UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2002
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(D) OR THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 000-21825
STREICHER MOBILE FUELING, INC.
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(Exact name of registrant as specified in its charter)
FLORIDA 65-0707824
------------------------- ------------------------------------
(State of Incorporation) (IRS Employer Identification Number)
800 WEST CYPRESS CREEK ROAD, SUITE 580, FORT LAUDERDALE, FLORIDA, 33309
- ------------------------------------------------------------------ ----------
(Address of principal executive offices) (Zip Code)
(954) 308-4200
------------------------------------------------
(Issuer'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 |_|.
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes |_|. No |X|.
As of February 11, 2003 there were 7,218,887 shares of the registrant's
common stock outstanding.
STREICHER MOBILE FUELING, INC.
FORM 10-Q
INDEX
FORM 10-Q PART AND ITEM NO.
Part I Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of December
31, 2002 and June 30, 2002 (unaudited) ....................3
Condensed Consolidated Statements of Operations for
the three and six months ended December 31, 2002
(unaudited)................................................4
Condensed Consolidated Statements of Cash Flows for
the six month period ended December 31, 2002
(unaudited)................................................5
Notes to Condensed Unaudited Consolidated Financial
Statements.................................................6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.......................11
Item 3. Quantitative and Qualitative Disclosures About Market
Risk......................................................18
Item 4. Controls and Procedures...................................18
Part II Other Information
Items 1. thru 6. ..............................................19-20
Signature Page....................................................21
Certifications.................................................22-23
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
STREICHER MOBILE FUELING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2002 AND JUNE 30, 2002
(UNAUDITED)
(IN 000'S, EXCEPT SHARE AND PER SHARE
DATA)
December 31, June 30,
ASSETS 2002 2002
- -------------------------------------------------- ------------ ----------
Current assets:
Cash and cash equivalents....................... $ 21 $ 815
Restricted cash................................. 358 245
Accounts receivable, net ....................... 7,091 6,382
Inventories .................................... 233 363
Prepaid expenses and other current assets....... 444 452
--------- ----------
Total current assets....................... 8,147 8,257
Property and equipment, net....................... 9,517 10,012
Note receivable from related party ............... 132 200
Other assets...................................... 209 91
--------- ----------
Total assets............................... $ 18,005 $ 18,560
========= ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
- --------------------------------------------------
Current liabilities:
Bank line of credit payable ................... $ 5,533 $ 4,680
Current portion of long-term debt.............. 1,663 2,101
Accounts payable and other liabilities ........ 3,139 3,052
--------- ----------
Total current liabilities.................. 10,335 9,833
Long-term liabilities:
Convertible subordinated promissory notes...... 434 284
Long-term debt, excluding current portion...... 2,315 2,767
--------- ----------
Total liabilities.......................... 13,084 12,884
--------- ----------
Shareholders' equity:
Common stock, par value $.01 per share;
20,000,000 shares authorized; 7,218,887 and
7,211,751 issued and outstanding at
December 31, 2002 and June 30, 2002,
respectively................................. 72 72
Additional paid-in capital..................... 11,442 11,442
Accumulated deficit............................ (6,593) (5,838)
--------- ----------
Total shareholders' equity................. 4,921 5,676
--------- ----------
Total liabilities and shareholders' equity. $ 18,005 $ 18,560
========= ==========
SEE ACCOMPANYING NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS.
3
STREICHER MOBILE FUELING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTH PERIODS ENDED
DECEMBER 31, 2002 AND 2001
(UNAUDITED)
(IN 000'S, EXCEPT SHARE AND PER SHARE
DATA)
Three Month Period Ended Six Month Period Ended
December 31, December 31,
2002 2001 2002 2001
----------- ----------- ----------- -----------
Fuel sales and service revenues............... $ 12,667 $ 9,867 $ 25,223 $ 22,166
Fuel taxes.................................... 4,619 4,393 9,142 8,703
----------- ----------- ----------- -----------
Total revenues............................ 17,286 14,260 34,365 30,869
Cost of fuel sales and service................ 11,923 8,902 23,086 20,035
Fuel taxes.................................... 4,619 4,393 9,142 8,703
----------- ----------- ----------- -----------
Total costs............................... 16,542 13,295 32,228 28,738
Gross profit.............................. 744 965 2,137 2,131
Selling, general and administrative expenses.. 1,376 1,147 2,457 2,280
----------- ----------- ----------- -----------
Operating loss ........................... (632) (182) (320) (149)
Interest expense.............................. (228) (347) (457) (700)
Interest and other income..................... 2 14 22 27
----------- ----------- ----------- -----------
Loss before income taxes.................. (858) (515) (755) (822)
Income tax expense............................ -- -- -- --
----------- ----------- ----------- -----------
Net loss ................................. $ (858) $ (515) $ (755) $ (822)
=========== =========== =========== ===========
Basic and diluted net loss per share.......... $ (0.12) $ (0.11) $ (0.10) $ (0.18)
=========== =========== =========== ===========
Basic and diluted weighted average
common shares outstanding..................... 7,217,995 4,520,994 7,215,823 4,451,319
=========== =========== =========== ===========
SEE ACCOMPANYING NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS.
