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, 2008
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to.
Commission file number 1-9030
ALTEX INDUSTRIES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 84-0989164
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
PO Box 1057 Breckenridge CO 80424-1057
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(Address of principal executive offices)
(303) 265-9312
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(Registrant'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 a large accelerated filer,
an accelerated filer, a non-accelerated filer, or a small reporting company.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes [X] No [ ]
Number of shares outstanding of issuer's Common Stock as
of February 10, 2009: 13,885,734
Page 1 of 7
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ALTEX INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
ASSETS
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DECEMBER 31 SEPTEMBER 30
2008 2008
(UNAUDITED) (AUDITED)
CURRENT ASSETS
Cash and cash equivalents $ 4,219,000 $ 4,291,000
Accounts receivable 10,000 6,000
Other 3,000 7,000
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Total current assets 4,232,000 4,304,000
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PROPERTY AND EQUIPMENT, AT COST
Proved oil and gas properties (successful efforts method) 91,000 91,000
Other 38,000 38,000
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129,000 129,000
Less accumulated depreciation, depletion, amortization, and valuation allowance (124,000) (123,000)
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Net property and equipment 5,000 6,000
OTHER ASSETS 7,000 7,000
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$ 4,244,000 $ 4,317,000
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LIABILITIES AND STOCKHOLDERS' EQUITY
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CURRENT LIABILITIES
Accounts payable $ 34,000 $ 23,000
Other accrued expenses 33,000 37,000
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Total current liabilities 67,000 60,000
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STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value. Authorized 5,000,000 shares, none issued -- --
Common stock, $.01 par value. Authorized 50,000,000 shares, issued 13,953,901 shares 140,000 140,000
Additional paid-in capital 13,974,000 13,974,000
Accumulated deficit (9,926,000) (9,857,000)
Treasury shares, at cost, 68,167 shares at December 31, 2008 (11,000) --
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4,177,000 4,257,000
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$ 4,244,000 $ 4,317,000
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See accompanying notes to consolidated, condensed financial statements.
Page 2 of 7
ALTEX INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED
DECEMBER 31
2008 2007
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Revenue
Oil and gas sales $ 16,000 $ 5,000
Interest income 22,000 47,000
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38,000 52,000
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Costs and expenses
Lease operating 1,000 -
Production taxes 1,000 -
General and administrative 104,000 105,000
Depreciation, depletion, amortization, and valuation allowance 1,000 1,000
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107,000 106,000
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Net loss $ (69,000) $ (54,000)
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Loss per share $ (0.005) $ (0.004)
==========================
Weighted average shares outstanding 13,928,709 14,242,897
==========================
See accompanying notes to consolidated, condensed financial statements.
Page 3 of 7
ALTEX INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOW
(UNAUDITED)
THREE MONTHS ENDED
DECEMBER 31
2008 2007
--------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (69,000) $ (54,000)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation, depletion, amortization, and valuation allowance 1,000 1,000
Increase in accounts receivable (4,000) (1,000)
Decrease in other current assets 4,000 3,000
Increase in accounts payable 11,000 1,000
Decrease in accrued production costs (1,000) -
Decrease in other accrued expenses (3,000) (8,000)
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Net cash used in operating activities (61,000) (58,000)
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CASH FLOWS FROM INVESTING ACTIVITIES
Other additions to property and equipment - (2,000)
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Net cash used in investing activities - (2,000)
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CASH FLOWS FROM FINANCING ACTIVITIES
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Acquisition of treasury stock (11,000) (16,000)
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Net cash used in financing activities (11,000) (16,000)
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NET DECREASE IN CASH AND CASH EQUIVALENTS (72,000) (76,000)
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CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 4,291,000 4,597,000
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 4,219,000 $ 4,521,000
==========================
See accompanying notes to consolidated, condensed financial statements.
Page 4 of 7
ALTEX INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED, CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - FINANCIAL STATEMENTS. In the opinion of management, the accompanying
unaudited, consolidated, condensed financial statements contain all adjustments
necessary to present fairly the financial position of the Company as of December
31, 2008, and the cash flows and results of operations for the three months then
ended. Such adjustments consisted only of normal recurring items. The results of
operations for the three months ended December 31 are not necessarily indicative
of the results for the full year. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. The accounting
policies followed by the Company are set forth in Note 1 to the Company's
consolidated financial statements contained in the Company's 2008 Annual Report
on Form 10-KSB, and it is suggested that these consolidated, condensed financial
statements be read in conjunction therewith.
"SAFE HARBOR" STATEMENT UNDER THEUNITED STATES PRIVATE SECURITIES LITIGATION
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REFORM ACT OF 1995
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Statements that are not historical facts contained in this Form 10-Q are
forward-looking statements that involve risks and uncertainties that could cause
actual results to differ from projected results. Factors that could cause
actualresults to differ materially include, among others: general economic
conditions; movements in interest rates; the market price of oil and natural
gas; the risks associated with exploration and production in the Rocky Mountain
region; the Company's ability, or the ability of its operating subsidiary, Altex
Oil Corporation ("AOC"), to find, acquire, market, develop, and produce new
properties; operating hazards attendant to the oil and natural gas business;
uncertainties in the estimation of proved reserves and in the projection of
future rates of production and timing of development expenditures; the strength
and financial resources of the Company's competitors; the Company's ability and
AOC's ability to find and retain skilled personnel; climatic conditions;
availability and cost of material and equipment; delays in anticipated start-up
dates; environmental risks; the results of financing efforts; and other
uncertainties detailed elsewhere herein and in the Company's filings with the
Securities and Exchange Commission.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION.
