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, 1996
Commission File No. 0-9392
CLX ENERGY, INC.
(Exact name of registrant as specified in its charter)
COLORADO 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.
4,054,154 shares of Common Stock, $.01 par value at February 7, 1997
<PAGE>
CLX ENERGY, INC.
December 31, 1996
INDEX
Form 10-Q
Part I. - Financial Information
Balance Sheets - December 31, 1996 and
September 30, 1996
Statements of Operations for the three months
ended December 31, 1996 and 1995
Statements of Cash Flows for the three months
ended December 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
December 31, 1996 and September 30, 1996
(Unaudited)
<CAPTION>
December 31, September 30,
ASSETS: 1996 1996
<S> <C> <C>
Current assets:
Cash 62,680 15,245
Accounts Receivable:
Trade 5,682 736
Oil and gas sales 16,204 14,010
Deposits and prepaid expenses - 49
------- -------
Total current assets 84,566 30,040
------- -------
Property and equipment, at cost:
Oil and gas properties
(successful effort method):
Proved 329,732 329,732
Unproved 15,338 7,438
Office equipment 3,618 3,618
------- -------
348,688 340,788
Less accumulated depreciation
and depletion (168,550) (162,039)
------- -------
180,138 178,749
------- -------
Total assets 264,704 208,789
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable 19,781 5,677
Note payable-bank - 57,000
Current portion on long-term debt - 4,134
Due joint interest owners 8,355 8,355
Accrued expenses - 356
------- -------
Total current liabilities 28,136 75,522
------- -------
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,
4,054,154 shares issued and
outstanding (3,220,821 shares
at September 30, 1996) 40,542 32,208
Additional paid-in capital 541,417 424,750
Accumulative deficit (346,731) (325,031)
------- -------
Net stockholders' equity 236,568 133,267
------- -------
Total Liabilities and Equities 264,704 208,789
======= =======
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
CLX ENERGY, INC.
STATEMENTS OF OPERATIONS
Three months ended December 31, 1996 and 1995
(Unaudited)
<CAPTION>
Three Months Ended
December 31,
1996 1995
<S> <C> <C>
Revenues:
Oil and gas sales 29,918 22,449
Management fees 8,648 4,240
------- -------
Total revenue 38,566 26,689
Operating costs and expenses:
Lease operating and
production taxes 9,811 7,433
Lease rentals and abandonments 1,374 1,645
Depreciation and depletion 6,511 10,504
General and administrative 46,369 45,253
------- -------
Total operating costs and expenses 64,065 64,835
------- -------
Operating loss ( 25,499) ( 38,146)
------- -------
Other income (expenses):
Gain on sale of assets 5,000 23,557
Interest expense ( 1,201) ( 2,217)
------- -------
Total other income (expenses) 3,799 21,340
------- -------
Net loss ( 21,700) ( 16,806)
======= =======
Weighted average number of common
shares outstanding 3,465,386 3,220,821
========= =========
Net loss per common share ( .01) ( .01)
======= =======
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
CLX ENERGY, INC.
STATEMENTS OF CASH FLOWS
Three Months Ended December 31, 1996 and 1995
(Unaudited)
<CAPTION>
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net loss ( 21,700) ( 16,806)
Adjustments to reconcile net loss
to net cash provided by (used in)
operating activities:
Depreciation and depletion 6,511 10,504
Abandoned properties - 520
Gain on sale of assets ( 5,000) ( 23,557)
(Increase) in
accounts receivable ( 7,140) ( 3,353)
Decrease in prepaid expenses 49 449
Increase in accounts payable 14,104 9,588
Increase (decrease) in accrued
expenses and other ( 355) 72
------- -------
Net cash provided by (used in)
operating activities ( 13,531) ( 22,583)
------- -------
Cash flows from investing activities:
Proceeds from sale of property and equipment 5,000 47,199
Purchase of property and equipment ( 7,900) ( 12,447)
------- -------
Net cash provided by (used in)
investing activities ( 2,900) 34,752
------- -------
Cash flows from financing activities:
New short-term borrowings - 14,000
Payments on short-term borrowings ( 57,000) -
Payments on long-term borrowings ( 4,134) ( 4,170)
Proceeds from issuance of common stock 125,000 -
------- -------
Net cash provided by (used in)
financing activities 63,866 9,830
------- -------
Net increase (decrease) in cash 47,435 21,999
Cash, beginning of period 15,245 6,719
------- -------
Cash, end of period 62,680 28,718
======= =======
Supplemental disclosures of cash
flow information - cash paid
during period for interest 1,557 2,145
======= =======
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
CLX ENERGY, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
December 31, 1996
Note A - Basis of Presentation
The balance sheet as of December 31, 1996, the statements of
operations for the three months ended December 31, 1996 and 1995 and
the statements of cash flows for the three months ended December 31, 1996
and 1995 have been prepared by the Company, without audit. The preparation of
financial statements requires management to make estimates and assumptions
that affect certain reported amounts and disclosures. Accordingly, actual
results could differ from those estimates. 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, 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, 1996
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 1996 for a total
of $104,520 and are in arrears at December 31, 1996.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Analysis of Financial Condition
During the three months ended December 31, 1996, the Company purchased
unproved oil and gas properties at a cost of approximately $7,900.
During the same period, the Company sold part of its interest in
certain unproved oil and gas prospects for $5,000. The Company received
$8,648 for management fees in connection with acting as contract operator
on certain wells drilled during the three months ended December 31, 1996. In
December 1996, the Company sold in a private placement 833,333 shares of common
stock for $.15 per share for a total of $125,000.
Capital Resources and Liquidity
At December 31, 1996 the Company had working capital of $56,430. Revenues
from existing oil and gas production and management fees from operating a
drilling program are not 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 significant 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 increased primarily as a result of increases in gas and oil
prices. Management fees increased due to an increase in activity on a drilling
program that the Company acts as operator.
Lease operating expenses and production taxes increased due to higher
production taxes as a result of the increase in sales prices and an increase in
operating costs caused primarily by adverse weather conditions. Depreciation
and depletion decreased primarily as a result of reduced production of oil
and gas reserves. General and administrative expenses increased by an
insignificant amount.
In December, 1996 the Company sold part of its interest in unproved oil and
gas prospects that resulted in a gain of $5,000. 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. Interest expense decreased as a result of
the repayment of all short-term and long-term debt.
<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.
(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: February 7, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> DEC-31-1996
<CASH> 62,680
<SECURITIES> 0
<RECEIVABLES> 21,886
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 84,566
<PP&E> 348,688
<DEPRECIATION> 168,550
<TOTAL-ASSETS> 264,704
<CURRENT-LIABILITIES> 28,136
<BONDS> 0
<COMMON> 41,042
0
1,340
<OTHER-SE> 194,186
<TOTAL-LIABILITY-AND-EQUITY> 264,704
<SALES> 29,918
<TOTAL-REVENUES> 38,566
<CGS> 16,222
<TOTAL-COSTS> 16,222
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,201
<INCOME-PRETAX> (21,700)
<INCOME-TAX> 0
<INCOME-CONTINUING> (21,700)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (21,700)
<EPS-PRIMARY> ( .01)
<EPS-DILUTED> ( .01)
</TABLE>