4
STREICHER MOBILE FUELING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTH PERIODS ENDED DECEMBER 31, 2002 AND 2001
(UNAUDITED)
(IN 000'S)
2002 2001
-------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss............................................ $ (755) $ (822)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization....................... 708 732
Gain on disposal of asset .......................... -- (10)
Provision for doubtful accounts..................... 198 98
Changes in operating assets and liabilities:
Increase in restricted cash......................... (113) (112)
(Increase) decrease in accounts receivable.......... (907) 1,560
Decrease in inventories............................. 130 31
(Increase) decrease in prepaids and other assets.... (110) 27
Decrease in accounts payable ....................... (120) (737)
Increase (decrease) in other liabilities ........... 111 (150)
-------- ---------
Net cash (used in) provided by operating
activities...................................... (858) 617
-------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment................. (213) (70)
Proceeds from disposal of property.................. -- 125
Decrease (increase) in note receivable due from
related party..................................... 68 (25)
-------- ---------
Net cash (used in) provided by investing
activities...................................... (145) 30
-------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in bank overdraft............... 105 (146)
Net borrowings on line of credit.................... 853 (1,054)
Proceeds from the issuance of convertible
subordinated promissory notes..................... 150 1,700
Principal payments on long-term debt................ (890) (1,170)
Costs associated with the extension of warrants..... (9) --
Net proceeds from issuance of common stock
and common stock warrants......................... -- 200
-------- ---------
Net cash provided by (used in) financing
activities...................................... 209 (470)
-------- ---------
NET (DECREASE) INCREASE IN CASH
AND CASH EQUIVALENTS................................ (794) 177
CASH AND CASH EQUIVALENTS, beginning of period........ 815 6
-------- ---------
CASH AND CASH EQUIVALENTS, end of period.............. $ 21 $ 183
======== =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest.............................. $ 350 $ 625
======== =========
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING
ACTIVITIES:
Issuance of common stock in lieu of interest
payments on convertible subordinated
promissory notes.................................. $ 10 $ 34
======== =========
SEE ACCOMPANYING NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS.
5
NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(1) NATURE OF OPERATIONS
Streicher Mobile Fueling, Inc., a Florida corporation (the "Company")
was formed in 1996.
The Company provides mobile fueling and fuel management out-sourced
services to businesses that operate all size fleets of vehicles and equipment,
including governmental agencies, utilities, trucking companies, bus lines,
hauling and delivery services, courier services, construction companies and
others. The Company's specialized truck fleet delivers fuel to customers'
locations on a regularly scheduled or as needed basis, refueling vehicles and
equipment and/or re-supplying fixed-site storage facilities. The Company's
patented proprietary electronic fuel tracking control system is used to measure,
record and track fuel dispensed to each vehicle and tank fueled at a customer
location, allowing verification of the amount and type of fuel delivered and
providing customers with customized fleet fuel data for management analysis and
tax reporting. At December 31, 2002, the Company had operations in California,
Florida, Georgia, Tennessee and Texas.
The Company generates substantially all of its revenue from mobile fueling
and fuel management services. Revenue is comprised principally of delivery
service charges and the related sales of diesel fuel and gasoline. Cost of sales
is comprised principally of direct operating expenses and the cost of fuel.
Included in both revenue and cost of sales are federal and state fuel taxes,
which are collected by the Company from its customers, when required, and
remitted to the appropriate taxing authority. The Company provides mobile
fueling and fuel management services at a minimum rate. Included in the rate are
negotiated service charges and the cost of fuel based on market prices. Revenue
and cost of fuel will vary depending on the upward or downward movement of fuel
prices in each market.
In the mobile fueling business, the majority of deliveries are made on
workdays, Monday through Friday, to coincide with customers' fuel service
requirements. Thus, the number of workdays in any given month will impact the
quarterly financial performance of the Company. In addition, a downturn in
customer demand generally takes place on and/or in conjunction with national
holidays, resulting in decreased volumes of fuel delivered. This downturn may be
offset during the fiscal year by emergency mobile fueling services and fuel
deliveries to certain customers resulting from impending or actual severe
meteorological or geological events, including hurricanes, tropical storms, ice
and snow storms, forest fires and earthquakes.
(2) BASIS OF PRESENTATION
The consolidated financial statements include the accounts of Streicher
Mobile Fueling, Inc. and its wholly owned subsidiary, Streicher Realty, Inc. All
significant intercompany balances and transactions have been eliminated in
consolidation.
The condensed unaudited consolidated financial statements included herein
have been prepared in accordance with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X, and do not include all the information and footnotes
required by generally accepted accounting principles; however, they do include
all adjustments of a normal recurring nature which, in the opinion of
management, are necessary to present fairly the results of operations of the
Company for the interim periods presented. Certain amounts have been
reclassified to conform with current period presentation. These interim
financial statements should be read in conjunction with the Company's audited
consolidated financial statements and related notes included in the Company's
Annual Report on Form 10-K for the year ended June 30, 2002.
6
(3) LIQUIDITY AND CAPITAL RESOURCES
The Company's liquidity and ability to meet its financial obligations is
dependent on, among other things, the Company's ability to generate cash flow
from operating activities; obtain sufficient trade credit from vendors; maintain
compliance with its debt covenants; raise any required additional capital
through the issuance of equity securities; and/or issue additional forms of
debt.
The Company is highly leveraged and since its inception has financed its
working capital requirements for operations by issuing common stock and
subordinated debt and utilizing credit facility borrowings.
The Company's material financial commitments, other than payroll, relate
primarily to maintaining its working capital line of credit and making monthly
principal and interest payments on its equipment notes.
The Company's debt agreements contain covenants establishing certain
financial requirements and operating restrictions. The Company's failure to
comply with any covenant or material obligation contained in these debt
agreements, absent a waiver or forbearance from the lenders, would result in an
event of default which could accelerate debt repayment terms under the debt
agreements. Due to cross-default provisions contained in the debt agreements, an
event of default could accelerate repayment terms under the other agreements,
which would have a material adverse affect on the Company's liquidity and
capital resources.
The Company and its principal equipment lender agreed to amend the
original security agreement between the parties, effective as of December 31,
2002, to extend the maturity dates of the equipment notes payable under it by
three months. This revision modifies the repayment schedule by reducing
principal payments for the period of December 2002 through April 2003 by
$467,000, and reduces the current portion of long-term debt at December 31,
2002.
