x |
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
o |
TRANSITION
REPORT PURSUANT TO SECTION 13 OF 15(D) OR THE SECURITIES EXCHANGE
ACT OF
1934
|
Florida
|
65-0707824
|
|
(State
of Incorporation)
|
(IRS
Employer Identification Number)
|
200
West Cypress Creek Road, Suite 400, Fort Lauderdale,
Florida,
|
33309
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Part
I
|
Financial
Information:
|
||
Item
1.
|
Condensed
Unaudited Consolidated Financial Statements
|
||
Condensed
Consolidated Balance Sheets as of December 31, 2005 and June 30,
2005
|
3
|
||
|
|||
Condensed
Unaudited Consolidated Statements of Operations for the three-month
and
six-month periods ended December 31, 2005 and 2004
|
4
|
||
|
|||
Condensed
Unaudited Consolidated Statements of Cash Flows for the six-month
periods
ended December 31, 2005 and 2004
|
5
|
||
|
|||
Notes
to Condensed Unaudited Consolidated Financial Statements
|
6
|
||
|
|||
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
15
|
|
|
|||
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
29
|
|
|
|||
Item
4.
|
Controls
and Procedures
|
29
|
|
|
|||
Part
II
|
Other
Information
|
|
|
|
|||
Items 1. thru 6. |
30
- 34
|
||
|
|||
Signature Page |
35
|
||
|
|||
Certifications |
36
- 38
|
ASSETS
|
December
31, 2005
|
June
30, 2005
|
|||||
Current
assets:
|
Unaudited
|
||||||
Cash
and cash equivalents
|
$
|
3,445
|
$
|
4,108
|
|||
Accounts
receivable, less allowances of $2,682 and $1,806
|
25,625
|
14,129
|
|||||
Inventories
|
3,661
|
495
|
|||||
Prepaid
expenses and other current assets
|
227
|
660
|
|||||
Total
current assets
|
32,958
|
19,392
|
|||||
Property
and equipment, net
|
10,930
|
9,555
|
|||||
Goodwill
and intangible assets
|
5,166
|
100
|
|||||
Deferred
debt costs, net
|
1,028
|
991
|
|||||
Other
assets
|
97
|
87
|
|||||
Total
assets
|
$
|
50,179
|
$
|
30,125
|
|||
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
|||||||
Current
liabilities:
|
|||||||
Bank
line of credit payable
|
$
|
13,236
|
$
|
4,801
|
|||
Accounts
payable and other liabilities
|
13,020
|
7,345
|
|||||
Current
portion of long-term debt
|
1,385
|
1,385
|
|||||
Total
current liabilities
|
27,641
|
13,531
|
|||||
Long-term
liabilities:
|
|||||||
Promissory
notes, net of unamortized debt discount of $2,327 and
$2,056
|
11,620
|
9,584
|
|||||
Deferred
tax liability
|
1,400
|
—
|
|||||
Note
payable
|
178
|
172
|
|||||
Long-term
debt, net
|
13,198
|
9,756
|
|||||
Total
liabilities
|
40,839
|
23,287
|
|||||
Shareholders’
equity:
|
|||||||
Common
stock, par value $.01 per share; 50,000,000 shares
authorized;
9,813,962
and 8,953,444 issued and outstanding at December 31, 2005 and June
30,
2005, respectively
|
98
|
90
|
|||||
Additional
paid-in capital
|
18,346
|
16,325
|
|||||
Accumulated
deficit
|
(9,104
|
)
|
(9,577
|
)
|
|||
Total
shareholders’ equity
|
9,340
|
6,838
|
|||||
Total
liabilities and shareholders’ equity
|
$
|
50,179
|
$
|
30,125
|
Three-Month
Periods Ended
|
Six-Month
