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SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

 

 

FORM 10-Q

 

 

QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

 

For Quarter ended March 31, 2004   Commission file number 0-5426

 

 

THE WISER OIL COMPANY

A DELAWARE CORPORATION

 

 

I.R.S. Employer Identification No. 55-0522128

 

8115 Preston Road, Suite 400

Dallas, Texas 75225

Telephone (214) 265-0080

 

Former name, former address and former fiscal year, if changed since last report. NONE

 

 

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, and (2) has been subject to such filing requirements for the past 90 days.    YES  x    NO  ¨

 

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    YES  ¨    NO  x

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the close of the period covered by this report.

 

Class

  

Outstanding at March 31, 2004

$.01 par value   15,470,007

 

Table of Contents
          Page

PART I. FINANCIAL INFORMATION

    

Item 1.

    Financial Statements    3
     Consolidated Balance Sheets at March 31, 2004 and December 31, 2003    3
     Consolidated Statements of Income for the three months ended March 31, 2004 and March 31, 2003    4
     Consolidated Statements of Comprehensive Income for the three months ended March 31, 2004 and March 31, 2003    5
     Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2004    6
     Consolidated Statements of Cash Flows for the three months ended March 31, 2004 and March 31, 2003    7
     Notes to Consolidated Financial Statements    8

Item 2.

    Management’s Discussion and Analysis of Financial Condition and Results of Operations    16

Item 3.

    Qualitative and Quantitative Disclosure about Market Risk    21

Item 4.

    Controls and Procedures    22

PART II. OTHER INFORMATION

    

Item 1.

    Legal Proceedings    23

Item 2.

    Changes in Securities and Use of Proceeds    23

Item 3.

    Defaults Upon Senior Securities    23

Item 4.

    Submission of Matters to a Vote of Security Holders    23

Item 5.

    Other Information    23

Item 6.

    Exhibits and Reports on Form 8-K    23

SIGNATURES

   27

 

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PART I

 

FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

     March 31,
2004
     December 31,
2003
  
     (000’s)  

Assets

                 

Current Assets

                 

Cash and cash equivalents

    $ 5,123     $ 1,442  

Accounts receivable

      15,721       13,551  

Inventories

      567       270  

Prepaid expenses

      1,613       1,141  
    
 

Total current assets

      23,024       16,404  
    
 

Property and Equipment, at cost:

                 

Oil and gas properties (successful efforts method)

      432,884       422,084  

Other properties

      4,320       4,299  
    
 
       437,204       426,383  

Accumulated depreciation, depletion and amortization

      (227,031 )     (220,222 )
    
 

Net property and equipment

      210,173       206,161  

Other Assets

      1,870       2,031  
    
 
     $ 235,067     $ 224,596  
    
 

Liabilities and Stockholders’ Equity

                 

Current Liabilities:

                 

Accounts payable

    $ 18,380     $ 18,999  

Fair value of derivatives

      8,404       4,447  

Accrued liabilities

      12,431       6,584  
    
 

Total current liabilities

      39,215       30,030  
    
 

Pension Liability

      2,563       2,566  

Long-term Debt

      160,355       154,196  

Asset Retirement Obligation

      7,182       7,008  

Stockholders’ Equity:

                 

Common stock - $.01 par value; shares authorized – 30,000,000; shares issued – 15,646,211 at March 31, 2004 and December 31, 2003; shares outstanding – 15,470,007 at March 31, 2004 and December 31, 2003

      156       156  

Paid-in capital

      66,677       66,677  

Retained earnings

      (42,272 )     (37,951 )

Accumulated other comprehensive income

      3,519       4,242  

Treasury stock – 176,204 shares at cost at March 31, 2004 and December 31, 2003

      (2,328 )     (2,328 )
    
 

Total stockholders’ equity

      25,752       30,796  
    
 
     $ 235,067     $ 224,596  
    
 

 

The notes to financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003 are an integral part of these financial statements.