From January 2001 through December 2002, the Company raised $6,150,000 in
capital through private placements of common stock and subordinated debt. These
proceeds have been used for working capital in the Company's operations as well
as the implementation of its business plan and turnaround program over that
period.
The Company has incurred net losses during most of its operating history
and has met its working capital and long-term debt service requirements by
raising both equity capital and subordinated debt and utilizing its bank credit
facility. For the fiscal year ended June 30, 2002, the Company reduced its net
loss to $1.162 million from a net loss of $2.774 million incurred in the prior
year ended June 30, 2001. While the Company earned net income of $63,000 in the
fourth quarter of its fiscal year ended June 30, 2002, and $103,000 in its first
quarter ended September 30, 2002, it incurred a net loss of $858,000 in its
second quarter ended December 31, 2002. These results compare to net losses of
$1.208 million, $307,000 and $515,000 for the quarters ended June 30, 2001,
September 30, 2001, and December 31, 2001, respectively.
Current management has continued to make substantive changes in
operations, management and reporting which have resulted in lowering certain
operating costs and improving net margins since January 2001. However, net
losses were incurred in six of the last eight quarterly reporting periods and
may continue in the second half of the current fiscal year.
During the second quarter ended December 31, 2002, deliveries to existing
customers declined as a result of the downturn in the economy and related
reduction in customers demand for mobile fueling. In addition, the Company
experienced a slow down in the new business closure rate due to the depressed
economic environment and significantly higher product prices which impeded the
decision making process of potential customers regarding the use of the
Company's mobile fueling services. Further, the rates for property and liability
insurance coverage have risen dramatically, and although the Company experienced
substantial improvement in its loss ratios during the prior coverage year, it
incurred increases of $360,000, annually, and $90,000 for the quarter ended
December 31, 2002 associated with its insurance renewal during the period. In
addition, the Company incurred other expenses of approximately $203,000 related
to the Company's new billing system conversion for the quarter ended December
31, 2002.
7
The Company's mobile fueling business requires it to expend considerable
working capital for fuel, labor and equipment costs prior to payments being
received from customers. The fuel purchased by the Company for resale to
customers must generally be paid for within 10 to 15 days of purchase, with
labor costs and related taxes paid bi-weekly, and equipment related costs
generally paid within 30 days. The Company invoices customers both daily and
weekly and generally collects the majority of its accounts within 30 to 45 days.
The Company recognizes that it must add incremental business from new and
existing customers at acceptable margins; continue to control and reduce
operating costs; improve equipment utilization; and generate additional cash
flow to support its working capital credit facility and long-term debt service
requirements. There can be no assurance that the Company will improve its
operating performance in the future, or that it will be able to raise additional
capital to fund any working capital or debt service shortfalls during possible
future business downturns, whether the downturn is caused by depressed economic
conditions or the Company's failure to successfully execute its business plan.
While the Company believes that cash flow from operations, modification of
repayment terms of its long-term debt and/or raising of additional equity and
debt capital should satisfy its liquidity requirements through December 31,
2003, it will seek additional sources of financing to supplement any cash flow
deficiencies which might arise. However, there can be no assurance that any
additional financing will be available to the Company on acceptable terms, or at
all. If the Company does not comply with the covenants in its debt agreements,
or if adequate funds are not available to finance operations and to pay debt
obligations as they become due, the Company may be required to significantly
curtail its operations and the Company's ability to continue as a going concern
would be impaired.
At December 31, 2002, the Company had cash and cash equivalents of $21,000
as compared to $815,000 at June 30, 2002. This reduction of $794,000 was
primarily due to the net loss of $755,000 for the six month period ending
December 31, 2002; increases in accounts receivables of $907,000, capital
expenditures of $213,000 primarily relating to the new billing system conversion
and an increase in other assets of $110,000 related to the new three-year bank
line of credit. These items were partially offset by non-cash depreciation and
provision for doubtful accounts totaling $906,000 and net increases in financing
activities of $209,000.
8
(4) BANK LINE OF CREDIT PAYABLE
On September 26, 2002, the Company entered into a new three-year $10
million credit facility with a national financial institution. This line of
credit replaced the Company's prior short-term $10 million credit facility. The
new line of credit permits the Company to borrow up to 85% of the total amount
of eligible accounts receivable. Interest is payable monthly at 6.0% (1.75% over
the prime rate of 4.25% at December 31, 2002), and outstanding borrowings under
the line are secured by substantially all Company assets other than its truck
fleet and related equipment. The maturity date of the new line of credit is
September 25, 2005. Should the Company elect to terminate the credit facility
prior to such date, prepayment fees of 3%, 1.5% and .5% will apply during year
one, two and three, respectively. In addition, the credit facility may be
extended by the mutual consent of the Company and the bank after year three.
In January 2003, the credit facility lender provided a short-term
accommodation to the Company in connection with the new billing system
conversion allowing aged receivables which would otherwise be considered
ineligible receivables under the terms of the credit agreement to remain
eligible receivables for working capital advances if certain conditions were
satisfied by the Company. These conditions were satisfied and the accommodation
resulted in additional credit availability to the Company of approximately
$500,000.
As of December 31, 2002 and June 30, 2002, the Company had outstanding
borrowings of $5.53 million and $4.68 million, respectively, under its lines of
credit. Based on eligible receivables outstanding at December 31, 2002, the
Company had approximately $202,000 of cash availability on its new line of
credit, and was in compliance with the financial covenants required by the
credit facility. At June 30, 2002, the Company had $250,000 of cash availability
on its prior short-term line of credit.
