FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1995
Commission File No. 0-9392
CLX ENERGY, INC.
(Exact name of registrant as specified in its charter)
CO 84-0749623
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1776 Lincoln Street, Suite 806, Denver, CO 80203
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (303) 894-0763
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
class of common stock, as of the latest practicable date.
3,220,821 shares of Common Stock, $.01 par value at February 9, 1996
<PAGE>
<TABLE>
CLX ENERGY, INC.
BALANCE SHEETS
December 31, 1995 and September 30, 1995
(Unaudited)
<CAPTION>
December 31, September 30,
ASSETS: 1995 1995
<S> <C> <C>
Current assets:
Cash 28,718 6,719
Accounts Receivable:
Trade 1,463 2,334
Oil and gas sales 11,402 7,178
Deposits and prepaid expenses 271 720
------- -------
Total current assets 41,854 16,951
------- -------
Property and equipment, at cost:
Oil and gas properties
(successful effort method):
Proved 330,049 330,049
Unproved 8,748 20,463
Office equipment 4,763 4,763
------- -------
343,560 355,275
Less accumulated depreciation
and depletion (143,310) (132,806)
------- -------
200,250 222,469
------- -------
Total assets 242,104 239,420
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable 21,186 11,598
Note payable-bank 67,375 53,375
Current portion on long-term debt 16,644 16,680
Due joint interest owners 8,355 8,355
Accrued expenses 464 392
------- -------
Total current liabilities 114,024 90,400
Long-term debt, less current portion 4,134
------- -------
Total liabilites 114,024 94,534
------- -------
Stockholders' equity:
Preferred stock, $.01 par value,
2,000,000 shares authorized,
600,000 shares designated Series A
$.06 cumulative convertible:
134,000 shares issued and outstanding
(aggregate involuntary liquidation
preference of $134,000 plus unpaid
dividends) 1,340 1,340
Common stock, $.01 par value,
50,000,000 shares authorized,
3,220,821 shares issued and
outstanding 32,208 32,208
Additional paid-in capital 424,750 424,750
Accumulative deficit (330,218) (313,412)
------- -------
Net stockholders' equity 128,080 144,886
------- -------
Total Liabilities and Equities 242,104 239,420
======= =======
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
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<TABLE>
CLX ENERGY, INC.
STATEMENTS OF OPERATIONS
Three months ended December 31, 1995 and 1994
(Unaudited)
<CAPTION>
Three Months Ended
December 31,
1995 1994
<S> <C> <C>
Revenues:
Oil and gas sales 22,449 33,001
Management fees 4,240 16,380
------- -------
Total revenue 26,689 49,381
Operating costs and expenses:
Lease operating and
production taxes 7,433 8,214
Lease rentals and abandonments 1,645
Depreciation and depletion 10,504 16,398
General and administrative 45,253 49,759
------- -------
Total operating costs and expenses 64,835 74,371
------- -------
Operating loss ( 38,146) ( 24,990)
------- -------
Other income (expenses):
Gain on sale of assets 23,557 5,000
Interest income 78
Interest expense ( 2,217) ( 1,619)
------- -------
Total other income (expenses) 21,340 3,459
------- -------
Net income (loss) ( 16,806) ( 21,531)
======= =======
Weighted average number of common
shares outstanding 3,220,821 3,220,821
========= =========
Net loss per common share ( .01) ( .01)
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
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<TABLE>
CLX ENERGY, INC.
