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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For quarter ended September 30, 2002 Commission file number 1-467
------------------
WILSHIRE OIL COMPANY OF TEXAS
------------------------------------------------------
(Exact name of registrants as specified in its charter)
Delaware 84-0513668
- -------------------------------- --------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
921 Bergen Avenue - Jersey City, New Jersey 07306-4204
- -------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number - including area code (201) 420-2796
NO CHANGE
---------------------------------------------------
Former name, former address and former fiscal year,
if changed since last reports.
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 the number of shares outstanding of each of the issuer's classes
of common stock, as of the close of the period by this report.
Common Stock $1 Par Value -- 7,814,834
WILSHIRE OIL COMPANY OF TEXAS
INDEX
Page No.
--------
Part I Financial Information
Financial Information: 1
Condensed Consolidated Balance Sheets -
September 30, 2002 (Unaudited) and December 31, 2001
Condensed Consolidated Statements of Income - Unaudited 2
Three months ended September 30, 2002 and 2001
Condensed Consolidated Statements of Income - Unaudited 3
Nine months ended September 30, 2002 and 2001.
Condensed Consolidated Statements of Cash Flows - Unaudited 4
Nine months ended September 30, 2002 and 2001.
Notes to Condensed Consolidated Financial Statements 5
Management's Discussion and Analysis 9
of Financial Condition and Results of Operations
Part II Other Information 12
WILSHIRE OIL COMPANY OF TEXAS AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(000's Omitted, Except Share Data)
September 30,
(Unaudited) December 31,
2002 2001
------------ -----------
ASSETS
CURRENT ASSETS
Cash and cash equivalents ..................................... $ 2,580 $ 4,984
Marketable securities, available-for-sale, at fair value ...... 9,453 10,358
Accounts receivable ........................................... 1,337 832
Income tax receivable ......................................... 480 --
Prepaid expenses and other current assets ..................... 1,402 1,215
-------- --------
Total current assets ......................................... 15,252 17,389
-------- --------
NONCURRENT ASSETS
Mortgage notes receivable ..................................... 3,516 6,072
Other noncurrent assets ....................................... 337 500
PROPERTY AND EQUIPMENT
Oil and gas properties, using full cost method of accounting .. 137,803 136,355
Real estate properties ........................................ 70,129 69,161
Other property and equipment .................................. 377 394
-------- --------
208,309 205,910
Less - Accumulated depreciation, depletion and amortization ... 125,237 121,968
-------- --------
83,072 83,942
-------- --------
Total assets .................................................. $102,177 $107,903
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt ............................. $ 2,684 $ 7,287
Loan payable to shareholder ................................... 500 700
Accounts payable .............................................. 1,956 2,301
Income taxes payable .......................................... 60 50
Deferred income ............................................... 250
Deferred income taxes ......................................... 717 896
Accrued liabilities ........................................... 688 1,028
-------- --------
Total current liabilities .................................... 6,855 12,262
-------- --------
Long - term debt, less current portion ........................ 58,750 60,661
Deferred income taxes ......................................... 11,523 11,256
Deferred income ............................................... 1,101 --
Other ......................................................... 32 31
-------- --------
Total liabilities ............................................. 1,133 31
-------- --------
SHAREHOLDERS' EQUITY
Preferred stock, $1 par value, 1,000,000 shares authorized;
None issued and outstanding in 2002 and 2001 .................. -- --
Common stock, $1 par value, 15,000,000 shares authorized;
Issued 10,013,544 shares in 2002 and 2001 ..................... 10,014 10,014
Capital in excess of par value ................................ 9,029 9,029
Treasury stock, 2,198,710 and 2,132,656 shares at September 30,
2002 and December 31, 2001, respectively, at cost ............. (10,338) (10,179)
Retained earnings ............................................. 18,130 17,564
Accumulated other comprehensive loss .......................... (2,919) (2,735)
-------- --------
23,916 23,693
-------- --------
Total liabilities & shareholders' equity ...................... $102,177 $107,903
======== ========
For purposes of comparison, certain items shown in the 2001 financial statements
have been reclassified to conform with the presentation used for 2002.
The accompanying notes are an integral part of these condensed consolidated
financial statements.