(5) NET LOSS PER SHARE
Basic and diluted loss per share is computed by dividing the net loss
attributable to common shareholders by the weighted-average number of common
shares outstanding during the period. The dilutive effect of outstanding stock
options and warrants is reflected in diluted loss per share by application of
the treasury stock method. For loss periods, weighted average common share
equivalents are excluded from the calculation since their effect would be
antidilutive.
At December 31, 2002, common stock equivalents consisting of 2,558,027
employee and director stock options and common stock warrants were outstanding
at prices ranging from $1.00 to $9.49 per share. For the period ended December
31, 2002, these common stock equivalents were antidilutive and not included in
the computation of diluted net loss per share. At December 31, 2001, common
stock equivalents consisting of 2,313,977 employee and director stock options
and common stock warrants were outstanding at prices ranging from $1.24 to $9.49
per share. For the period ended December 31, 2001, these common stock
equivalents were antidilutive and not included in the computation of net loss
per share.
On October 29, 2002, the Company extended the exercise period for all
outstanding common stock warrants from December 11, 2002 to December 11, 2003.
(6) EQUITY AND DEBT SECURITIES
In January 2002, certain holders of the convertible subordinated
promissory notes converted an aggregate of $2.617 million to shares of the
Company's common stock at a conversion price of $1.24 per share, for a total of
2,110,322 shares of the Company's common stock. The notes converted contained
conversion rates ranging from $1.35 to $1.50 per share. The holders of the
remaining $283,600 of convertible subordinated promissory notes issued by the
Company who did not elect to so convert their notes in January 2002 waived any
conversion price adjustment. In September 2002, the maturity dates of these
non-converted notes were extended for one year to August 31, 2004.
9
On December 23, 2002, the Company issued a $150,000 short-term promissory
note to a shareholder. The note was due on January 31, 2003, with interest at 5%
over the prime interest rate. On January 21, 2003 the Company and the holder of
the note substituted the note for a $150,000 subordinated promissory note due on
January 31, 2005, bearing interest at an annual rate of 9%. With the consent of
the holder, interest on the note may be paid in the Company's common stock, with
the stock value based on the average closing bid of the stock for the five
trading days before the last day of the quarter in which interest is due.
On January 21, 2003, the Company issued $300,000 of subordinated
promissory notes to two shareholders. The notes are due on January 31, 2005 and
bear interest at an annual rate of 9%. With the consent of the holders, interest
on the notes may be paid in the Company's common stock, with the stock value
based on the closing bid price of the stock for the five trading days before the
last day of the quarter in which the interest is due.
All the subordinated notes outstanding have cross-default provisions
related to the other outstanding debt agreements.
(7) RELATED PARTY TRANSACTION
As previously reported in the Company's Form 10-K, in July 2002 the
Company suspended further payments of salary to Stanley H. Streicher, the
Company's former chairman, under his November 7, 2000, employment agreement on
account of an unpaid debt.
As of December 31, 2002, the Company had set off $89,000 of Mr.
Streicher's net salary against the outstanding receivable.
(8) RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
SFAS No. 146, Costs Associated with Exit or Disposal Activities, was
issued in June 2002. The Statement addresses financial accounting and reporting
for costs associated with exit or disposal activities and nullifies EITF Issue
No. 94-3, Liability Recognition for Certain Employee Termination Benefits and
Other Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring). This statement requires that a liability for a cost associated
with an exit or disposal activity be recognized when the liability is incurred.
The statement is effective for exit or disposal activities that are initiated
after December 31, 2002, and will result in a change in accounting policy
associated with the recognition of liabilities in connection with future exit
and disposal activities.
In November 2002, the FASB issued Interpretation No. 45, Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness to Others, an interpretation of FASB Statements No.
5, 57 and 107 and a rescission of FASB Interpretation No. 34. This
Interpretation elaborates on the disclosures to be made by a guarantor in its
interim and annual financial statements about its obligations under guarantees
issued. The Interpretation also clarifies that a guarantor is required to
recognize, at inception of a guarantee, a liability for the fair value of the
obligation undertaken. The initial recognition and measurement provisions of the
Interpretation are applicable to guarantees issued or modified after December
31, 2002 and are not expected to have a material effect on the Company's
financial statements. The disclosure requirements are effective for financial
statements of interim and annual periods ending after December 31, 2002.
In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based
Compensation - Transition and Disclosure, an amendment of FASB Statement No.
123. This Statement amends FASB Statement No. 123, Accounting for Stock-Based
Compensation, to provide alternative methods of transition for a voluntary
change to the fair value method of accounting for stock-based employee
compensation. In addition, this Statement amends the disclosure requirements of
Statement No. 123 to require prominent disclosures in both annual and interim
financial statements. Certain of the disclosure modifications are required for
fiscal years ending after December 15, 2002. The adoption of SFAS No. 148 is not
expected to have a material effect on the Company's financial statements.
10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the Company's
unaudited condensed consolidated financial statements and the related notes
included elsewhere in this Form 10-Q. In addition, reference should be made to,
and the following discussion should be read in conjunction with, the Company's
audited consolidated financial statements and related notes and the Management's
Discussion and Analysis of Financial Condition and Results of Operations
included in the Company's Annual Report on Form 10-K for the fiscal year ended
June 30, 2002.
This report contains "forward looking statements" within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). These statements concern expectations, beliefs, projections, future plans
and strategies, anticipated events or trends and similar expressions concerning
matters that are not historical facts. Statements preceded by, followed by, or
that include the words "believes," "expects," "anticipates," or similar
expressions are generally considered to be forward-looking statements.
