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, 1998
[ ]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
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(Exact Name of Registrant as Specified in its Charter)
WYOMING 83-0184378
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(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 $0.05 par at September 30, 1998.
PART 1, ITEM 1, 2 (1)(i)
FORM 10QSB
WESTERN STANDARD CORPORATION
Consolidated Balance Sheet
Unaudited
September 30, 1998
Current Assets:
Cash $ 231,053.00
Accounts Receivable 556,676.93
Allowance for Doubtful Accounts ( 17,028.39)
Notes receivable 10,000.00
Inventory - at cost 61,225.00
Total Current Assets $ 841,926.54
Property & Equipment, Net of
Accumulated Depreciation,
Amortization and Depletion $ 7,982,733.69
Other Assets:
* Accounts Receivable - Snow
King Resort Center, Inc. $ 1,012,271.69
Allowance for collectibility ( 1,000,000.00)
** Accounts Receivable - JH Springs
Water Company 5,179.72
Prepaid expenses 10,903.01
Prepaid loan fees 52,050.00
Investment in SKRCI 6,720.00
Leasehold Interest 34,978.84
Restricted Cash Reserves 44,589.61
Other 1,164.86
Total Other Assets $ 167,857.73
TOTAL ASSETS $ 8,992,517.96
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 a new business, approximately
49% owned by Western Standard Corporation and operated by its
subsidiary Snow King Resort, Inc. This is not a short term
receivable.
** This account receivable is from a new business owned by Snow
King Resort, Inc. and is not a short term receivable.
PART 1, ITEM 1, 2 (1)(i)
FORM 10QSB
WESTERN STANDARD CORPORATION
Consolidated Balance Sheet
Unaudited
September 30, 1998
Liabilities:
Accounts Payable $ 436,363.02
Accounts Payable - Other 87,305.99
Portion of Long Term Debt
payable within one year 329,101.00
Advance Deposit 238,763.11
Accrued Expenses 502,505.98
Subtotal $ 1,594,039.10
Long Term Debt 5,475,332.05
Fee Payable - Officer 90,000.00
TOTAL LIABILITIES $ 7,159,371.15
Minority Interest in Subsidiary
2,150 shares of Class A stock
in SKRI $ 2,394,668.31
STOCKHOLDERS INVESTMENT:
Common Stock, $0.05 par
value, 10,000,000 shares
authorized, 9,965,015
issued and outstanding
at September 30, 1998 $ 401,201.02
Capital in Excess of Par
Value 3,334,801.45
Accumulated Deficit ( 4,297,523.97)
Net Stockholders
Investment ($ 561,521.50)
TOTAL LIABILITIES AND CAPITAL $ 8,992,517.96
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
Sept. 30, 1998 Sept. 30, 1997
-------------- --------------
1. Gross sales less discounts,
returns and allowances $ 8,357,793.77 $ 7,700,727.42
2. Operating Revenues -0- -0-
3. Total of Captions 1 and 2 8,357,793.77 7,700,727.42
4. Costs and Expenses
(a) Operating Expenses 6,369,756.50 6,114,915.26
(b) Interest Expense 509,024.11 517,934.31
(c) Depreciation 474,400.00 463,000.00
Total Costs and Expenses 7,353,180.61 7,095,849.57
5. Income (Loss) before taxes
on income & extraordinary
items 1,004,613.16 604,877.85
6. Discontinued Operations -0- -0-
7. Provisions for taxes on
income 341,568.47 205,658.47
8. Income or (Loss) 663,044.69 399,219.38
9. Minority interest in
profit (loss) of
subsidiary 229,953.74 120,996.54
10. Income (Loss) before
extraordinary items 433,090.95 278,222.84
11. Extraordinary items,
income tax, benefit of
net operating loss
carryover and minority
share of tax 261,060.78 205,658.47
12. Net Income (Loss) 694,151.73 483,881.31
13. Earnings (Loss) per share:
$694,151.73 : 9,965,015
issued and outstanding .07
$483,881.31 : 9,965,015
issued and outstanding .05
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
Sept. 30, 1998 Sept. 30, 1997
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INCREASE (DECREASE) IN CASH:
Cash flows from operating
activities:
Cash received from
customers $ 7,772,812.46 $ 8,382,027.79
Cash paid to suppliers
and employees ( 6,283,172.62) ( 6,698,844.51)