1
WILSHIRE OIL COMPANY OF TEXAS AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(000's Omitted, Except Per Share Data)
FOR THE THREE MONTHS ENDED
-----------------------------
September 30, September 30,
2002 2001
------------- -------------
REVENUES
Oil & gas ........................................ $ 1,599 $ 1,601
Real estate ...................................... 3,695 3,617
------- -------
Total Revenues .................................. 5,294 5,218
------- -------
COSTS AND EXPENSES
Oil and gas production expenses .................. 649 860
Real estate operating expenses ................... 2,274 2,140
Depreciation, depletion and amortization ......... 1,198 1,226
General and administrative ....................... 517 547
------- -------
Total costs and expenses ........................ 4,638 4,773
------- -------
Income from Operations .......................... 656 445
Gain on sale of land and other real estate ....... 85 1,420
Dividend and interest income ..................... 335 282
Other income(loss) ............................... 122 (8)
------- -------
542 1,694
------- -------
INTEREST EXPENSE ................................. (1,122) (1,286)
------- -------
Income before provision for income taxes ......... 76 853
Provision for income taxes ....................... 7 312
------- -------
Net Income ...................................... $ 69 $ 541
======= =======
BASIC AND DILUTED EARNINGS PER SHARE ............. $ 0.01 $ 0.07
======= =======
For purposes of comparison, certain items shown in the 2001 financial statements
have been reclassified to conform with the presentation used for 2002.
The accompanying notes are an integral part of these condensed consolidated
financial statements.
2
WILSHIRE OIL COMPANY OF TEXAS AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(000's Omitted Except Per Share Data)
FOR THE NINE MONTHS ENDED
-------------------------------
September 30, September 30,
2002 2001
------------- -------------
REVENUES
Oil & gas ...................................... $ 4,166 $ 7,416
Real estate .................................... 10,989 10,445
-------- --------
Total Revenues ................................ 15,155 17,861
-------- --------
COSTS AND EXPENSES
Oil and gas production expenses ................ 1,801 2,283
Real estate operating expenses ................. 6,498 6,311
Depreciation, depletion and amortization ....... 3,305 3,056
General and administrative ..................... 1,465 1,072
-------- --------
Total costs and expenses ...................... 13,069 12,722
-------- --------
Income from Operations ........................ 2,086 5,139
Gain on sale of land and other real estate ..... 253 1,420
Dividend and interest income ................... 727 548
Other income ................................... 1,107 86
-------- --------
2,087 2,054
-------- --------
INTEREST EXPENSE ............................... (3,440) (3,702)
-------- --------
Income before provision for income taxes ....... 733 3,491
Provision for income taxes ..................... 167 1,146
-------- --------
Net Income .................................... $ 566 $ 2,345
======== ========
BASIC AND DILUTED EARNINGS PER SHARE ........... $ 0.07 $ .30
======== ========
For purposes of comparison, certain items shown in the 2001 financial statements
have been reclassified to conform with the presentation used for 2002.
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
WILSHIRE OIL COMPANY OF TEXAS AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(000's Omitted)
For The Nine Months Ended
------------------------------
September 30, September 30,
2002 2001
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income ......................................................... $ 566 $ 2,345
Adjustments to reconcile net income to net
cash provided by operating activities -
Depreciation, depletion and amortization ........................... 3,305 3,056
Gain on sale of marketable securities .............................. (482) -
Gain on sales of real estate assets ................................ (253) (1,420)
Deferred income tax provision (benefit) ............................ 267 (1,766)
Changes in operating assets and liabilities -
Receivables ........................................................ (985) 751
Prepaid expenses and other current assets .......................... (187) 1,138
Accounts payable, accrued and other liabilities .................... (425) 1,161
Other .............................................................. 163 -
------ --------
Net cash provided by operating activities .......................... 1,969 5,265
------ --------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from reduction (issuance) of mortgage notes receivable .... 2,556 (3,290)
Capital expenditures, net .......................................... (2,883) (7,616)
Purchases of marketable securities ................................. (1,340) -
Proceeds from sales and redemptions of securities .................. 2,329 -
Increase in deferred income ........................................ 1,101 -
Proceeds from sales of real estate properties ...................... 737 3,650
------ --------
Net cash provided by (used in) investing activities ................ 2,500 (7,256)
------ --------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payment of long term debt ................................ 10,869) (4,007)
(Decrease) increase in loan payable to shareholder ................. (200) 300
Proceeds from issuance of long term debt ........................... 4,080 7,470
Purchase of treasury stock ......................................... (159) (295)
Other .............................................................. 310 (318)
------ --------
Net cash (used in) provided by financing activities ................ (6,838) 3,150
------ --------
EFFECT OF EXCHANGE RATE CHANGES ON CASH ............................. (35) (153)
------ --------
Net (decrease) increase in cash and cash equivalents ............... (2,404) 1,006
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD ................................................ 4,984 2,925
------ --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD ...................................................... $2,580 $ 3,931
====== ========
SUPPLEMENTAL DISCLOSURES TO THE
STATEMENTS OF CASH FLOWS:
Cash paid during the period for -
Interest ........................................................... $3,441 $ 3,686
Income taxes ....................................................... $ 322 $ 254
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
WILSHIRE OIL COMPANY OF TEXAS
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2002
1. FINANCIAL STATEMENTS
The unaudited condensed consolidated financial statements included herein
have been prepared by the Registrant, without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally
accepted in the United States have been condensed or omitted pursuant to
such rules and regulations, although the Registrant believes that the
disclosures are adequate to make the information presented not misleading.