Periods Ended
|
||||||||||||
December
31,
|
December
31,
|
||||||||||||
2005
|
2004
|
2005
|
2004
|
||||||||||
Petroleum
product sales and service revenues
|
$
|
59,437
|
$
|
23,493
|
$
|
105,633
|
$
|
46,224
|
|||||
Fuel
taxes
|
8,113
|
6,154
|
15,556
|
12,332
|
|||||||||
Total
revenues
|
67,550
|
29,647
|
121,189
|
58,556
|
|||||||||
Cost
of petroleum product sales and service
|
55,608
|
22,049
|
97,991
|
42,980
|
|||||||||
Fuel
taxes
|
8,113
|
6,154
|
15,556
|
12,332
|
|||||||||
Total
cost of sales
|
63,721
|
28,203
|
113,547
|
55,312
|
|||||||||
Gross
profit
|
3,829
|
1,444
|
7,642
|
3,244
|
|||||||||
Selling,
general and administrative expenses
|
3,007
|
1,232
|
5,541
|
2,355
|
|||||||||
Operating
income
|
822
|
212
|
2,101
|
889
|
|||||||||
Interest
expense
|
(964
|
)
|
(393
|
)
|
(1,639
|
)
|
(775
|
)
|
|||||
Interest
and other income
|
—
|
—
|
11
|
—
|
|||||||||
Income
(loss) before income taxes
|
(142
|
)
|
(181
|
)
|
473
|
114
|
Income
tax expense
|
—
|
—
|
—
|
—
|
|||||||||
Net
income (loss)
|
$
|
(142
|
)
|
$
|
(181
|
)
|
$
|
473
|
$
|
114
|
|||
Basic
net income (loss) per share
|
$
|
(0.01
|
)
|
$
|
(0.02
|
)
|
$
|
0.05
|
$
|
0.02
|
|||
Diluted
net income (loss) per share
|
$
|
(0.01
|
)
|
$
|
(0.02
|
)
|
$
|
0.05
|
$
|
0.01
|
|||
Basic
weighted average common shares Outstanding
|
9,776,362
|
7,435,835
|
9,557,761
|
7,384,174
|
|||||||||
Diluted
weighted average common shares outstanding
|
9,776,362
|
7,435,835
|
10,453,356
|
8,185,749
|
2005
|
2004
|
||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|||||||
Net
income
|
$
|
473
|
$
|
114
|
|||
Adjustments
to reconcile net income to net cash (used
in) provided by operating activities:
|
|||||||
Depreciation
and amortization:
|
|||||||
Cost
of sales
|
735
|
532
|
|||||
Selling,
general and administrative
|
199
|
93
|
|||||
Amortization
of deferred debt costs
|
182
|
112
|
|||||
Amortization
of debt discount
|
334
|
168
|
|||||
Amortization
of stock compensation expense
|
194
|
—
|
|||||
Provision
for allowance for doubtful accounts
|
86
|
45
|
|||||
Changes
in operating assets and liabilities:
|
|||||||
Decrease
in restricted cash
|
—
|
13
|
|||||
Increase
in accounts receivable
|
(5,309
|
)
|
(55
|
)
|
|||
Decrease
(increase) in inventories, prepaid expenses and other
assets
|
1,056
|
(345
|
)
|
||||
Decrease
in accounts payable and other liabilities
|
(126
|
)
|
(318
|
)
|
|||
Net
cash (used in) provided by operating activities, net of acquisition
effect
|
(2,176
|
)
|
359
|
||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|||||||
Purchases
of property and equipment
|
(970
|
)
|
(158
|
)
|
|||
Cash
used in business acquisition
|
(2,124
|
)
|
—
|
||||
Net
cash used in investing activities
|
(3,094
|
)
|
(158
|
)
|
|||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|||||||
Advance
on private placement note offering
|
—
|
1,000
|
|||||
Net
borrowings on line of credit payable
|
1,741
|
397
|
|||||
Net