This report contains forward-looking statements, including the following:
o The Company's beliefs regarding its position in the mobile fueling
industry
o The Company's strategies, plans and objectives and expectations
concerning its future operations, cash flow, margins, revenue,
profitability, liquidity and capital resources
o The Company's plans to improve financial and management controls,
reporting systems and procedures
The forward-looking statements reflect the Company's current view about
future events and are subject to risks, uncertainties and assumptions. The
Company cautions readers of this report that certain important factors may have
affected, and could in the future affect, its actual results and could cause
actual results to differ significantly from those expressed in any
forward-looking statement. The following important factors, in addition to
factors discussed elsewhere in this report and in the section "Certain Risk
Factors Affecting Future Operating Results" in the Company's Annual Report on
Form 10-K for the fiscal year ended June 30, 2002, could prevent the Company
from achieving its goals, and cause the assumptions underlying the
forward-looking statements and the actual results to differ materially from
those expressed in or implied by those forward-looking statements:
o continued net losses;
o adverse consequences relating to the Company's outstanding debt;
o the Company's ability to comply with financial covenants contained in
its new three-year $10 million credit facility and equipment notes
security agreements;
o the Company's ability to repay its bank line of credit, equipment
notes payable and subordinated promissory notes and pay its accounts
payable and other liabilities when due;
o the Company's ability to reach an agreement with its lenders with
regard to a waiver of possible covenant violations and an amendment
to the financial covenants contained in its debt agreements in the
event of the Company were not in compliance with such financial
covenants;
o the likelihood that the Company's bank line of credit lender would
exercise remedies afforded to it in the event of the Company's
default under its credit facility agreement and the impact of such
remedies on the Company;
11
o the likelihood that the Company's equipment lenders would exercise
remedies afforded to them in the event of the Company's default under
their security agreements and the impact of such remedies on the
Company;
o further provisions for bad debts on the Company's accounts
receivable;
o fluctuations in demand for the Company's services which are largely
dependent upon economic conditions;
o the Company's ability to acquire sufficient trade credit from
vendors;
o competitive pricing for the Company's services at acceptable net
margins
GENERAL
The Company generates substantially all of its revenue from providing
mobile fueling and fuel management services. Revenue is comprised principally of
delivery service charges and the related sale of diesel fuel and gasoline. Cost
of sales is comprised principally of direct operating expenses and the cost of
fuel. Included in both revenue and cost of sales are federal and state fuel
taxes, which are collected by the Company from its customers, when required, and
remitted to the appropriate taxing authorities.
The Company provides mobile fueling and fuel management services at a
negotiated rate for service plus the cost of fuel based on market prices.
Revenue levels will vary depending on the upward or downward movement of fuel
prices in each market. For the quarter ended December 31, 2002, market prices
for fuel were substantially higher than for the quarter ended December 31, 2001.
Volumes declined between the comparable periods due primarily to the elimination
of non-profitable markets and customers. Revenues, however, increased for the
quarter ended December 31, 2002, as compared to the quarter ended December 31,
2001, since the Company delivered more higher priced mobile fueling volumes and
reduced lower priced bulk deliveries.
In the mobile fueling business, the majority of deliveries are made on
workdays, Monday through Friday, to coincide with customers' fuel service
requirements. Thus, the number of workdays in any given month will impact the
quarterly financial performance of the Company. In addition, a downturn in
customer demand generally takes place on and/or in conjunction with national
holidays, resulting in decreased volumes of fuel delivered. This downturn may be
offset by emergency mobile fueling services and fuel deliveries to certain
customers resulting from impending or actual severe meteorological or geological
events, including hurricanes, tropical storms, ice and snow storms, forest fires
and earthquakes.
The Company believes that there are opportunities to increase the size of
its mobile fueling and fuel management services business and the volumes of fuel
sold and delivered in conjunction with it. The Company also believes its
marketing and sales function will help grow the Company's business. However,
this growth is dependent upon a number of business and economic factors,
including the success of the marketing and sales function and other business
strategies; the availability of qualified personnel to provide the level of
service required by customers; the generation of cash flow from operating
activities; the availability of sufficient trade credit, debt or equity capital
to meet business requirements; and changes in market conditions in the related
transportation or petroleum industries, some of which factors are beyond the
Company's control.
LIQUIDITY AND CAPITAL RESOURCES
The Company's liquidity and ability to meet its financial obligations is
dependent on, among other things, the Company's ability to generate cash flow
from operating activities; obtain sufficient trade credit from vendors; maintain
compliance with its debt covenants; raise any required additional capital
through the issuance of equity securities; and/or issue additional forms of
debt.
12
The Company is highly leveraged and since its inception has financed its
working capital requirements for operations by issuing common stock and
subordinated debt and utilizing credit facility borrowings.
The Company's material financial commitments, other than payroll, relate
primarily to maintaining its working capital line of credit and obligation to
make monthly payments of principal and interest on its equipment notes.
The Company's debt agreements contain covenants establishing certain
financial requirements and operating restrictions. The Company's failure to
comply with any covenant or material obligation contained in these debt
agreements, absent a waiver or forbearance from the lenders, would result in an
event of default which could accelerate debt repayment terms under the debt
agreements. Due to cross-default provisions contained in the debt agreements, an
event of default could accelerate repayment terms under the other agreements,
which would have a material adverse affect on the Company's liquidity and
capital resources.
The Company and its principal equipment lender agreed to amend the
original security agreement between the parties, effective as of December 31,
2002, to extend the maturity dates of the equipment notes payable under it by
three months. This revision modifies the repayment schedule reducing principal
payments for the period of December 2002 through April 2003 by $467,000, and
reduces the current portion of long-term debt at December 31, 2002.
From January 2001 through December 2002, the Company raised $6,150,000 in
capital through private placements of common stock and subordinated debt. These
proceeds have been used for working capital in the Company's operations as well
as the implementation of its business plan and turnaround program over that
period.