It is suggested that these unaudited condensed consolidated financial
statements be read in conjunction with the financial statements and the
notes thereto included in the Company's latest annual report on Form
10-K/A. This condensed financial information reflects, in the opinion of
management, all adjustments necessary to present fairly the results for
the interim periods. In connection with the preparation of the interim
financial statements, the Company estimates oil and gas operations for the
month of September based on prior months actual results and specific
significant transactions which may have occurred during the month. In the
opinion of management these estimated results approximate actual. The
results of operations for such interim periods are not necessarily
indicative of the results for the full year.
Recently Issued Pronouncements
In October 2001, the FASB issued Statement of Financial Accounting Standard
("SFAS") No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets", which addresses financial accounting and reporting for the
impairment or disposal of long-lived assets. This standard harmonizes the
accounting for impaired assets and resolves some of the implementation
issues as originally described in SFAS 121. The new standard became
effective and was adopted by the Company on January 1, 2002. The adoption
of this pronouncement did not have a material impact on the Company's
results of operations or financial position.
In May 2002, the FASB issued SFAS No. 145, "Reporting Gains and Losses from
Extinguishment of Debt", which rescinded SFAS No. 4, No.44 and No. 64 and
amended SFAS No. 13. The new standard addresses the income statement
classification of gains or losses from the extinguishment of debt and
criteria for classification as extraordinary items. The adoption of this
pronouncement did not have a material impact on the Company's results of
operations or financial position.
2. DESCRIPTION OF BUSINESS:
Wilshire Oil Company of Texas (the Company) is a diversified corporation
engaged in oil and gas exploration and production and real estate
operations. The Company's oil and gas operations are conducted both in its
own name and through several wholly-owned subsidiaries in the United
States and Canada. Crude oil and natural gas productions are sold to oil
refineries and natural gas pipeline companies. The Company's real estate
holdings are located in the states of Arizona, Florida, New Jersey, Texas
and Georgia. The Company also maintains investments in marketable
securities.
3. SEGMENT INFORMATION
The Company is engaged in the exploration and development of oil and gas,
both in its own name and through several wholly-owned subsidiaries, on the
North American continent. The Company also conducts real estate operations
throughout the United States.
Oil and Gas
The Company conducts its oil and gas operations in the United States and
Canada. Oil and gas operations in the United States are located in
Arkansas, California, Kansas, Nebraska, New Mexico, Ohio, Oklahoma,
Pennsylvania, Texas and Wyoming. In Canada, the Company conducts oil and
gas operations in the Provinces of Alberta, British Columbia and
Saskatchewan.
Real Estate
The Company's real estate operations are conducted in the states of
Arizona, Texas, Florida, Georgia and New Jersey. The Company's properties
consists of apartment complexes as well as commercial and retail
properties.
Corporate
The Company holds investments in certain marketable securities, which are
classified as held for sale. From time to time, the Company buys and sells
securities in the open market. Over the years, the Company has decreased
its holding in marketable securities and focused its resources in the oil
and gas and real estate divisions.
