Edgar Filing: CALCASIEU REAL ESTATE & OIL CO INC

Form 10-QSB for Calasieu Real Estate & Oil CO., INC.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB

(Mark One)

x	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2004

¨	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from to

Commission file number 0-9669

CALCASIEU REAL ESTATE & OIL CO., INC.

(Exact name of small business issuer as specified in its charter)

Louisiana

72-0144530

(State or other jurisdiction of

incorporation or organization)

(IRS Employer

Identification No.)

One Lakeside Plaza, Lake Charles, Louisiana 70601

(Address of principal executive offices)

337-494-4256

(Issuer’s telephone number)

(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 ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be filed by Section 12, 13, or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes ¨ 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: 1,942,495

Transitional Small Business Disclosure Format (Check one): Yes ¨ No x

Calcasieu Real Estate & Oil Co., Inc.

Form 10-QSB

For the Quarter Ended September 30, 2004

INDEX


			Page
Part I.	Financial Information

	Item 1.	Financial Statements

		a. Balance Sheet as of September 30, 2004	1-2

		b. Income Statements for the nine months ended September 30, 2003 and 2004	3

		c. Cash Flow Statements for the nine months ended September 30, 2003 and 2004	4

		d. Stockholder’s Equity Statement for the nine months ended September 30, 2004	5

		e. Notes to Financial Statements	6

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	7

	Item 4.	Controls and Procedures	8

Part II.	Other Information

	Item 6.	Exhibits and Reports on Form 8-K	8

Signatures			9

Certifications			10-13

Part I. Financial Information

Item 1. Financial Statements

Calcasieu Real Estate & Oil Co., Inc.

Balance Sheet

September 30, 2004

Assets


Current Assets

Cash and cash equivalents	$	833,959
Accounts receivables		400,008

Total Current Assets		1,233,967

Securities Available for Sale
Common stocks		670,082
U.S. Treasury notes		1,346,401
Corporate bond		200,944

		2,217,427

Property and Equipment (less accumulated depreciation of $72,746)		9,051
Timber (less accumulated depletion of $353,710)		502,215
Land		3,887,776

		4,399,042

	$	7,850,436

See accompanying notes

Calcasieu Real Estate & Oil Co., Inc.

Balance Sheet

September 30, 2004

Liabilities & Stockholders’ Equity


Current Liabilities

Trade payables and accrued expenses	$	33,965
Income taxes payable:
Current		119,533
Deferred		37,876

Total Current Liabilities		191,374

Stockholders’ Equity

Common stock, no par value: 3,000,000 shares authorized; 2,100,000 shares issued	$	72,256
Retained earnings		7,928,406
Accumulated other comprehensive income		33,916

		8,034,578
Less cost of treasury stock (157,505 shares)		375,516

		7,659,062

	$	7,850,436

See accompanying notes

Calcasieu Real Estate & Oil Co., Inc.

Statements of Income


	Quarter Ended September 30, 2004		Quarter Ended September 30, 2003		Nine Months Ended September 30, 2004		Nine Months Ended September 30, 2003
Revenues	$	810,111	$	586,669	$	1,952,933	$	1,399,962

Costs and expenses:
Oil and gas production		34,197		26,256		101,618		61,877
Agriculture		2,516		6,552		5,064		10,389
Timber		12,350		13,441		20,963		25,797
General and administrative		79,881		70,263		262,432		201,073
Depreciation and depletion		10,178		2,360		15,774		6,736

		139,122		118,872		405,851		305,872

Income from operations		670,989		467,797		1,547,082		1,094,090

Other income(expense):
Gain-Sale of land						1,426
Interest income		15,808		3,830		39,817		12,316
Dividends on stock		5,395		9,286		18,714		25,119
Gain-Sale of Securities						86,458

		21,203		13,116		146,415		37,435

Income before income taxes		692,192		480,913		1,693,497		1,131,525

Federal and state income taxes:
Current		224,976		147,565		539,143		347,717
Deferred

		224,976		147,565		539,143		347,717

Net Income	$	467,216	$	333,348	$	1,154,354	$	783,808

Per common stock (2004; 1,942,495 shares; 2003; 1,952,294 shares)	$	.24	$	.17	$	.59	$	.40
Dividends per share	$	.07	$	.07	$	.21	$	.22

See accompanying notes

Calcasieu Real Estate & Oil Co., Inc.

Statement of Changes in Cash Flows


	Nine Months Ended September 30, 2004			Nine Months Ended September 30, 2003
Cash Flows From Operating Activities
Net Income	$	1,154,354		$	783,808
Noncash (income) expenses included in net income:
Depreciation and depletion		15,774			6,736
(Gain) on sale of assets		(87,884	)
(Increase) decrease in current assets		(128,858	)		(7,122	)
Increase (decrease) in current liabilities		4,038			(2,982	)

Net cash provided by operating activities		957,424			780,440

Cash Flows From Investing Activities
Proceeds from sale of land		5,454
Purchase of available for sale securities		(2,060,625	)		(798,905	)
Sale of available for sale securities		1,815,878			1,301,887
Purchase of property, equipment and land		(15,579	)		(35,780	)

Net cash provided by (used in) investing activities		(254,872	)		467,202

Cash Flows From Financing Activities
Dividends paid net of refunds		(395,812	)		(625,415	)
Purchase of treasury stock					(68,687	)

Net cash (used in) financing activities		(395,812	)		(694,102	)

Net increase (decrease) in cash and cash equivalents		306,740			553,540

Cash and cash equivalents:
Beginning		527,219			583,327

Ending	$	833,959		$	1,136,867

See accompanying notes

Calcasieu Real Estate & Oil Co., Inc.