The Company has incurred net losses during most of its operating history
and has met its working capital and long-term debt service requirements by
raising both equity capital and subordinated debt and utilizing its bank credit
facility. For the fiscal year ended June 30, 2002, the Company reduced its net
loss to $1.162 million from a net loss of $2.774 million incurred in the prior
year ended June 30, 2001. While the Company earned net income of $63,000 in the
fourth quarter of its fiscal year ended June 30, 2002, and $103,000 in its first
quarter ended September 30, 2002, it and incurred a net loss of $858,000 in its
second quarter ended December 31, 2002. These results compare to net losses of
$1.208 million, $307,000 and $515,000 for the quarters ended June 30, 2001,
September 30, 2001, and December 31, 2001, respectively.
Current management has continued to make substantive changes in
operations, management and reporting which have resulted in lowering certain
operating costs and improving net margins since January 2001. However, net
losses were incurred in six of the last eight quarterly reporting periods and
may continue in the second half of the current fiscal year.
During the second quarter ended December 31, 2002, deliveries to existing
customers declined as a result of the downturn in the economy and related
reduction in customers demand for mobile fueling. In addition, the Company
experienced a slow down in the new business closure rate due to the depressed
economic environment and significantly higher product prices which impeded the
decision making process of potential customers regarding the use of the
Company's mobile fueling services. Further, the rates for property and liability
insurance coverage have risen dramatically, and although the Company experienced
substantial improvement in its loss ratios during the prior coverage year, it
incurred increases of $360,000, annually, and $90,000 for the quarter ended
December 31, 2002 associated with its insurance renewal during the period. In
addition, the Company incurred other expenses of approximately $203,000 related
to the Company's new billing system conversion for the quarter ended December
31, 2002. These costs contributed to the $858,000 loss in the quarter. The other
costs related to the billing system conversion will enable the Company to
achieve more timely and accurate customer billings; meet web-based e-commerce
customer demands; and to improve revenue collections. Customers can now be
billed on a daily basis which provides for more effective utilization of the
Company's working capital line of credit.
The Company's mobile fueling business requires it to expend considerable
working capital for fuel, labor and equipment costs prior to payments being
received from customers. The fuel purchased by the Company for resale to
customers must generally be paid for within 10 to 15 days of purchase, with
labor costs and related taxes paid bi-weekly, and equipment related costs
13
generally paid within 30 days. The Company invoices customers both daily and
weekly and generally collects the majority of its accounts within 30 to 45 days.
The Company recognizes that it must add incremental business from new and
existing customers at acceptable margins; continue to control and reduce
operating costs; improve equipment utilization; and generate additional cash
flow to support its working capital credit facility and long-term debt service
requirements. There can be no assurance that the Company will improve its
operating performance in the future, or that it will be able to raise additional
capital to fund any working capital or debt service shortfalls during possible
future business downturns, whether the downturn is caused by depressed economic
conditions or the Company's failure to successfully execute its business plan.
While the Company believes that cash flow from operations, modification of
repayment terms of its long-term debt and/or raising of additional equity and
debt capital should satisfy its liquidity requirements through December 31,
2003, it will seek additional sources of financing to supplement any cash flow
deficiencies which might arise. However, there can be no assurance that any
additional financing will be available to the Company on acceptable terms, or at
all. If the Company does not comply with the covenants in its debt agreements,
or if adequate funds are not available to finance operations and to pay debt
obligations as they become due, the Company may be required to significantly
curtail its operations and the Company's ability to continue as a going concern
would be impaired.
At December 31, 2002, the Company had cash and cash equivalents of $21,000
as compared to $815,000 at June 30, 2002. This reduction of $794,000 was
primarily due to the net loss of $755,000 for the six month period ending
December 31, 2002; increases in accounts receivables of $907,000, capital
expenditures of $213,000 primarily relating to the new billing system conversion
and an increase in other assets of $110,000 related to the new three-year bank
line of credit. These items were partially offset by non-cash depreciation and
provision for doubtful accounts totaling $906,000 and net increases in financing
activities of $209,000.
NEW THREE-YEAR $10 MILLION CREDIT FACILITY
On September 26, 2002, the Company entered into a new three-year $10
million credit facility with a national financial institution. This line of
credit replaced the Company's prior short-term $10 million credit facility. The
new line of credit permits the Company to borrow up to 85% of the total amount
of eligible accounts receivable. Interest is payable monthly at 6.0% (1.75% over
the prime rate of 4.25% at December 31, 2002), and outstanding borrowings under
the line are secured by substantially all Company assets other than its truck
fleet and related equipment. The maturity date of the new line of credit is
September 25, 2005. Should the Company elect to terminate the credit facility
prior to such date, prepayment fees of 3%, 1.5% and .5% will apply during year
one, two and three, respectively. In addition, the credit facility may be
extended by the mutual consent of the Company and the bank after year three.
In January 2003, the credit facility lender provided a short-term
accommodation to the Company in connection with the new billing system
conversion allowing aged receivables which would otherwise be considered
ineligible receivables under the terms of the credit agreement to remain
eligible receivables for working capital advances if certain conditions were
satisfied by the Company. These conditions were satisfied and the accommodation
resulted in additional credit availability to the Company of approximately
$500,000.
As of December 31, 2002 and June 30, 2002, the Company had outstanding
borrowings of $5.53 million and $4.68 million, respectively, under its lines of
credit. Based on eligible receivables outstanding at December 31, 2002, the
Company had approximately $202,000 of cash availability on its new line of
credit, and was in compliance with all financial covenants required by the
credit facility. At June 30, 2002, the Company had $250,000 of cash availability
on its prior short-term line of credit.
14
Management believes that the Company's new three-year credit facility will
provide the Company with the financing needed to maintain and grow its business.
However, if additional financing is required, there can be no assurance that the
Company will be able to obtain such financing from the new bank at acceptable
terms or at all. Further, since the Company's borrowings under its bank line of
credit bear interest at variable interest rates and represent a significant
portion of the Company's outstanding debt, the Company's financial results will
be impacted by significant increases or decreases in interest rates.
