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 June 30, 2002
[ ] 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
------------
(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:
9,963,015 common $.05 par at June 30, 2002.
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
June 30, 2002, and for the six 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.
Riverton, Wyoming
August 8, 2002
FORM 10QSB
WESTERN STANDARD CORPORATION
Consolidated Balance Sheet
Unaudited
June 30, 2002
Current Assets:
Cash $ 391,937.26
Accounts Receivable 565,120.06
Allowance for Doubtful Accounts ( 10,442.44)
Notes receivable - officer 10,000.00
Inventory - at cost 55,711.24
--------------
Total Current Assets $ 1,012,326.12
--------------
Property & Equipment, Net of
Accumulated Depreciation,
Amortization and Depletion $ 8,919,948.74
--------------
Other Assets:
* Accounts Receivable - Snow King Resort
Center, Inc. $ 1,518,430.07
Allowance for collectibility ( 1,425,000.00)
** Investment in JH Spring Water 5,409.72
Prepaid expenses 140,864.44
Prepaid loan fees and leases 44,308.00
Investment in SKRCI -0-
Leasehold Interest 29,668.84
Patronage capital 235,114.17
Other 1,164.86
Pre-opening costs 2,396.36
Note receivable-Loveridge 78,000.00
--------------
Total Other Assets $ 552,356.46
--------------
TOTAL ASSETS $10,562,631.32
==============
The Registrant also owns 12,000 shares of Class B Common stock in
Snow King Resort, Inc. at Zero Basis.
* This company is approximately 49% owned by Western Standard
Corporation. It is operated by Western Standard's subsidiary, Snow
King Resort, Inc. This is not a short term receivable.
** This company is owned totally 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
June 30, 2002
Liabilities:
Accounts Payable $ 465,667.92
Portion of Long Term Debt
payable within one year 275,496.75
Advance Deposit 666,740.29
Accrued Expenses 571,962.13
First Interstate Bank line of credit 480,000.00
A-1 Credit 18,766.80
Xerox notes 1,343.15
SK Land LLC payable 4,182.78
--------------
Subtotal $ 2,484,159.82
Long Term Debt 7,557,672.59
Fee Payable - Officer 90,000.00
--------------
TOTAL LIABILITIES $10,131,832.41
--------------
Minority Interest in Subsidiary
2,150 shares of Class A stock
in SKRI $ 2,084,236.40
--------------
STOCKHOLDERS INVESTMENT:
Common Stock, $0.05 par
value, 10,000,000 shares
authorized, 9,963,015
issued and outstanding
at June 30, 2002 $ 401,201.02
Capital in Excess of Par
Value 3,334,701.45
Accumulated Deficit ( 5,389,339.96)
---------------
Net Stockholders
Investment ($ 1,653,437.49)
---------------
TOTAL LIABILITIES AND CAPITAL $10,562,631.32
==============
PART 1, ITEM 1, 2 (1)(ii)
FORM 10QSB
WESTERN STANDARD CORPORATION
Consolidated Statement of Operations
Unaudited
Profit and Loss Information
For the Six (6) Months Ended
Jun. 30. 2002 Jun. 30, 2001
1. Gross sales less discounts,
returns and allowances $ 4,337,593.78 $ 4,201,951.30
2. Non-Operating Revenues-
Gain on sale 1,505,327.61 -0-
3. Total of Captions 1 and 2 5,842,921.39 4,201,951.30
4. Costs and Expenses
(a) Operating Expenses 4,494,929.10 4,383,408.84
(b) Interest Expense 298,169.48 342,536.08
(c) Depreciation 285,366.00 293,000.00
Total Costs and Expenses 5,078,464.58 5,018,944.92
5. Income (Loss) before taxes
on income & extraordinary
items 764,456.81 ( 816,993.62)
6. Discontinued Operations -0- -0-
7. Provisions for taxes on
income 259,915.32 -0-
8. Income or (Loss) 504,541.49 ( 816,993.62)
9. Minority interest in
profit (loss) of
subsidiary 184,804.78 ( 191,156.14)
10. Income (Loss) before
extraordinary items 319,736.71 ( 625,837.48)
11. Income tax benefit of
net operating loss
carryover and minority
share of tax 259,915.32 -0-
12. Net Income (Loss) 579,652.03 ( 625,837.48)
13. Earnings (Loss) per share:
($625,837.48) : 9,965,015
issued and outstanding (.06)
$579,652.03 : 9,963,015
issued and outstanding .058
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 Six (6) Months Ended
Jun. 30, 2002 Jun. 30, 2001
INCREASE (DECREASE) IN CASH:
Cash flows from operating
activities:
Cash received from
customers $ 6,010,250.24 $ 3,886,965.90
Cash paid to suppliers
and employees ( 4,426,414.22) ( 3,999,633.66)
Interest paid ( 298,169.48) ( 342,536.08)
Interest received 1,491.76 -0-
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Net cash provided
(used) by operations $ 1,287,158.30 ($ 455,203.84)
-------------- --------------
Cash flows from investing
activities:
Increase borrowing - SK
Land LLC $ -0- $ 163,447.00
Reduction in loans to
officer 3,000.00 -0-
Capital expenditures ( 82,298.45) ( 171,844.24)
(Increase) decrease in
restricted cash 20,446.27 5,803.26
(Increase) reduction in
Snow King Center loan 47,802.23 5,063.98
Repayment (loan) Loveridge
receivable ( 78,000.00) 49,516.86
-------------- --------------
Net cash provided
(used) by investing
activities ($ 89,049.95) $ 51,986.86
-------------- --------------
Cash flows from financing
activities:
New loans $ 135,000.00 $ 630,000.00
Principal payments to
banks ( 1,203,825.97) ( 227,405.80)
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Net cash provided
(used) by financing
activities ($ 1,068,825.97) $ 402,594.20
-------------- --------------
Net increase (decrease) in
cash $ 129,282.38 ($ 622.78)
Cash at beginning of year 262,654.88 380,056.36
-------------- --------------
Cash at end of quarter $ 391,937.26 $ 379,433.58
============== ==============
RECONCILIATION OF NET INCOME TO
NET CASH USED BY OPERATING ACTIVITIES:
Net income (loss) $ 579,652.03 ($ 625,837.48)
Adjustments:
Depreciation and amortization 285,366.00 307,166.00
Increase in advance deposits 295,502.49 136,807.80
(Increase) in accounts
receivable ( 271,996.47) ( 312,985.40)
Decrease in prepaid expenses 103,855.09 105,224.82
Decrease (increase) in
inventories ( 4,003.45) 230.61
(Decrease) increase in
accounts payable and
accrued expenses ( 32,508.82) 125,345.95
Decrease in Loveride
receivable ( 1,224.28) -0-
Decrease in pre-opening
costs 2,396.34 -0-
Cost if land sold 145,314.59 -0-
Allocation of minority
interest in profit
(loss) of subsidiary 184,804.78 ( 191,156.14)
-------------- --------------
Net cash provided (used)
by operations $ 1,287,158.30 ($ 455,203.84)
============== ==============
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.
