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FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OF 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
Commission File Number 1-8292
HELM RESOURCES, INC.
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(Exact name of registrant as specified in charter)
Delaware 59-0786066
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(State or other jurisdiction (IRS EMPLOYER
incorporation or organization) Identification No.)
93 Mason Street
Greenwich, Connecticut 06830
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(Address of principal executive offices)
(Zip Code)
203-629-1400
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(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
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As of May 12, 1995 there were 2,160,617 shares of the Company's common stock,
par value $.01 per share, outstanding.
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PART I - FINANCIAL INFORMATION
HELM RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)
(UNAUDITED)
March 31, 1995
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ASSETS
- ------
CURRENT ASSETS:
Cash and cash equivalents $ 72
Accounts receivable, net 2,079
Inventories 203
Current portion of promissory notes
receivable from officers 180
Due from affiliates 231
Prepaid expenses 117
Other current assets 25
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TOTAL CURRENT ASSETS 2,907
INVESTMENTS IN AND DUE FROM AFFILIATES 2,545
PROMISSORY NOTES RECEIVABLE FROM OFFICERS 720
PROPERTY, PLANT AND EQUIPMENT, net 2,808
DEFERRED CHARGES AND OTHER ASSETS 381
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$ 9,361
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HELM RESOURCES, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
March 31, 1995
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LIABILITIES AND SHAREHOLDERS' DEFICIENCY
CURRENT LIABILITIES:
Revolving credit agreements $ 1,876
Accounts payable 2,024
Accrued interest 205
Accrued expenses 333
Current portion of long-term debt 275
Due for contact settlement 226
Reserve for discontinued operations 61
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TOTAL CURRENT LIABILITIES 5,000
LONG-TERM DEBT, NET OF CURRENT PORTION 1,724
PROMISSORY NOTES PAYABLE TO AFFILIATES 1,447
SUBORDINATED DEBENTURES 3,218
OTHER LIABILITIES 624
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TOTAL LIABILITIES 12,013
SHAREHOLDERS' DEFICIENCY (NOTE 5) (2,652)
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$ 9,361
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HELM RESOURCES, INC AND SUBSIDIARIE
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
Three Months Ended
March 31,
1995 1994
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REVENUES $ 3,502 $ 3,887
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COSTS, EXPENSES AND OTHER:
Operating expenses 2,738 2,735
Selling, general and
administrative expenses 1,033 1,017
Equity in net (earnings) losses
of affiliates 100 (12)
Increase in underlying equity of
Intersystems, Inc. - (115)
Interest and debt expense 221 208
Interest income (20) (39)
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TOTAL COSTS, EXPENSES AND OTHER 4,072 3,794
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INCOME (LOSS) BEFORE EXTRAORDINARY ITEM (570) 93
EXTRAORDINARY ITEM-EXTINGUISHMENT OF DEBT - (85)
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NET INCOME (LOSS) $ (570) $ 8
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Earnings Per Share:
Income (loss) before extraordinary item $ (.27) $ .03
Extraordinary item - (.04)
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Net earnings (LOSS) $ (.27) $ (.01)
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Average common shares outstanding 2,160 2,125
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HELM RESOURCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
Three Months Ended
March 31,
1995 1994
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Net cash provided by(used in)
operating activities $ 103 $ (59)
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Cash flows from investing activities:
Decrease (increase) in investments
in and due from affiliates 51 (54)
Additions to property, plant and
equipment (50) (195)
Proceeds from sales of securities - 192
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1 (57)
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Cash flows from financing activities:
Increase (decrease)in notes payable
and long-term debt (40) 193
Payment on contract settlement (33) (92)
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(73) 101
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NET INCREASE (DECREASE) IN CASH 31 (15)
CASH BEGINING OF PERIOD 41 210
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CASH END OF PERIOD $ 72 $ 195
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Cash paid during the period for:
Interest $ 62 $ 25
Taxes - -
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HELLM RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1995
Note 1. Management believes the accompanying unaudited condensed
consolidated financial statements of Helm Resources, Inc. and
subsidiaries (the "Company") include all adjustments (consisting
only of normal recurring accurals) required to present fairly the
financial statements for the period presented. The result for
operations for any interim period are not necessarily indicative
of the annual results of operations.