proceeds from exercise of common stock warrants
|
1,230
|
157
|
|||||
Proceeds
from issuance of promissory notes
|
3,000
|
—
|
|||||
Payments
of debt issuance costs
|
(219
|
)
|
—
|
||||
Repayments
of promissory notes
|
(452
|
)
|
—
|
||||
Principal
payment on promissory notes
|
(693
|
)
|
—
|
||||
Net
cash provided by financing activities
|
$
|
4,607
|
$
|
1,554
|
|||
NET
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
|
(663
|
)
|
1,755
|
||||
CASH
AND CASH EQUIVALENTS, beginning of period
|
4,108
|
2,708
|
|||||
CASH
AND CASH EQUIVALENTS, end of period
|
$
|
3,445
|
$
|
4,463
|
|||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
|
|||||||
Cash
paid for-
|
|||||||
Interest
|
$
|
628
|
$
|
486
|
|||
Income
taxes
|
$
|
—
|
$
|
—
|
(1)
|
NATURE
OF OPERATIONS
|
(2)
|
BASIS
OF PRESENTATION
|
(3) |
LINE
OF CREDIT PAYABLE
|
(4) |
NET
INCOME PER SHARE
|
(5)
|
STOCK-BASED
COMPENSATION
|
Shares
|
Weighted
average exercise price
|
||||||
Outstanding
July 1, 2005
|
1,206,152
|
$
|
1.78
|
||||
Granted
|
302,000
|
$
|
2.89
|
||||
Exercised
|
(2,000
|
)
|
$
|
1.24
|
|||
Terminated
|
(65,700
|
)
|
$
|
2.27
|
|||
Outstanding
December 31, 2005
|
1,440,452
|
$
|
1.99
|
||||
Exercisable
December 31, 2005
|
896,652
|
$
|
1.84
|
Shares
|
Weighted
average grant-date fair value
|
||||||
Nonvested
at July 1, 2005
|
319,000
|
$
|
1.51
|
||||
Granted
|
302,000
|
$
|
2.63
|
||||
Vested
|
(24,000
|
)
|
$
|
1.27
|
|||
Forfeited
|
(53,200
|
)
|
$
|
2.30
|
|||
Nonvested
at December 31, 2005
|
543,800
|
$
|
2.06
|
Shares
|
Weighted
average exercise price
|
||||||
Outstanding
July 1, 2005
|
233,750
|
$
|
1.52
|
||||
Granted
|
27,500
|
$
|
2.81
|
||||
Exercised
|
—
|
—
|
|||||
Terminated
|
—
|
—
|
|||||
Outstanding
December 31, 2005
|
261,250
|
$
|
1.66
|
||||
Exercisable
December 31, 2005
|
261,250
|
$
|
1.66
|
For
the Three Months Ended December 31,
|
For
the Six
Months
Ended December 31,
|
||||||
2004
|
2004
|
||||||
Net
(loss) income, as reported
|
$
|
(181
|
)
|
$
|
114
|
||
Stock-based
employee compensation expense included
in reported net income
|
$
|
—
|
$
|
—
|
|||
Stock-based
employee compensation expense not
included in reported net income
|
$
|
(24
|
)
|
$
|
(55
|
)
|
|
Net
income - pro forma
|
$
|
(205
|
)
|
$
|
59
|
||
Basic
net (loss) income per share - as reported
|
$
|
(0.02
|
)
|
$
|
0.02
|
||
Basic
net (loss) income per share - proforma
|
$
|
(0.03
|
)
|
$
|
0.01
|
||
Diluted
net (loss) income per share - as reported
|
$
|
(0.02
|
)
|
$
|
0.01
|
||
Diluted
net (loss) income per share - proforma
|
$
|
(0.03
|
)
|
$
|
0.01
|
For
the Three Months Ended December 31,
|
For
the Six Months Ended December 31,
|
||||||||||||
Assumptions:
|
2005
|
2004
|
2005
|
2004
|
|||||||||
Risk
free interest rate
|
6.75%
|
|
4.25%
|
|
5.68%
|
|
4.25%
|
|
|||||
Dividend
yield
|
0%
|
|
0%
|
|
0%
|
|
0%
|
|
|||||
Expected
volatility
|
110%
|
|
100%
|
|
110%
|
|
100%
|
|
|||||
Expected
life
|
9.6
years
|
10
years
|
8.8
years
|
10
years
|