Because of Snow King's reliance on the airlines to
bring customers to Jackson, the effect the 911 tragedy
had on our business was somewhat devastating and it
seemed to turn off all previously interested buyers of
the Snow King Resort. Sonnenblick-Goldman has ceased
trying to locate a potential buyer for the Snow King
Complex. The Snow King Board of Directors is exploring
more efficient ways to manage the Complex to improve
the bottom line.
SALE OF ALPHORN MOTEL AND LOTS:
In March 2002, lots 12, 13, 14 with buildings were
sold by Snow King Resort for $1,080,000.00 and our
unimproved lots 4, 5 and 6 were sold for $610,000.00
for a total of $1,690,000.00. The net proceeds were
applied against debt.
After this payment the interest rate was reduced from
7.98% to 5.875% and the monthly payments were reduced
from $107,846.90 to $79,286.04 with no payments due
for the months of April, May and November. However,
there is a provision for monthly payments of $8,000.00
into a reserve account. This will help the cash flow
considerably.
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
Jun. 30, 2002
Sales $ 5,831,236
Gross Income $ 5,831,236
Net Income (Loss) from continuing operations $ 784,067
Less Minority Interest in profit or (loss) -
23.57% $ 184,804
Net Income (Loss) $ 599,263
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 June 30, 2002, one lawsuit had been filed against Snow
King Resort by a doctor who was hurt while riding the Alpine
slide. Our insurance company is handling the suit by the
doctor. It is expected that the insurance company will cover
all damages, if any.
Another lawsuit may be filed by some airline stewardesses over
an incident at the Snow King Resort.
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
No form 8-K was filed during this quarter.
303(b) 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations.
(a) ANALYSIS OF FINANCIAL CONDITION:
The Snow King Center which has been quite a drain on
Westan's resources is doing much better financially.
The airlines contemplate bringing in more flights
this coming winter. Summer business is good at the
Resort Complex. Previously reported refinancing,
Increased revenues and cost cutting make the balance
of the 2002 summer and the 2002-03 winter appear
quite promising.
(b) Please refer to Sale of Alphorn Motel & Lots in
Part I, item 1. The sale and proceeds are non-recurring.
Western Standard Corporation, the parent company, will
have sufficient funds to cover its expenses during 2002
from cash reserves, oil and gas royalties, interest, and
accounts receivable.
(c) RESULTS OF OPERATIONS:
Net gain for the first six months of 2002 amounted to
$764,456, compared to a net loss for the first six
months of 2001 in the amount of $816,994.
Profits and losses for the first six months of 2002 and
2001 came from:
SOURCE 2002 2001
----------- -----------
Western Standard Corporation ($ 20,145) ($ 6,851)
Snow King Resort, Inc. 784,067 ( 811,015)
Western Recreation Corporation 534 872
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$ 764,456 ($ 816,994)
=========== ===========
Major increases and decreases in the first six months of 2002 from
the same period in 2001 are:
Total revenues decreased (excluding sale of Alphorn and lots
in March, 2002 for $1,505,328) ($ 49,030)
Caused by:
Room rentals ($ 8,810)
Food and beverages ( 49,558)
Mountain operation 63,263
Western Standard ( 18,162)
Western Recreation ( 338)
Condominium rentals ( 21,247)
Other departments ( 14,178)
------------
($ 49,030)
============
Total costs and expenses increased $ 64,388
Room department:
Labor costs ($ 49,733)
Operating expenses 7,960
Food department ( 20,782)
Beverages ( 8,463)
Ski area 40,218
Alpine slide 1,937
Condominiums 38,201
Other departments ( 23,975)
Administrative and general ( 6,863)
Marketing department ( 39,294)
Maintenance department ( 10,270)
Energy department ( 2,982)
Property taxes 3,630
Insurance 6,768
Management fees 140
Interest-mortgage ( 28,574)
Closing costs-Alphorn lots 184,672
Depreciation/amortization/
loan fees ( 21,205)
WSC expense ( 4,868)
Miscellaneous ( 2,129)
------------
$ 64,388
============
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: August 9, 2002
--------------------------------
Stanford E. Clark, Pres., Treas.