FINANCIAL CONDITION
Cash balances declined $72,000 in the three months ended December 31, 2008
("Q1FY09"), because the Company used $61,000 cash in operating activities and
acquired 68,167 shares of its Common Stock for $11,000. The Company is likely to
experience negative cash flow from operations unless and until the Company
invests in interests in producing oil and gas wells or in another venture that
produces cash flow from operations. With the exception of capital expenditures
related to production acquisitions or drilling or recompletion activities or an
investment in another venture that produces cash flow from operations, none of
which are currently planned, the cash flows that could result from such
acquisitions, activities, or investments, and the possibility of a change in the
interest rates the Company realizes on cash balances, the Company knows of no
other trends or any known demands, commitments, events or uncertainties that
will result in or that are reasonably likely to result in the Company's
liquidity increasing or decreasing in any material way. Except for cash
generated by the operation of the Company's producing oil and gas properties,
asset sales, and interest income, the Company has no internal or external
sources of liquidity other than its working capital. At February 10, 2009, the
Company had no material commitments for capital expenditures. The Company
regularly assesses its exposure to both environmental liability and reclamation,
restoration, and dismantlement expense ("RR&D"). The Company does not believe
that it currently has any material exposure to environmental liability or to
RR&D, net of salvage value, although this cannot be assured.
Page 5 of 7
RESULTS OF OPERATIONS
Interest income decreased from $47,000 in the three months ended December 31,
2007 ("Q1FY08"), to $22,000 in Q1FY09 because of lower interest rates and lower
cash balances. At the current level of cash balances and at current interest
rates, the Company's revenue is unlikely to exceed its expenses. Unless and
until the Company invests a substantial portion of its cash balances in
interests in producing oil and gas wells or in one or more other ventures that
produce revenue and net income, the Company is likely to experience net losses.
With the exception of unanticipated RR&D, unanticipated environmental expense,
and possible changes in interest rates, the Company is not aware of any other
known trends or uncertainties that have had or that the Company reasonably
expects will have a material favorable or unfavorable impact on net sales or
revenues or income from continuing operations.
LIQUIDITY AND CAPITAL RESOURCES
Operating Activities. Included in net cash used in operating activities in
Q1FY09 is an increase in accounts payable of $11,000. Excluding this item, net
cash used in operating activities in Q1FY09 was $72,000 compared to net cash
used in operating activities in Q1FY08 of $58,000.
Investing Activities. In Q1FY08 the Company expended $2,000 on information
technology.
Financing Activities. In Q1FY09 the Company acquired 68,167 shares of its Common
Stock for $11,000. In Q1FY08 the Company acquired 67,307 shares of its Common
Stock for $16,000.
ITEM 4T. CONTROLS AND PROCEDURES.
The Company maintains disclosure controls and procedures that are designed to
ensure that information required to be disclosed in the Company's Exchange Act
reports is recorded, processed, summarized, and reported within the time periods
specified in the SEC's rules and forms, and that such information is accumulated
and communicated to the Company's management, including its Principal Executive
Officer and Principal Financial Officer as appropriate, to allow timely
decisions regarding required disclosure. Management necessarily applied its
judgment in assessing the costs and benefits of such controls and procedures
which, by their nature, can provide only reasonable assurance regarding
management's control objectives. As of the end of the period covered by the
report, the Company carried out an evaluation, under the supervision and with
the participation of the Company's management, including the Company's Principal
Executive Officer and Principal Financial Officer, of the effectiveness of the
design and operation of the Company's disclosure controls and procedures
pursuant to Exchange Act Rule 13a-14. Based upon the foregoing, the Company's
Principal Executive Officer and Principal Financial Officer concluded that the
Company's disclosure controls and procedures are effective in timely alerting
them to material information relating to the Company (including its consolidated
subsidiary) required to be included in the Company's Exchange Act reports. There
have been no significant changes in the Company's internal controls or in other
factors that could significantly affect internal controls subsequent to the date
the Company carried out its evaluation.
Page 6 of 7
PART II - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES
Issuer Purchases of Equity Securities
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Period (a) (b) (c) (d)
Total number Average Total number Maximum number
of shares (or price paid of shares (or (or approximate
units) per share units) purchased dollar value) of
purchased (or unit) as part of shares (or units)
publicly that may yet be
announced plans purchased under
or programs the plans or
programs
------------------------------------- -------------- ------------ ----------------- -----------------
October 1, 2008
through - - - -
October 31, 2008
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November 1, 2008
through 68,167 $ 0.16 - -
November 30, 2008
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December 1, 2008
through - - - -
December 31, 2008
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The Company has no publicly announced plan or program for the purchase of
shares. In November 2008 the Company purchased 68,167 shares other than through
a publicly announced plan or program in open-market transactions.
ITEM 6. EXHIBITS
31. Rule 13a-14(a)/15d-14(a) Certifications
32. Section 1350 Certifications
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 thereunto duly authorized.
ALTEX INDUSTRIES, INC.
Date: February 10, 2009 By: /s/ STEVEN H. CARDIN
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Steven H. Cardin
Chief Executive Officer and
PrincipalFinancial Officer
Page 7 of 7
EXHIBIT INDEX
31. Rule 13a-14(a)/15d-14(a) Certifications
32. Section 1350 Certifications