STATEMENTS OF CASH FLOWS
Three Months Ended December 31, 1995 and 1994
(Unaudited)
<CAPTION>
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net loss ( 16,806) ( 21,531)
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Depreciation and depletion 10,504 16,398
Abandoned properties 520
Gain on sale of assets ( 23,557) ( 5,000)
(Increase) in
accounts receivable ( 3,353) ( 4,695)
(Increase) decrease in
prepaid expenses 449 ( 130)
Increase in accounts payable 9,588 11,513
Increase in accrued expenses
and other 72 15
------- -------
Net cash provided by (used in)
operating activities ( 22,583) ( 3,430)
Cash flows from investing activities:
Proceeds from sale of property and equipment 47,199 5,000
Purchase of property and equipment ( 12,447) ( 9,689)
------- -------
Net cash provided by (used in)
investing activities 34,752 ( 4,689)
Cash flows from financing activities:
New short-term borrowings 14,000
Payments on long-term borrowings ( 4,170) ( 4,170)
------- -------
Net cash provided by (used in)
financing activities 9,830 ( 4,170)
------- -------
Net increase (decrease) in cash 21,999 ( 12,289)
Cash, beginning of period 6,719 20,197
------- -------
Cash, end of period 28,718 7,908
======= =======
Supplemental disclosures of cash
flow information - cash paid
during period for interest 2,145 1,604
======= =======
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
CLX ENERGY, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
December 31, 1995
Note A - Basis of Presentation
The balance sheet as of December 31, 1995, the statements of
operations for the three months ended December 31, 1995 and 1994 and
the statements of cash flows for the three months ended December 31, 1995
and 1994 have been prepared by the Company, without audit. In the
opinion of management, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial
position, results of operations and cash flows at December 31, 1995
and for all periods presented have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principals have been condensed or omitted as permitted by
the rules and regulations of the Securities and Exchange Commission.
While the Company believes that the disclosures are adequate to make
the information presented not misleading, it is suggested that these
financial statements be read in conjunction with the September 30, 1995
financial statements of CLX Energy, Inc., the notes thereto and the
Independent Auditors' Report thereon.
Note B - Net loss per common share
Net loss per common share is computed on the basis of the weighted
average number of common and common equivalent shares outstanding
during the period. Common stock equivalents, consisting of options,
have not been considered in the computation because they have reduced
the net loss per share.
Note C - Preferred stock
Each share of the Company's outstanding Series A preferred stock was
convertible into one share of common stock until the conversion
privilege expired on April 30, 1983. Except in certain specified
circumstances, the Series A preferred stock is nonvoting. The Series
A shares are redeemable at the option of the Company at $1.50 per
share, plus any accrued and unpaid dividends. The Series A preferred
stock has an involuntary liquidation preference of $1 per share plus
accrued and unpaid dividends. Dividends on preferred stock of $.06
per share, $8,040, were not declared in 1984 through 1995 for a total
of $96,480 and are in arrears at December 31, 1995.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Analysis of Financial Condition
During the three months ended December 31, 1995, the Company purchased
unproved oil and gas properties at a cost of approximately $8,700.
During the same period, the Company sold part of its interest in
certain unproved oil and gas prospects for $47,199. The Company received
$4,240 for management fees in connection with acting as contract operator
for certain wells to be drilled in early 1996. The seismic program that
the Company was receiving $5,000 in management fees per month in 1994
terminated at the end of December, 1994.
Capital Resources and Liquidity
At December 31, 1995 the Company had negative working capital of
$72,170. Revenues from existing oil and gas production and management
fees from operating a drilling program will not be adequate to cover the
normal operating expenses of the Company without a reduction of general
and administrative expenses. In addition, the Company may be required
to continue to sell some of its oil and gas properties or raise additional
capital from other sources to participate in any drilling activities.
The Company continues to attempt to acquire producing properties for
stock or in leveraged transactions to increase its monthly revenues.
Analysis of Results of Operations
Oil and gas sales decreased as a result of declines in production and the
sale of an interest in a producing oil property. Management fees decreased
due to the termination of the seismic program at the end of December,
1994 for which the Company was receiving $5,000 per month.
Lease operating expenses and production taxes decreased due to the sale of
an interest in a producing property with high operating costs and lower
production taxes as a result of lower sales. Depreciation and depletion
decreased primarily as a result of reduced production of oil and gas
reserves and a lower cost basis of producing properties as a result of
an impairment provision at September 30, 1995. General and administrative
expenses decreased primarily due to a general decrease in activity.
In December, 1995 the Company sold part of its interests in two unproved
oil and gas prospects that resulted in a gain of approximately $23,500.
In prior year, the Company sold part of its interest in an unproved oil
and gas prospect that resulted in a gain of $5,000. Interest expense
increased as a result of additional short-term borrowings.
<PAGE>
PART 2 - OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 2. Changes in Securities.
None
Item 3. Defaults Upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information.
None
Item 6. Exhibits and Reports on Form 8-K.
None
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.
CLX ENERGY, INC.
/s/ E. J. Henderson
By: E. J. Henderson
President and Chief
Financial Officer
Dated: February 12, 1996