5
The following segment data is presented based on the Company's internal
management reporting system-
FOR THE NINE MONTHS
ENDED SEPTEMBER 30
---------------------
(000's Omitted)
2002 2001
-------- --------
Revenues
Oil and gas - United States ................... $ 2,667 $ 4,073
Oil and gas - Canada .......................... 1,499 3,343
Real estate ................................... 10,989 10,445
-------- --------
$ 15,155 $ 17,861
-------- --------
Income (loss) from operations and reconciliation
to income before provision for income taxes
Oil and gas - United States (a) ............... $ (755) $ 824
Oil and gas - Canada (a) ...................... 706 2,331
Real estate (a) ............................... 2,729 2,472
Corporate ..................................... (594) (488)
-------- --------
Income from operations ........................ 2,086 5,139
Other income ................................... 2,087 2,054
Interest expense ............................... (3,440) (3,702)
-------- --------
Income from operations before provision
for income taxes .............................. $ 733 $ 3,491
-------- --------
Identifiable assets
Oil and gas - United States ................... $ 18,172 $ 15,236
Oil and gas - Canada .......................... 14,147 14,230
Real estate ................................... 58,248 57,553
Corporate ..................................... 11,610 19,618
-------- --------
$102,177 $106,637
-------- --------
(a) Represents revenues less all operating costs, including depreciation,
depletion and amortization.
6
The following segment data is presented based on the Company's internal
management reporting system-
FOR THE THREE MONTHS
ENDED SEPTEMBER 30
-------------------
000's Omitted
2002 2001
------- -------
Revenues
Oil and gas - United States ................... $ 1,036 $ 888
Oil and gas - Canada .......................... 563 713
Real estate ................................... 3,695 3,617
------- -------
$ 5,294 $ 5,218
------- -------
Income (loss) from operations and reconciliation
to income before provision for income taxes
Oil and gas - United States (a) ............... $ (373) $ (381)
Oil and gas - Canada (a) ...................... 258 229
Real estate (a) ............................... 834 915
Corporate ..................................... (63) (318)
------- -------
Income from operations ........................ 656 445
Other income ................................... 542 1,694
Interest expense .............................. (1,122) (1,286)
------- -------
Income from operations before provision
for income taxes ............................. $ 76 $ 853
------- -------
(a) Represents revenues less all operating costs, including depreciation,
depletion and amortization.
7
4. COMPREHENSIVE INCOME
Comprehensive income for the nine months ended September 30, 2002 and 2001
is as follows:
2002 2001
-------- ----------
Net income ................................................... $566,000 $2,345,000
-------- ----------
Other comprehensive income (loss), net of taxes
Foreign currency translation adjustments .................... 498,000 (471,000)
Change in unrealized (loss) gain on marketable securities ... (682,000) 1,903,000
-------- ----------
Other comprehensive (loss) income ............................ (184,000) 1,432,000
-------- ----------
Comprehensive income ......................................... $382,000 $3,777,000
======== ==========
Changes in the components of Accumulated Other Comprehensive Income (Loss)
for the year 2001 and for the Nine months ended September 30, 2002 are as
follows-
Unrealized Gains Cumulative Accumulated
(Losses) on Foreign Currency Other
Available-for Sale Translation Comprehensive
Securities Adjustment Income (Loss)
------------------ ---------------- -------------
BALANCE, December 31, 2000 ......... $(1,585,000) $(3,292,000) $(4,877,000)
Change for the year 2001 .......... 2,680,000 (538,000) 2,142,000
BALANCE, December 31, 2001 ......... 1,095,000 (3,830,000) (2,735,000)
Change for the nine months ........ 498,000 (682,000) (184,000)
BALANCE, September 30, 2002 ........ $ 1,593,000 $(4,512,000) $(2,919,000)
5. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted
earnings per share-
Nine Months Ended Three Months Ended
September 30, September 30
----------------------- ----------------------
2002 2001 2002 2001
Numerator-
Net income ................... $ 566,000 $2,345,000 $ 69,000 $ 541,000
========== ========== ========== ==========
Denominator-
Weighted average common shares
outstanding - Basic ......... 7,838,987 7,925,886 7,818,281 7,892,731
Incremental shares from assumed
conversions of stock
options ...................... 3,987 -- 10,425 --
---------- ---------- ---------- ----------
Weighted average common shares
outstanding - Diluted ........ 7,842,974 7,925,886 7,828,706 7,892,731
========== ========== ========== ==========
Basic earnings per share ...... $ 0.07 $ 0.30 $ 0.01 $ 0.07
Diluted earnings per share .... $ 0.07 $ 0.30 $ 0.01 $ 0.07
6. COMMITMENTS AND CONTINGENCIES
The Canadian subsidiary of the Company was advised of a pollution problem by an
operator of a well where the Company has a joint interest. The amount of
potential liability that the initial claim listed was covered by the Company's
pollution policy. Recently, the Company has become aware of a larger liability
from this event. The Company has denied any liability for the incident, as it
was not the operator of the well, and has received advice from legal counsel
that it should not bear any liability from the incident.