COMPARISON OF THREE MONTHS ENDED DECEMBER 31, 2002 TO THREE MONTHS ENDED
DECEMBER 31, 2001
REVENUES
Revenue increased approximately $3.0 million, or 21.0%, for the three
months ended December 31, 2002 compared to the three months ended December 31,
2001. The increase in revenue resulted primarily from substantially higher
wholesale fuel prices and additional higher priced mobile fueling deliveries of
1.1 million gallons during the current period. The Company delivered 11.5
million gallons of fuel to its customers in the three months ended December 31,
2002, a decrease of 3.4% compared to the 11.9 million gallons delivered in the
three months ended December 31, 2001. The decrease in volume in the current
period was primarily due to a greater than normal reduction in deliveries during
the 2002 seasonal holidays; reduced demand by certain customers arising from
depressed economic conditions and modifications in their mobile fueling delivery
programs caused by substantially increased fuel prices; and the elimination of
low margin bulk fuel deliveries and nonprofitable accounts.
GROSS PROFIT
Gross profit decreased approximately $221,000, or 22.9%, in the three
months ended December 31, 2002 compared to the three months ended December 31,
2001. The net margin per delivered gallon of fuel in the three months ended
December 31, 2002 was 9.7 cents compared to 11.1 cents in the three months ended
December 31, 2001. (Net margin is equal to gross profit plus depreciation.) The
decrease in gross profit was due primarily to increases in property and
liability insurance premiums of approximately $90,000; the reduction in service
fees attributable to seasonal holiday deliveries of approximately $127,000; and
lower revenue of approximately $98,000 in connection with the billing
system conversion.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE
Selling, general and administrative expenses increased approximately
$229,000, or 20.0%, in the three months ended December 31, 2002 compared to the
three months ended December 31, 2001. The increase in these expenses resulted
primarily from an additional provision to the reserve for uncollectible accounts
receivable of $104,000; incremental sales and marketing personnel costs of
$49,000; increased group health insurance premiums of $20,000; higher rent
expense of $13,000; additional legal expenses of $20,000 relating to the
collection of the note receivable from a related party; and higher auditing
expenses of $21,000. The additional provision for uncollectible accounts
receivable included $85,000 required to reflect a reserve for accrued and
unbilled revenue in connection with the billing system conversion.
INTEREST EXPENSE
Interest expense decreased approximately $119,000, or 34.3%, in the three
months ended December 31, 2002 compared to the three months ended December 30,
2001. The decrease was primarily due to lower interest rates on variable rate
credit facility debt and a reduction in outstanding long-term equipment debt,
resulting from the repayment of principal.
INCOME TAXES
The Company recorded no income tax expense in the three-month periods
ended December 31, 2002 or December 31, 2001. The Company has significant net
operating loss carryforwards which may be available to offset future taxable
income.
15
EBITDA
Earnings before interest, taxes, depreciation, and amortization ("EBITDA")
of a negative $266,000 decreased approximately $460,000 in the three months
ended December 31, 2002 compared to the three months ended December 31, 2001.
The decrease in EBITDA was primarily due to the decrease in gross profit of
$221,000 and the increase in selling, general and administrative expenses of
$229,000.
Components of EBITDA for the three months ended December 31, 2002 and 2001
are as follows:
December 31, December 31,
2002 2001
------------ ------------
Net loss $ (858,000) $ (515,000)
Add back:
Interest expense 228,000 347,000
Depreciation and amortization expense 364,000 362,000
---------- ----------
EBITDA $ (266,000) $ 194,000
========== ==========
COMPARISON OF SIX MONTHS ENDED DECEMBER 31, 2002 TO SIX MONTHS ENDED DECEMBER
31, 2001
REVENUES
Revenue increased approximately $3.5 million, or 11.3%, for the six months
ended December 31, 2002 compared to the six months ended December 31, 2001. The
increase in revenue resulted primarily from substantially higher wholesale fuel
prices and additional higher priced mobile fueling deliveries of 2.4 million
gallons during the current period. The Company delivered 23.4 million gallons of
fuel to its customers in the six months ended December 31, 2002, a decrease of
14.6% compared to the 27.4 million gallons delivered in the six months ended
December 31, 2001. The decrease in volume in the current period was primarily
due to a greater than normal reduction in deliveries during the 2002 seasonal
holidays; reduced demand by certain customers arising from depressed economic
conditions and modifications in their mobile fueling delivery programs caused by
substantially increased fuel prices; and the elimination of low margin bulk fuel
deliveries and nonprofitable accounts.
GROSS PROFIT
Gross profit increased by $6,000 during the six months ended December 31,
2002 compared to December 31, 2001. Reductions in direct operating expenses,
improved margins on existing accounts and new, higher margin accounts improved
gross profit for the six months ended December 31, 2002. However, the reductions
were largely offset by other costs totaling $315,000. These other costs included
$98,000 attributable to lower revenue related to the new billing system
conversion, $90,000 related to property and liability insurance increases and
$127,000 associated with the loss of certain seasonal holiday business. The net
margin per delivered gallon of fuel in the six months ended December 31, 2002
was 12.2 cents compared to 10.4 cents in the six months ended December 31, 2001.
(Net margin is equal to gross profit plus depreciation.)
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE
Selling, general and administrative expenses increased approximately
$177,000, or 7.8%, in the six months ended December 31, 2002 compared to the six
months ended December 31, 2001. The increases in these expenses were all
attributable to the quarter ended December 31, 2002 and resulted primarily from
an additional provision to the reserve for uncollectible accounts receivable of
$100,000; incremental sales and marketing personnel costs of $119,000;
additional legal expenses of $20,000 relating to the collection of the note
receivable from a related party; and higher auditing expenses of $80,000. These
increases were offset by a decrease in administrative personnel costs of
$121,000. The additional provision for uncollectible accounts receivable
included $85,000 required to reflect a reserve for accrued and unbilled revenue
in connection with the billing system conversion.