(6) |
LONG-TERM
DEBT
|
December
31, 2005
|
June
30, 2005
|
||||||
September
2005 promissory notes (the “September 2005 Notes) (10% interest due
semi-annually, February 28 and August 31); principal payments of
$300,000 due beginning August 31, 2007, semi-annually on August 31
and February 28; balloon payment of $1,200,000 due at maturity on
August
31, 2010; effective interest rate of 18.9% includes cost of warrants
and
other debt issue costs
|
$
|
3,000
|
$
|
—
|
|||
January
2005 promissory notes (the “January 2005 Notes”) (10% interest due
semi-annually, July 24 and January 24); principal payments of $610,000
due
beginning January 24, 2007, semi-annually on January 24 and July
24;
balloon payment of $2,440,000 due at maturity on January 24, 2010;
effective interest rate of 19.6% includes cost of warrants and other
debt
issue costs
|
$
|
6,100
|
$
|
6,100
|
|||
August
2003 promissory notes (the August 2003 Notes) (10% interest due
semi-annually, December 31 and June 30); principal payments of
$692,500 due beginning August 28, 2005, semi-annually on August 28
and February 28; balloon payment of $2,770,000 due at maturity on
August
28, 2008; effective interest rate of 23.7% includes cost of warrants
and
other debt issue costs
|
$
|
6,232
|
$
|
6,925
|
|||
Note
Payable (contingent deferred promissory note subject to earn-out
provisions related to Shank Services acquisition if payable, due
March 31,
2007)
|
178
|
172
|
|||||
Unamortized
debt discount, net of amortization
|
(2,327
|
)
|
(2,056
|
)
|
|||
Less:
current portion
|
(1,385
|
)
|
(1,385
|
)
|
|||
Long-term
debt, net
|
$
|
11,798
|
$
|
9,756
|
(7)
|
SHAREHOLDERS’
EQUITY
|
Common
Stock
|
Additional
Paid-in
Capital
|
Accumulated
Deficit
|
Total
Shareholders’
Equity
|
||||||||||
June
30, 2005
|
$
|
90
|
$
|
16,325
|
$
|
(9,577
|
)
|
$
|
6,838
|
||||
Exercise
of options and warrants
|
8
|
1,222
|
—
|
1,230
|
|||||||||
Issuance
of
warrants
|
—
|
605
|
—
|
605
|
|||||||||
Amortization
of stock compensation expense
|
—
|
194
|
—
|
194
|
|||||||||
Net
income
|
—
|
—
|
473
|
473
|
|||||||||
December
31, 2005
|
$
|
98
|
$
|
18,346
|
$
|
(9,104
|
)
|
$
|
9,340
|
(8) |
H
& W PETROLEUM COMPANY, INC. ACQUISITION
|
Cash
at closing
|
$
|
82
|
|||||
Borrowings
under bank line of credit
|
1,454
|
||||||
Acquisition
costs — direct
|
588
|
||||||
Contingent
earnout
|
2,463
|
||||||
Total
purchase price
|
$
|
4,587
|
|||||
|
|||||||
Less:
Fair value of identifiable assets acquired:
|
|||||||
Cash
|
$
|
392
|
|||||
Plant,
property and equipment
|
1,206
|
||||||
Accounts
receivable (Includes $250 from Harkrider)
|
5,961
|
||||||
Inventory
|
3,565
|
||||||
Other
current assets
|
249
|
||||||
Fair
value of identifiable assets acquired
|
$
|
11,373
|
|||||
Plus:
Fair value of liabilities assumed:
|
|||||||
Bank
line of credit payable (Includes $387 from Harkrider)
|
$
|
7,086
|
|||||
Accounts
payable and other liabilities
|
5,489
|
||||||
Deferred
taxes on intangible assets