8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Net income for the three months ended September 30, 2002 was $69,000
compared to $541,000 for the same period in 2001. Income from operations
increased to $656,000 in 2002 from $445,000 in 2001. For the three months, the
improvement in operating income is the result of an increase in the average
price of gas and lower oil and gas production expenses in 2002 from reduced
production. Gain from the sale of land and other real estate assets decreased to
$85,000 in 2002 compared to $1,420,000 in 2001. The gain in 2001 is attributable
to the sale of two properties in July 2001.
Net income for the nine months ended September 30 was $566,000 in 2002 as
compared to $2,345,000 in 2001. Income from operations was $2,086,000 in 2002
compared to $5,139,000 in 2001. Consolidated revenues for Wilshire's nine months
ended September 30 decreased to $15,155,000 in 2002 from $17,861,000 in 2001.
Oil and gas revenues decreased by $3,250,000 due to a reduction in average
gas prices for the nine months of 2002 as compared to the same period for 2001
and a reduction in production for comparative periods. The average price for gas
received by the Company for the first nine months of 2002 was $2.48 per MCF vs.
$3.08 per MFC in 2001, a 20% decrease. The average price of oil that the Company
received was similar for both periods $22.25 per BBL in 2002 and $22.00 per BBL
in 2001. While oil production declined in 2002 compared to 2001, gas production
was approximately the same. Total Costs and Expenses increased by $347,000 for
the nine month period ended September 30, 2002, a 3% increase over 2001. Oil and
Gas Production expense decreased by $482,000 between 2001 and 2002 due to lower
production. Depreciation, Depletion and Amortization expense for 2002 increased
$249,000, or 8% over 2001 mainly as a result of increased depletion charges for
2002 due to the low oil and gas prices at December 31, 2001. General and
Administrative expenses for 2002 increased $393,000 over 2001 due to higher
legal, accounting, salary and insurance expenses.
Real estate revenue increased to $10,989,000 in 2002 from $10,445,000 in
2001 and operating expenses increased from $6,311,000 in 2001 to $6,498,000 in
2002. These increases are primarily due to the purchase of a 180-unit apartment
complex in San Antonio, Texas on March 29, 2001 and additional rents realized on
commercial properties from improved occupancy. Gains from the sale of land and
other real estate decreased from $1,420,000 in 2001 to $253,000 in 2001.
Dividend and interest income increased from $548,000 in 2001 to $727,000 in 2002
due to interest earned with respect to a property under contract to be sold.
Other income increased to $1,107,000 in 2002 from $86,000 in 2001. This increase
is mainly attributed to the gain on sale of marketable securities and the
recognition of deferred income that increased to $482,000 and $417,000 in 2002,
respectively, from $0 in 2001.
Interest expense decreased $262,000 in 2002, due to a reduction in long
and short-term debt in 2002.
The Canadian subsidiary of the Company was advised of a pollution problem
by an operator of a well where the Company has a joint interest. The amount of
potential liability that the initial claim listed was covered by the Company's
pollution policy. Recently, the Company has become aware of a larger liability
from this event. The Company has denied any liability for the incident, as it
was not the operator of the well, and has received advice from legal counsel
that it should not bear any liability from the incident.
9
Liquidity and Capital Resources
At September 30, 2002 the Company had approximately $9,453,000 in
marketable securities at market value. The current ratio at September 30, 2002
was 2.2 to 1, which management considers adequate. On September 30, 2002 the
Company had $2,684,000 in short term debt, compared to $7,287,000 on December
31, 2001.
The Company anticipates that cash provided by operating and investing
activities will be sufficient to meet its normal capital requirements to acquire
oil and gas properties and to drill and evaluate these and other oil and gas
properties held by the Company. The major gas drilling program announced by the
Company for its Canadian subsidiary has been financed by a borrowing the Company
has arranged with a Canadian bank. The Company anticipates that this funding
requirement will be approximately $7,200,000 Canadian (approximately $4,700,000
U.S.).
The Company plans to actively continue its exploration and production
activities as well as search for the acquisition of oil and gas producing
properties and companies with desirable oil and gas producing properties. There
can be no assurance that the Company will in fact locate any such acquisitions.
The Company will also explore real estate acquisitions. The timing of any
such acquisition will depend on, among other things, economic conditions and the
favorable evaluation of specific opportunities presented to the Company. The
Company is currently planning further acquisitions of investment properties
during the next year. While the Company anticipates that it will actively
explore these and other real estate acquisition opportunities, no assurance can
be given that any such acquisition will occur.
