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 March 31, 1996
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 May 2, 1996
<PAGE>
CLX ENERGY, INC.
March 31, 1996
INDEX
Form 10-Q
Part I. - Financial Information
Balance Sheets - March 31, 1996 and
September 30, 1995
Statements of Operations for the six months
and three months ended March 31,
1996 and 1995
Statements of Cash Flows for the six months
ended March 31, 1996 and 1995
Notes to Unaudited Financial Statements
Management's Discussion and Analysis of
Financial Condition and Results of
Operations
Part II. - Other Information
Signatures
<PAGE>
<TABLE>
CLX ENERGY, INC.
BALANCE SHEETS
March 31, 1996 and September 30, 1995
(Unaudited)
<CAPTION>
March 31, September 30,
ASSETS: 1996 1995
<S> <C> <C>
Current assets:
Cash 20,488 6,719
Accounts Receivable:
Trade 18,994 2,334
Oil and gas sales 11,724 7,178
Deposits and prepaid expenses 197 720
------- -------
Total current assets 51,403 16,951
------- -------
Property and equipment, at cost:
Oil and gas properties
(successful effort method):
Proved 330,049 330,049
Unproved 6,978 20,463
Office equipment 4,763 4,763
------- -------
341,790 355,275
Less accumulated depreciation
and depletion (150,107) (132,806)
------- -------
191,683 222,469
------- -------
Total assets 243,086 239,420
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable 14,843 11,598
Note payable-bank 62,000 53,375
Current portion on long-term debt 12,474 16,680
Due joint interest owners 8,355 8,355
Accrued expenses 423 392
------- -------
Total current liabilities 98,095 90,400
Long-term debt, less current portion 4,134
------- -------
Total liabilites 98,095 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 (313,307) (313,412)
------- -------
Net stockholders' equity 144,991 144,886
------- -------
Total Liabilities and Equities 243,086 239,420
======= =======
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
CLX ENERGY, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Six Months Ended Three Months Ended
March 31, March 31,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Revenues:
Oil and gas sales 49,010 53,874 26,561 20,873
Management fees 17,726 17,760 13,486 1,380
------- ------- ------- -------
Total revenue 66,736 71,634 40,047 22,253
Operating costs and expenses:
Lease operating and
production taxes 15,550 16,490 8,117 8,276
Lease rentals and abandonments 1,424 1,442 ( 221) 1,442
Depreciation and depletion 17,301 26,136 6,797 9,738
General and administrative 70,135 81,368 24,882 31,609
------- ------- ------- -------
Total operating costs and expenses 104,410 125,436 39,575 51,065
------- ------- ------- -------
Operating income (loss) ( 37,674) ( 53,802) 472 ( 28,812)
------- ------- ------- -------
Other income (expenses):
Gain on sale of assets 42,087 5,000 18,530 -
Interest income - 561 - 483
Interest expense ( 4,308) ( 3,414) ( 2,091) ( 1,795)
------- ------- ------- -------
Total other income (expenses) 37,779 2,147 16,439 ( 1,312)
------- ------- ------- -------
Net income (loss) 105 ( 51,655) 16,911 ( 30,124)
======= ======= ======= =======
Weighted average number of common
shares outstanding 3,220,821 3,220,821 3,220,821 3,220,821
========= ========= ========= =========
Net income (loss) per common share .00 ( .02) .01 ( .01)
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
CLX ENERGY, INC.
STATEMENTS OF CASH FLOWS
Six Months Ended March 31, 1996 and 1995
(Unaudited)
<CAPTION>
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) 105 ( 51,655)
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities:
Depreciation and depletion 17,301 26,136
Abandoned properties 520
Gain on sale of assets ( 42,087) ( 5,000)
(Increase) in
accounts receivable ( 21,206) ( 2,883)
(Increase) decrease in
prepaid expenses 523 ( 538)
Increase in accounts payable 3,245 23,799
Increase in accrued expenses
and other 31 124
------- -------
Net cash provided by (used in)
operating activities ( 41,568) ( 10,017)
------- -------
Cash flows from investing activities:
Proceeds from sale of property and equipment 68,575 5,000
Purchase of property and equipment ( 13,523) ( 25,478)
------- -------
Net cash provided by (used in)
investing activities 55,052 ( 20,478)
------- -------
Cash flows from financing activities:
New short-term borrowings 14,000 20,000
Payments on short-term borrowings ( 5,375) -
Payments on long-term borrowings ( 8,340) ( 8,340)
------- -------
Net cash provided by (used in)
financing activities 285 11,660
------- -------
Net increase (decrease) in cash 13,769 ( 18,835)
Cash, beginning of period 6,719 20,197
------- -------
Cash, end of period 20,488 1,362
======= =======
Supplemental disclosures of cash
flow information - cash paid
during period for interest 4,277 3,290
======= =======
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
CLX ENERGY, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
March 31, 1996
Note A - Basis of Presentation
The balance sheet as of March 31, 1996, the statements of operations
for the six months and three months ended March 31, 1996 and 1995 and
the statements of cash flows for the six months ended March 31, 1996
and 1995 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 March 31, 1996 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 income (loss) per common share
Net income (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 would have
been antidilutive.
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 in a prior year (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 March 31, 1996.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Analysis of Financial Condition
During the six months ended March 31, 1996, the Company purchased
unproved oil and gas properties at a cost of approximately $13,500.
During the same period, the Company sold part of its interest in
certain unproved oil and gas prospects for $68,575. The Company received
$17,726 for management fees in connection with acting as contract operator
for certain wells 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 March 31, 1996 the Company had negative working capital of
$46,692. 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 for the six months ended March 31, 1996 as a
result of declines in production and the sale of an interest in a producing
oil property. The sales decreases for the six months were offset by sales
from a new gas well that was completed in late February of 1995. Oil and gas
sales for the three months ended March 31, 1996 increased over the three months
ended March 1995 primarily due to the new gas well completed in late February
of 1995. Management fees increased for the three months ended March 31, 1996
as compared to the three months ended March 31, 1995 due to management fees
received for acting as contract operator on certain wells drilled in early 1996.
Lease operating expenses and production taxes decreased primarily due to the
sale of an interest in a producing property with high operating costs.
Depreciation and depletion decreased primarily as a result of declining
production on most of the oil and gas properties 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.
During the six months ended March 31, 1996 the Company sold part of its
interests in three unproved oil and gas prospects that resulted in gains
of approximately $42,000. 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 II - 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.
(a) Exhibits
Exhibit 27. Financial Data Schedule
(b) 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: May 2, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> MAR-31-1996
<CASH> 20,488
<SECURITIES> 0
<RECEIVABLES> 30,718
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 51,403
<PP&E> 341,790
<DEPRECIATION> 150,107
<TOTAL-ASSETS> 243,086
<CURRENT-LIABILITIES> 98,095
<BONDS> 0
<COMMON> 32,208
0
1,340
<OTHER-SE> 111,443
<TOTAL-LIABILITY-AND-EQUITY> 243,086
<SALES> 49,010
<TOTAL-REVENUES> 66,736
<CGS> 32,550
<TOTAL-COSTS> 32,550
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,308
<INCOME-PRETAX> 105
<INCOME-TAX> 0
<INCOME-CONTINUING> 105
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 105
<EPS-PRIMARY> .00
<EPS-DILUTED> .00
</TABLE>