|
1,400
|
||||||
Current
portion of long-term debt
|
452
|
||||||
$
|
14,427
|
||||||
Less:
Contingent earnout not achieved
|
$
|
2,463
|
|||||
Excess
of purchase price over fair value of net assets acquired to be allocated
among intangible assets and goodwill
|
$
|
5,178
|
|
Amortizable
intangible assets:
|
||||
Customer
relationships
|
$
|
1,673
|
||
Supplier
contracts
|
801
|
|||
Trademarks
|
687
|
|||
Favorable
leases
|
196
|
|||
Total
amortizable intangible assets
|
3,357
|
|||
Accumulated
amortization
|
(90
|
)
|
||
Net
book value at 12/31/05
|
$
|
3,267
|
||
Goodwill
|
$
|
1,821
|
Fiscal
year:
|
||||
2006
(remainder)
|
$
|
180
|
||
2007
|
360
|
|||
2008
|
360
|
|||
2009
|
360
|
|||
2010
|
360
|
|||
2011
|
208
|
|||
Thereafter
|
1,439
|
|||
$
|
3,267
|
Six
months ended December 31, 2005
|
Year
ended
June
30, 2005
|
||||||
Fuel,
tax and service revenue
|
$
|
138,690
|
$
|
191,417
|
|||
Cost
of fuel, tax and service
|
129,615
|
179,975
|
|||||
Gross
Profit
|
$
|
9,075
|
$
|
11,442
|
|||
Net
income (loss)
|
$
|
201
|
$
|
(1,988
|
)
|
||
Basic
net income (loss) per share
|
$
|
0.02
|
$
|
(0.25
|
)
|
||
Diluted
net income (loss) per share
|
$
|
0.02
|
$
|
(0.25
|
)
|
ITEM 2. |
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
· |
Our
beliefs regarding our position in the commercial mobile fueling and
bulk
fueling; lubricant and chemical packaging, distribution and sales;
integrated out-sourced fuel management services; and transportation
logistics markets
|
· |
Our
strategies, plan, objectives and expectations concerning our future
operations, cash flows, margins, revenues, profitability, liquidity
and
capital resources
|
· |
Our
efforts to improve operational, financial and management controls
and
reporting systems and procedures
|
· |
Our
plans to expand and diversify our business through acquisitions of
existing companies or their operations and customer
bases
|
· |
the
avoidance future net losses
|
· |
the
avoidance of adverse consequences relating to our outstanding
debt
|
· |
our
continuing ability to pay interest and principal on our bank line
of
credit; the $6.232 million of August 2003 Notes; the $6.1 million
of
January 2005 Notes; and the $3.0 million of September 2005 Notes
and to
pay our accounts payable and other liabilities when
due
|
· |
our
continuing ability to comply with financial covenants contained in
our
credit agreements
|
· |
our
continuing ability to obtain all necessary waivers of covenant violations,
if any, in our debt agreements
|
· |
the
avoidance of significant provisions for bad debt reserves on our
accounts
receivable
|
· |
continuing
demand for our products and services at competitive prices and acceptable
margins
|
· |
the
avoidance of negative customer reactions to new or existing marketing
strategies
|
· |
generally
positive economic and market
conditions
|
· |
our
continuing ability to acquire sufficient trade credit from fuel and
lubricants suppliers and other