Interest paid ( 509,024.11) ( 517,934.31)
Net cash provided
(used) by operations $ 980,615.73 $ 1,165,248.97
Cash flows from investing
activities:
Decrease in loans to
officer $ 900.00 ($ -0-)
Capital expenditures ( 333,787.09) ( 188,060.83)
Increase in restricted
cash ( 26,292.00) ( 46,445.75)
Reduction in Snow King
Center loan 123,624.28 39,526.57
Sale of assets 12,500.00 16,250.00
Net cash provided (used)
by investing
activities ($ 223,054.81) ($ 178,730.01)
Cash flows from financing
activities:
New Loans $ 50,000.00 $ 310,628.93
Principal payments to
banks ( 958,669.31) ( 1,178,939.09)
Net cash provided
(used) by financing
activities ($ 908,669.31) ($ 868,310.16)
Net increase (decrease) in
cash ($ 151,108.39) $ 118,208.80
Cash at beginning of year 382,161.39 159,921.96
Cash at end of quarter $ 231,053.00 $ 278,130.76
RECONCILIATION OF NET INCOME
TO NET CASH USED BY OPERATING
ACTIVITIES:
Net income (loss) $ 694,151.73 $ 483,881.31
Adjustments:
Depreciation and
amortization 491,602.00 479,627.00
(Decrease) increase in
advance deposits ( 233,881.77) ( 282,933.73)
Increase (decrease) in
accrued expenses 48,356.90 149,180.30
Decrease (increase) in
accounts receivable ( 351,099.54) ( 78,700.36)
Decrease in prepaid expenses 193,151.95 172,066.81
Decrease (increase) in
inventories ( 14,031.07) ( 19,387.01)
(Decrease) increase in
accounts payable ( 158,095.90) 140,518.11
Allocation of Minority
interest in profit
(loss) of subsidiary 310,461.43 120,996.54
Net cash provided by
operations $ 980,615.73 $ 1,165,248.97
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.
None
(v) Material accounting changes
None
PART I, Item 1, 2 (2)(iii)
Significant Equity Investors
Unaudited
January 1 to
Sept. 30, 1998
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Sales $ 8,283,705.24
Gross Income $ 8,283,705.24
Net Income (Loss) from continuing operations $ 975,620.44
Less Minority Interest in profit or (loss) -
23.57% $ 229,953.74
Net Income (Loss) $ 745,666.70
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, 1998, there were no lawsuits pending against
Western Standard Corporation or its subsidiary, Snow King
Resort, Inc.
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) No reports on Form 8-K were filed during this quarter
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. In addition, less revenue at the Center was
received than expected. At times Snow King Resort has not
had sufficient cash flow to pay its creditors in a timely
manner. Principal and interest payments on loans are
current.
On April 15, 1996, Snow King Resort, Inc. refinanced its
loan with ORIX USA at a fixed interest rate of 10 1/8% for
five years. Part of the proceeds were used to pay other
debt. The amount of the new loan was $6,150,000.
Western Standard Corporation, the parent company, will
have sufficient funds to cover its expenses during 1998
from cash reserves, oil and gas royalties, interest, and
accounts receivable.
(c) RESULTS OF OPERATIONS:
Net gain for the first nine months of 1998 amounted to
$1,004,613, compared to a gain for the first nine months
of 1997 in the amount of $604,877.
Profits and losses for the first nine months of 1998 and
1997 came from:
SOURCE 1998 1997
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Western Standard Corporatio ($ 12,076.23) $ 36,637
Snow King Resort, Inc. 975,620.44 513,349
Western Recreation Corporation 41,068.95 54,891
$ 1,004,613.16 $ 604,877
During the first nine months of 1998, total sales were up
and operating expenses increased. Hotel bookings at Snow
King Resort, Inc. were very good during the summer.
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
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(Registrant)
Dated: November 12, 1998 /s/ Stanford E. Clark
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Stanford E. Clark, President
Treasurer