Statement of Changes in Stockholders’ Equity

Nine Months Ended September 30, 2004


	Comprehensive Income			Retained Earnings			Accumulated Other Comprehensive Income			Capital Stock Issued		Treasury Stock
Balance, December 2003				$	7,169,864		$	55,905		$	72,256	$	375,516
Comprehensive income:
Net income first half	$	687,138			687,138
Other comprehensive income:
Realized gains of securities sold net taxes of $30,535		(55,923	)					(55,923	)
Unrealized holdings gains occurring during half net of taxes of $12,890		19,433						19,433

Total comprehensive income	$	650,648

Dividends					(259,835	)

Balance, June 30, 2004				$	7,597,167		$	19,415		$	72,256	$	375,516

Comprehensive income:
Net income third quarter	$	467,216			467,216
Other comprehensive income:
Unrealized holdings gains occurring during quarter net of taxes of $9,667		14,501						14,501

Total comprehensive income - quarter	$	481,717

Total comprehensive income - nine months	$	1,132,365

Dividends					(135,977	)

Balance, September 30, 2004				$	7,928,406		$	33,916		$	72,256	$	375,516

See accompanying notes

Calcasieu Real Estate & Oil Co., Inc.

Notes to Financial Statements

September 30, 2004

(Unaudited)

Note 1. Basis of Presentation

In the opinion of management, the accompanying balance sheet and related interim statements of income, cash flows, and stockholders’ equity include all adjustments, consisting only of normal recurring items, necessary for their fair presentation in accordance with generally accepted accounting principles of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-QSB should be read in conjunction with Management’s Discussion and Analysis and financial statements and notes thereto included in the Calcasieu Real Estate & Oil Co., Inc. 2003 Form 10-K.

Note 2. Earnings Per Share

Net income per share of common stock for the interim periods is based on the weighted average number of shares outstanding for each period.

Note 3. Contingencies

There are no material contingencies known to management. The Company does not participate in off balance sheet arrangements.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

Revenue

Revenues for the first nine months of 2004 were $552,971 or 39.5% over the corresponding period of 2003. Revenues for third quarter of 2004 were up $223,442 or 38.1% over the third quarter of 2003. Comprising the $552,971 increase in 2004 over 2003 were an increase of $358,676 or 29.8% in oil and gas royalties, an increase of $165,427 or 316.7% in timber sales and an increase of $28,868 or 19.9% in agricultural income. The increase in oil and gas royalties was partially due to higher prices but primarily due to production from the Castor Creek field which began in 2004. The increase in timber sales is primarily due to timing because of the needs of mills in the immediate area. The increase in agricultural income was due to increased right of way money.

Operating Expenses

Operating expenses increased $99,979 or 32.7% for the first nine months of 2004 compared to the first nine months of 2003. Of this amount $39,741 was an increase in oil and gas production expense due entirely to severance taxes which are a percentage of gross oil and gas royalties. General and administrative expenses were $61,359 higher due to $24,263 for accrued property taxes, an increase of $12,130 in insurance, an increase of $10,000 in directors fees, an increase of $8,124 in legal fees and $6,238 higher costs to produce the annual report. Depreciation and depletion were up $9,038 due entirely to higher timber sales.

Net Income

Net income for the nine months ended September 30, 2004 was up $370,546 or 47.3% over the nine months ended September 30, 2003. During 2004 the Company had gain on sale of securities of $86,458 before taxes whereas in 2003 there were none. This made the percentage increase for 2004 larger then it would have been otherwise. The quarter ended September 30, 2004, had net income $133,868 or 40.2% larger than the quarter ended September 30, 2003.

Financial Condition

Current assets plus securities available for sale totaled $3,451,394 on September 30, 2004, compared to $2,254,154 on September 30, 2003. Current liabilities, which were also total liabilities were $191,374 on September 30, 2004, compared to $39,141 on September 30, 2003. The increase in liabilities was primarily due to an increase in current income taxes payable.

In July 2004, the Company purchased a $1,000,000 U.S. Treasury note maturing August, 2005.

Management believes existing cash and short-term investments together with funds generated from operations should be sufficient to meet operating requirements and provide funds for strategic acquisitions.

Operations

In July, 2004, Mayne & Mertz, Inc. purchased mineral leases from the Company on its one-half interest in 100 acres and its one-sixth interest in 300 acres all in Jefferson Davis Parish. Said leases give Mayne & Mertz, Inc. three years to drill for oil and gas.

Issues and Uncertainties

This quarterly report contains statements that are forward-looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of issues and uncertainties such as those listed below, which, among others, should be considered in evaluating the Company’s financial outlook.

Revenues from oil and gas provide most of the Company’s income. All of these revenues come from wells operated by other companies from property belonging to Calcasieu Real Estate & Oil Co., Inc. Consequently, these revenues fluctuate due to changes in oil and gas prices and changes in the operations of the other companies.

Item 4. Controls and Procedures

Under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, the Company has evaluated the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Exchange Act Rule 13a -14(c) within 90 days of the filing date of this quarterly report. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective. There were no significant changes in the Company’s internal controls or in other factors that could significantly affect internal controls subsequent to the date of their evaluation.

Part II. Other Information

Item 6. Exhibits and Reports on Form 8-K

(A)

Exhibits

31.1

Certifications

31.2

Certifications

32.1

Certification Pursuant to 18 U.S.C. Section 1850 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2

Certification Pursuant to 18 U.S.C. Section 1850 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(B)	Report of Form 8-K

None filed.

Items 1, 2, 3, 4 and 5 are not applicable and have been omitted.

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		Calcasieu Real Estate & Oil Co., Inc.

Date: October 29, 2004		/s/ William D. Blake
		William D. Blake
		Vice-President and Treasurer
		Chief Financial Officer

		/s/ Arthur Hollins, III
		Arthur Hollins, III
		President and
		Chief Executive Officer

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