 

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CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

 

    

For the Three Months

Ended March 31,

  
     2004
     2003
  

Revenues:

                 

Oil and gas sales

    $ 28,398     $ 30,630  

Interest income

      35       13  

Other

      —         555  
    
 
       28,433       31,198  
    
 

Costs and Expenses:

                 

Operating costs

      9,222       7,196  

Production taxes

      906       1,132  

Loss on derivatives

      5,719       7,308  

Depreciation, depletion and amortization

      8,797       7,643  

Exploration

      1,730       3,626  

General and administrative

      2,805       2,292  

Interest expense

      3,575       3,551  
    
 
       32,754       32,748  
    
 

Income (Loss) Before Income Taxes

      (4,321 )     (1,550 )

Income Tax Expense (Benefit)

      —         (441 )
    
 

Net Income (Loss) Before Cumulative Effect of Accounting Change

      (4,321 )     (1,109 )

Cumulative Effect of Accounting Change, net of tax

      —         5,238  
    
 

Net Income (Loss) Before Preferred Dividends and Amortization

      (4,321 )     4,129  

Preferred dividends

      —         (432 )

Amortization of preferred stock discount

      —         (1,481 )
    
 

Net Income (Loss) Available to Common Stock

    $ (4,321 )   $ 2,216  
    
 

Earnings (Loss) Per Share:

                 

Basic:

                 

Net Income (Loss) Before Cumulative Effect of Accounting Change

    $ (0.28 )   $ (0.32 )

Cumulative Effect of Accounting Change, net of tax

      —         0.55  
    
 

Net Income (Loss)

    $ (0.28 )   $ 0.23  
    
 

Diluted:

                 

Net Income (Loss) Before Cumulative Effect of Accounting Change

    $ (0.28 )   $ (0.32 )

Cumulative Effect of Accounting Change, net of tax

      —         0.55  
    
 

Net Income (Loss)

    $ (0.28 )   $ 0.23  
    
 

Weighted average shares outstanding (000’s):

                 

Basic

      15,470       9,474  
    
 

Diluted

      15,962       15,356  
    
 

 

The notes to financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003 are an integral part of these financial statements.

 

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

 

    

For the Three Months

Ended March 31,

     2004
     2003

Net income(loss)

    $ (4,321 )   $ 4,129

Other comprehensive income (loss):

               

Foreign currency translation adjustment

      (723 )     5,110
    
 

Comprehensive income (loss)

    $ (5,044 )   $ 9,239
    
 

 

The notes to financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003 are an integral part of these financial statements.

 

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

For the Three Months Ended March 31, 2004

 

     Shares
     Amount
  
     (000’s)  

Common stock, $0.01 par value:

               

Balance at beginning and end of period

    15,646       156  
    
 

Paid-in capital

               

Balance at beginning and end of period

            66,677  
          

Retained Earnings:

               

Balance at beginning of period

            (37,951 )

Net Income (loss)

            (4,321 )
          

Balance at end of period

            (42,272 )
          

Accumulated other comprehensive income:

               

Balance at beginning of period

            4,242  

Foreign currency translation adjustment

            (723 )
          

Balance at end of period

            3,519  
          

Treasury Stock:

               

Balance at beginning and end of period

    (176 )     (2,328 )
    
 

Total Stockholders’ Equity

    15,470     $ 25,752  
    
 

 

The notes to financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003 are an integral part of these financial statements.

 

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CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

     For the Three Months
Ended March 31,
  
     2004
     2003
  

Cash Flows from Operating Activities:

                 

Net income (loss)

    $ (4,321 )   $ 4,129  

Adjustments to reconcile net income (loss) to cash flows from operating activities:

                 

Depreciation, depletion and amortization

      8,797       7,643  

Cumulative effect of an accounting change, net of tax

      —         (5,238 )

Deferred income taxes

      —         (441 )

Gains on sales of property

      —         (491 )

Property impairments and abandonments

      928       1,131  

Non-cash loss on derivative value

      3,957       668  

Amortization of other assets

      170       178  

Other changes

                 

Accounts receivable

      (2,235 )     (7,554 )

Inventories

      (318 )     35  

Prepaid expenses

      (483 )     (910 )

Accounts payable

      (574 )     8,939  

Accrued liabilities

      5,845       2,593  

Asset retirement obligation

      (85 )     —    
    
 

Operating Cash Flows

      11,681       10,682  
    
 

Cash Flows from Investing Activities:

                 

Capital expenditures