Net cash provided by operating activities was $1,969,000 in 2002 and
$5,265,000 in 2001. The decrease in 2002 was primarily due to lower income and
an increase in accounts receivable and a decrease in accounts payable and
accrued and other liabilities.
Net cash provided by (used in) investing activities was $2,500,000 in 2002
and $(7,256,000) in 2001. The variations were due to lower capital expenditures
in the first nine months of 2002 compared to the same period in 2001. In 2001,
the Company acquired a 180 unit apartment complex in San Antonio, Texas. In
2002, the Company collected $2,556,000 of its mortgage notes receivable as
compared to the issuance of $3,290,000 in 2001. The Company also received
$2,329,000 from the sale of marketable securities, while purchasing $1,340,000
in marketable securities. In addition, the proceeds from the sale of real estate
properties were approximately $2,913,000 less for the first nine months of 2002,
compared to the same period in 2001.
Net cash (used in) provided by financing activities was $(6,838,000) in
2002 and $3,150,000 in 2001. The variation principally relates to the issuance
of long-term debt in connection with real estate properties during the
respective nine month periods as well as principal payments of long-term debt.
In addition, the Company acquired approximately $159,000 of treasury stock in
2002.
The Company believes it has adequate capital resources to fund operations
for the foreseeable future.
10
Forward-Looking Statements
This Report on Form 10-Q for the quarter ended September 30, 2002 contains
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. All statements included herein other than
statements of historical fact are forward-looking statements. Although the
Company believes that the underlying assumptions and expectations reflected in
such forward-looking statements are reasonable, it can give no assurance that
such expectations will prove to be correct. The Company's business and prospects
are subject to a number of risks which could cause actual results to differ
materially from those reflected in such forward-looking statements, including
volatility of oil & gas prices, the need to develop and replace reserves, risks
involved in exploration and drilling, uncertainties about estimates of reserves,
environmental risks relating to the Company's oil & gas and real estate
properties, competition, the substantial capital expenditures required to fund
the Company's oil & gas and real estate operations, market and economic changes
in areas where the Company holds real estate properties, interest rate
fluctuations, government regulation, and the ability of the Company to implement
its business strategy.
Item 4- Controls and Procedures
Within the 90 days prior to the date of this report, the Corporation
carried out an evaluation, under the supervision and with the participation of
the Corporation's management, including the Corporation's Chief Executive
Officer and Chief Financial Officer, of the effectiveness of the design and
operation of the Corporation's disclosure controls and procedures pursuant to
Securities Exchange Act Rule 13a-14. Based upon that evaluation, the
Corporation's Chief Executive Officer and Chief Financial Officer concluded that
the Corporation's disclosure controls and procedures are effective in timely
alerting them to material information relating to the Corporation (including its
consolidated subsidiaries) required to be included in the Corporation's periodic
SEC filings. There have been no significant changes in the Corporation's
internal controls or in other factors that could significantly affect internal
controls subsequent to the date of their evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
11
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K
The Company has filed the following Form 8-K's for the quarter ended
September 30, 2002.
Date of Report
(Date of Earliest Event) Filing Dates Subject
- ----------------------- ------------ -------
July 19, 2002 August 8, 2002 Item 4 - Change in Registrant's Certifying Accountant
Item 5 - Other Events and Regulation FD Disclosure
Item 7 - Financial Statements and Exhibits
August 30, 2002 September 4, 2002 Item 5 - Other Events and Regulation FD Disclosure
Item 7 - Financial Statements and Exhibits
September 6, 2002 September 9, 2002 Item 5 - Other Events and regulation FD Disclosure
12
S I G N A T U R E S
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.
WILSHIRE OIL COMPANY OF TEXAS
-----------------------------
(Registrant)
Date: November 14, 2002 /s/ S. WILZIG IZAK
------------------------------
By: S. Wilzig Izak
Chairman of the Board and Chief Executive Officer
/s/ PHILIP G. KUPPERMAN
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By: Philip G. Kupperman
President and Chief Financial Officer
I, S. Wilzig Izak, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Wilshire Oil Company of
Texas;
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: November 14, 2002
/s/ S. WILZIG IZAK
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S. Wilzig Izak
President and Chief Executive Officer
I, Philip Kupperman, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Wilshire Oil Company of
Texas;
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: November 14, 2002
/s/ PHILIP KUPPERMAN
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Philip Kupperman
Chief Financial Officer