vendors
|
· |
successful
completion of the process of integrating the Shank Services and H
& W
operations into our existing operations, enhancing the profitability
of
the integrated businesses
|
· |
successful
execution of our acquisition and diversification strategy, including
the
availability of sufficient capital to acquire additional businesses
and to
support the infrastructure requirements of a larger combined
company
|
· |
success
in responding to competition from other providers of similar
services
|
·
|
Our
Business
|
· |
Financial
Performance
|
Three
Month Periods Ended
(Unaudited)
|
Increase
|
||||||||||||
12/31/2005(1)
|
12/31/2004
|
$
|
%
|
||||||||||
Total
revenues
|
$
|
67,550
|
$
|
29,647
|
$
|
37,903
|
128
|
%
|
|||||
Gross
profit
|
3,829
|
1,444
|
2,385
|
165
|
%
|
||||||||
Operating
income
|
822
|
212
|
610
|
288
|
%
|
Net
(loss)
|
(142
|
)
|
(181
|
)
|
39
|
22
|
%
|
||||||
EBITDA 2,5
|
1,455
|
522
|
933
|
179
|
%
|
||||||||
Basic
net loss per share
|
$
|
(0.01
|
)
|
$
|
(0.02
|
)
|
$
|
0.01
|
50
|
%
|
|||
Diluted
net loss per share
|
$
|
(0.01
|
)
|
$
|
(0.02
|
)
|
$
|
0.01
|
50
|
%
|
|||
Basic
weighted average shares outstanding
|
9,776,362
|
7,435,835
|
2,340,527
|
31
|
%
|
||||||||
Diluted
weighted average shares outstanding
|
9,776,362
|
7,435,835
|
2,340,527
|
31
|
%
|
||||||||
Depreciation
and amortization 3
|
$
|
531
|
$
|
310
|
$
|
221
|
71
|
%
|
|||||
Gallons
sold (in thousands)
|
25,249
|
14,795
|
10,454
|
71
|
%
|
||||||||
Average
net margin per gallon (in cents) 4
|
16.7
|
11.5
|
5.2
|
45
|
%
|
Six-Month
Periods Ended
(Unaudited)
|
Increase
|
||||||||||||
12/31/2005(1)
|
12/31/2004
|
$
|
%
|
||||||||||
Total
revenues
|
$
|
121,189
|
$
|
58,556
|
$
|
62,633
|
107
|
%
|
|||||
Gross
profit
|
7,642
|
3,244
|
4,398
|
136
|
%
|
||||||||
Operating
income
|
2,101
|
889
|
1,212
|
136
|
%
|
Net
income
|
473
|
114
|
359
|
315
|
%
|
||||||||
EBITDA 2,5
|
3,240
|
1,514
|
1,726
|
114
|
%
|
||||||||
Basic
net income per share
|
$
|
0.05
|
$
|
0.02
|
$
|
0.03
|
150
|
%
|
|||||
Diluted
net income per share
|
$
|
0.05
|
$
|
0.01
|
$
|
0.04
|
400
|
%
|
|||||
Basic
weighted average shares outstanding
|
9,557,761
|
7,384,174
|
2,173,587
|
29
|
%
|
||||||||
Diluted
weighted average shares outstanding
|
10,453,356
|
8,185,749
|
2,267,607
|
28
|
%
|
||||||||
Depreciation
and amortization 3
|
$
|
934
|
$
|
625
|
$
|
309
|
49
|
%
|
|||||
Gallons
sold (in thousands)
|
46,068
|
29,948
|
16,120
|
54
|
%
|
||||||||
Average
net margin per gallon (in cents) 4
|
18.2
|
12.6
|
5.6
|
44
|
%
|
3
Months Ended
|
|||||||||||||
Increase
|
Increase
|
||||||||||||
12/31/2005
|
12/31/2004
|
$ |
%
|
||||||||||
Net
income (loss)
|
$
|
(142
|
)
|
$
|
(181
|
)
|
$
|
39
|
22
|
%
|
|||
Add
back:
|
|||||||||||||
Interest,
net
|
964
|
393
|
571
|
145
|
%
|
||||||||
Depreciation
and amortization:
|
|||||||||||||
Cost
of sales
|
397
|
262
|
135
|
52
|
%
|
||||||||
Sales,
general and administrative
|
134
|
48
|