16
INTEREST EXPENSE
Interest expense decreased approximately $243,000, or 34.7%, in the six
months ended December 31, 2002 compared to the six months ended December 31,
2001. The decrease was primarily due to lower interest rates on variable rate
credit facility debt and a reduction in outstanding long-term equipment debt,
resulting from the repayment of principal.
INCOME TAXES
The Company recorded no income tax expense in the three-month periods
ended December 31, 2002 or December 31, 2001. The Company has significant net
operating loss carryforwards which may be available to offset future taxable
income.
EBITDA
Earnings before interest, taxes, depreciation, and amortization ("EBITDA")
of $410,000 decreased approximately $200,000 in the six months ended December
31, 2002, compared to $610,000 in the six months ended December 31, 2001. The
decrease in EBITDA was primarily due to the increase in selling, general and
administrative expenses of $177,000.
Components of EBITDA for the six months ended December 31, 2002 and 2001
are as follows:
December 31, December 31,
2002 2001
------------ ------------
Net loss $ (755,000) $ (822,000)
Add back:
Interest expense 457,000 700,000
Depreciation and amortization expense 708,000 732,000
---------- ----------
EBITDA $ 410,000 $ 610,000
========== ==========
17
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's exposure to market risk is limited primarily to the
fluctuating interest rates associated with variable rate debt outstanding to
finance working capital and a portion of the Company's mobile fueling truck
fleet. These debts bear interest at the United States prime interest rate plus a
fixed markup and are subject to change based upon interest rate changes in the
United States. The Company does not currently use, and has not historically
used, derivative instruments to hedge against such market interest rate risk.
Increases or decreases in market interest rates could have a material impact on
the financial condition, results of operations and cash flows of the Company.
ITEM 4. CONTROLS AND PROCEDURES
DISCLOSURE CONTROLS AND PROCEDURES
Within the 90 days prior to the date of this report, the Company carried
out an evaluation, under the supervision and participation of the Company's
Chief Executive Officer and Chief Financial Officer (the "Officers") of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures pursuant to Securities Exchange Act Rule 13a-14. Based upon that
evaluation, the Officers concluded that the Company's disclosure controls and
procedures are effective in timely alerting them to material information
relating to the Company required to be included in the Company's periodic SEC
filings, including this report.
INTERNAL CONTROLS
There were no significant changes made in the Company's internal controls
or in other factors that could significantly affect these controls subsequent to
the date of their evaluation.
18
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
During the three months ending December 31, 2002, the Company issued
3,418 shares of common stock to the holders of four subordinated convertible
promissory notes for interest earned to date at a price of $1.35 per share. The
offer and sale of the convertible subordinated promissory notes, and the
underlying shares of stock into which the notes are convertible or which are
issued as payment of interest, were exempt from registration under the Act as
private offerings to "accredited investors" under Sections 4(2) and 4(6) of the
Act and Rules 505 and 506 of Regulation D thereunder. The Company has agreed to
register the shares into which the notes may be converted for resale by filing a
Form S-3 registration statement with the Securities and Exchange Commission,
which it intends to do sometime after the filing of this Form 10-Q.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The 2002 Annual Meeting of Shareholders of Streicher Mobile Fueling, Inc.
was held at the Sheraton Suites Cypress Creek, 555 NW 62nd Street, Fort
Lauderdale, Florida, on November 21, 2002. At the meeting, the
shareholders elected seven directors to the Company's Board of Directors
to serve until the next Annual Meeting of Shareholders or until their
successors are elected. The votes for or withheld for such directors were
as follows:
NAME FOR WITHHELD
---- --- --------
Wendell R. Beard 6,224,759 48,168
Richard E. Gathright 6,224,759 48,168
Sherrill W. Hudson 6,224,759 48,168
Larry S. Mulkey 6,224,759 48,168
C. Rodney O'Connor 6,224,759 48,168
Robert S. Picow 6,224,759 48,168
W. Greg Ryberg 6,224,759 48,168
Abstentions and broker non-votes were counted for purposes of establishing
a quorum only. Only those votes cast for the election of directors were
counted as voted in favor or affirmative votes.
ITEM 5. OTHER INFORMATION
None.
19
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
Exhibit No. Description
----------- -----------
99.1 Certification of the President and Chief Executive
Officer, and the Senior Vice President and Chief
Financial Officer
(B) REPORTS ON FORM 8-K
(1) The Company filed a Form 8-K dated October 1, 2002 to
report, under Item 5, Other Events, the closing of a new
long-term credit facility with Congress Financial
Corporation, a subsidiary of Wachovia Corporation; and to
report the results for the fourth quarter ended June 30,
2002; and
(2) The Company filed a Form 8-K dated October 31, 2002 to
report, under Item 5, Other Events, the extension of the
Warrant exercise period for its Redeemable Common Share
Purchase Warrants from December 11, 2002 to December 11,
2003.
20
SIGNATURES
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 hereunto duly authorized.
STREICHER MOBILE FUELING, INC.
February 14, 2003 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
21
CERTIFICATIONS
I, Richard E. Gathright, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Streicher Mobile
Fueling, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: February 14, 2003
/S/ RICHARD E. GATHRIGHT
- -------------------------------------
Richard E. Gathright
President and Chief Executive Officer
22
I, Michael S. Shore, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Streicher Mobile
Fueling, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: February 14, 2003
/S/ MICHAEL S. SHORE
- -------------------------------------------------
Michael S. Shore
Senior Vice President and Chief Financial Officer
23