844
Accounting & Auditing 1,208
Misc. 3,342
----------
($ 70,633)
S7AS 143 is not expected to have an impact on further financial
statements.
FORM 10QSB
WESTERN STANDARD CORPORATION
SIGNATURE
In accordance with the requirements of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WESTERN STANDARD CORPORATION
----------------------------
(Registrant)
Dated: _______________ /s/ Stanford E. Clark
----------------------------
Stanford E. Clark, President
Treasurer