86
|
179
|
%
|
||||||||
Amortization
of stock compensation expense
|
102
|
—
|
102
|
100
|
%
|
||||||||
EBITDA
|
$
|
1,455
|
$
|
522
|
$
|
933
|
179
|
%
|
6
Months Ended
|
|||||||||||||
Increase
|
Increase
|
||||||||||||
12/31/2005
|
12/31/2004
|
$ |
%
|
||||||||||
Net
income
|
$
|
473
|
$
|
114
|
$
|
359
|
315
|
%
|
|||||
Add
back:
|
|||||||||||||
Interest,
net
|
1,639
|
775
|
864
|
111
|
%
|
||||||||
Depreciation
and amortization:
|
|||||||||||||
Cost
of sales
|
735
|
532
|
203
|
38
|
%
|
||||||||
Sales,
general and administrative
|
199
|
93
|
106
|
114
|
%
|
||||||||
Amortization
of stock compensation expense
|
194
|
—
|
194
|
100
|
%
|
||||||||
EBITDA
|
$
|
3,240
|
$
|
1,514
|
$
|
1,726
|
114
|
%
|
·
|
Organic
Growth Opportunities
|
·
|
Expansion
and Diversification Through
Acquisitions
|
·
|
Challenges
to Progress
|
·
|
Continue
our aggressive marketing and sales
programs
|
·
|
Re-engineer
our balance sheet by reducing debt and increasing shareholder
equity
|
·
|
Identify
acquire, finance and integrate diversified business
opportunities
|
·
|
Compete
effectively with both larger and smaller companies without adversely
affecting our service quality, margins or customer
retention
|
·
|
Control
our operating and administrative costs at all
levels
|
·
|
Manage
our cash requirements, expand our credit lines and reduce our interest
expense
|
·
|
Achieve
quarter-to-quarter improvements in our cash flows and earnings
performance
|
For
the Three-Month Periods Ended December 31
|
For
the Six-Month Periods Ended December 31
|
||||||||||||||||||||||||
Increase
(decrease)
|
Increase
(decrease)
|
||||||||||||||||||||||||
2005
|
2004
|
Dollars
|
Percent
|
2005
|
2004
|
Dollars
|
Percent
|
||||||||||||||||||
Total
revenues
|
$
|
67,550
|
$
|
29,647
|
$
|
37,903
|
128
|
%
|
$
|
121,189
|
$
|
58,556
|
$
|
62,633
|
107
|
%
|
|||||||||
Total
cost of sales and Services
|
63,721
|
28,203
|
35,518
|
126
|
%
|
113,547
|
55,312
|
58,235
|
105
|
%
|
|||||||||||||||
Gross
profit
|
3,829
|
1,444
|
2,385
|
165
|
%
|
7,642
|
3,244
|
4,398
|
136
|
%
|
|||||||||||||||
Selling,
general and administrative
expenses
|
3,007
|
1,232
|
1,775
|
144
|
%
|
5,541
|
2,355
|
3,186
|
135
|
%
|
|||||||||||||||
Interest
expense
|
(964
|
)
|
(393
|
)
|
(571
|
)
|
145
|
%
|
(1,639
|
)
|
(775
|
)
|
(864
|
)
|
111
|
%
|
|||||||||
Interest
and other income
|
—
|
—
|
—
|
—
|
11
|
—
|
11
|
100
|
%
|
||||||||||||||||
Net
(loss) income
|
$
|
(142
|
)
|
$
|
(181
|
)
|
$
|
39
|
22
|
%
|
$
|
473
|
$
|
114
|
$
|
359
|
315
|
%
|
|||||||
Gallons
delivered
|
25,249
|
14,795
|
10,454
|
71
|
%
|
46,068
|
29,948
|
16,120
|
54
|
%
|
|||||||||||||||
EBITDA
non GAAP Measure
|
$
|
1,455
|
$
|
522
|
$
|
933
|
179
|
%
|
$
|
3,240
|
$
|
1,514
|
$
|
1,726
|
114
|
%
|
Three
Months Ended
December
31,
|
|||||||
2005
|
2004
|
||||||
Stated
Rate Interest Expense:
|
|||||||
Bank
line of credit
|
$
|
276
|
$
|
71
|
|||
Long
term debt
|
383
|
173
|
|||||
Other
|
45
|
5
|