Note 2. Primary earnings per share is computed by dividing earnings, after
deducting the preferred stock dividend requirements of $31,600 in
the 1995 period and $21,000 in 1994, by the average common shares
outstanding during each period.
Note 3. Inventories consist of finished goods.
Note 4. Summarized Financial Data (in thousands):
Intersystems, Inc. (41% owned) Three Months Ended
- ------------------------------- March 31,
1995 1994
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REVENUES $ 3,253 $ 3,538
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Operating expenses 2,231 2,183
Selling, general and administrative
expenses 1,102 1,174
Interest expense (net) 107 155
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TOTAL COST AND EXPENSES 3,503 3,512
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NET INCOME (LOSS) $ (250) $ 26
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Note 5. Stockholders' Equity (in thousands)
Common Stock Additional
Preferred Stock $.01 par value Paid
Shares Amount Shares Amount in capital
------- ------- ------ ------- -----------
Balance
Jan. 1, 1995 43 $ - 2,161 $ 22 $ 19,840
Net (loss) - - - - -
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Balance
March 31, 1995 43 $ - 2,161 $ 22 $ 19,840
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Unrealized gain Retained
on available for Earnings Treasury
sale securities (Deficit) Stock TOTAL
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Balance
Jan. 1, 1995 $ 785 $ (22,907) $ (29) $(2,289)
Unrealized gain
on available for
sale securities 207 - - 207
Net (loss) - (570) - (570)
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Balance
March 31, 1995 $ 992 $ (23,477) $ (29) $(2,652)
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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Three Month Periods Ended March 31, 1995 and 1994
Revenue decreased by $385,000 (10%) to $3,502,000 in the 1995 period
compared to $3,887,000 due to a decrease in packaging volume for Interpak
Terminals.
Equity in earnings of affiliates (Intersystems, Inc.) was a loss of $100,000
in 1995 compared to income of $12,000 in 1994. Intersystems had benefited from
a large overseas sale in the 1994 period.
There was $115,000 of income in the 1994 first quarter which in the
Company's share of the increase in Intersystems' equity resulting from the
issuance by Intersystems of common shares upon conversion of subordinated
debentures and no corresponding amount for the 1995 period.
The extraordinary item in 1994 is the debt discount charged off which
related to $500,000 of subordinated debentures exchanged for preferred stock.
Impact of Inflation
Inflation has not had a significant impact on the Company's operations.
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LIQUIDITY AND CAPITAL RESOURCES
Operating activities for the three months ended March 31, 1995 provided cash
of $103,000. Financing activities used $73,000 for payments of obligations.
As a result, cash increased for the period by $31,000.
At March 31, 1995, the Company had a working capital deficit of $2,093,000
which included $1,669,000 for Interpak. The Interpak working capital deficit
includes $1,000,000 under a revolving loan agreement that expires February 1996
but which is expected to be refinanced when it becomes due although there can
be no assurance that the company will be able to refinance or refinance on the
same terms. It is expected that Interpak's operations should be sufficient to
generate cash flow to meet its other obligations as they become due. Included
in the balance of the deficit is approximately $539,000 of various accounts and
notes payable to affiliates, as to which the Company is confident of its
ability to fund these amounts as needed from operations and sales of investment
securities.
Future liquidity sources for the parent company will consist of
reimbursement of general and administrative expenses from subsidiaries and
affiliates, available funds from the earnings of Interpak and possible sales of
investment securities. On a longer term basis, the Company may be required to
seek additional liquidity through debt and equity offerings of the Company
and/or its subsidiaries.
Interpak Holdings, Inc., the Company's principal subsidiary, relies on cash
flow from operations and has a revolving line of credit of $1 million, secured
by accounts receivable, and was fully borrowed at March 31, 1995. The loan
matures in February 1996 with a reduction to $850,000 at August 31, 1995.
Interest is at prime plus 1%.
The Company and its subsidiaries have no significant commitments for capital
expenditures.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Helm Resources, Inc.
May 12, 1995 /s/ Daniel T. Murphy
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Daniel T. Murphy
Executive Vice President
Chief Accounting and
Financial Officer
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