|||||
Total
stated rate interest expense
|
704
|
249
|
|||||
Non-Cash
Interest Amortization:
|
|||||||
Amortization
of deferred debt costs
|
90
|
57
|
|||||
Amortization
of debt discount
|
170
|
87
|
|||||
Total
amortization of interest expense
|
260
|
144
|
|||||
Total
interest expense
|
$
|
964
|
$
|
393
|
For
the Three Months Ended
|
|||||||
December
31, 2005
|
December
31, 2004
|
||||||
Net
income (loss)
|
$
|
(142
|
)
|
$
|
(181
|
)
|
|
Add back: | |||||||
Interest
expense
|
704
|
249
|
|||||
Non-cash
interest expense
|
260
|
144
|
|||||
Depreciation
and amortization expense:
|
|||||||
Cost
of sales
|
397
|
262
|
|||||
Selling,
general and administrative
|
134
|
48
|
|||||
Amortization
of stock compensation expense
|
102
|
—
|
|||||
EBITDA
|
$
|
1,455
|
$
|
522
|
Six
Months Ended
December
31,
|
|||||||
2005
|
2004
|
||||||
Stated
Rate Interest Expense:
|
|||||||
Bank
line of credit
|
$
|
344
|
$
|
137
|
|||
Long
term debt
|
728
|
346
|
|||||
Other
|
51
|
12
|
|||||
Total
stated rate interest expense
|
1,123
|
495
|
|||||
Non-Cash
Interest Amortization:
|
|||||||
Amortization
of deferred debt costs
|
182
|
112
|
|||||
Amortization
of debt discount
|
334
|
168
|
|||||
Total
amortization of interest expense
|
516
|
280
|
|||||
Total
interest expense
|
$
|
1,639
|
$
|
775
|
For
the Six Months Ended
|
|||||||
December
31, 2005
|
December
31, 2004
|
||||||
Net
income
|
$
|
473
|
$
|
114
|
|||
Add
back:
|
|||||||
Interest
expense
|
1,123
|
495
|
|||||
Non-cash
interest expense
|
516
|
280
|
|||||
Depreciation
and amortization expense:
|
|||||||
Cost
of sales
|
735
|
532
|
|||||
Selling,
general and administrative
|
199
|
93
|
|||||
Amortization
of stock compensation expense
|
194
|
—
|
|||||
EBITDA
|
$
|
3,240
|
$
|
1,514
|
ITEM 3. |
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
|
ITEM 4. |
CONTROLS
AND PROCEDURES
|
·
|
Election
of seven directors to the Company’s Board of Directors to serve until the
next Annual Meeting of Shareholders or until their successors are
elected:
|
Director
|
FOR
|
WITHHELD
|
|||||
Wendell
R. Beard
|
7,507,380
|
53,790
|
|||||
Richard
E. Gathright
|
7,479,680
|
81,490
|
|||||
Steven
R. Goldberg
|
7,509,600
|
51,570
|
|||||
Larry
S. Mulkey
|
7,513,290
|
47,880
|
|||||
C.
Rodney O’Connor
|
7,497,890
|
63,280
|
|||||
Robert
S. Picow
|
7,513,290
|
47,880
|
|||||
W.
Greg Ryberg
|
7,512,810
|
48,360
|
Exhibit
No.
|
Description
|
31.1
|
Certificate
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
31.2
|
Certificate
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
32.1
|
Certificate
of Chief Executive Officer and Chief Financial Officer pursuant to
Section
906 of the Sarbanes-Oxley Act of 2002
|
STREICHER MOBILE FUELING, INC. | ||
|
|
|
February 14, 2006 | By: | /s/ Richard E. Gathright |
Richard E. Gathright |
||
Chief Executive Officer and President |
|
|
|
By: | /s/ Michael S. Shore | |
Michael S. Shore |
||
Senior Vice President and Chief Financial Officer |