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 June 30, 1997
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.
4,054,154 shares of Common Stock, $.01 par value at August 12, 1997
<PAGE>
CLX ENERGY, INC.
June 30, 1997
INDEX
Form 10-Q
Part I. - Financial Information
Balance Sheets - June 30, 1997 and
September 30, 1996
Statements of Operations for the nine months
and three months ended June 30,
1997 and 1996
Statements of Cash Flows for the nine months
ended June 30, 1997 and 1996
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
June 30, 1997 and September 30, 1996
(Unaudited)
<CAPTION>
June 30, September 30,
ASSETS: 1997 1996
<S> <C> <C>
Current assets:
Cash 48,917 15,245
Accounts Receivable:
Trade 1,632 736
Oil and gas sales 9,491 14,010
Deposits and prepaid expenses - 49
------- -------
Total current assets 60,040 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 (179,923) (162,039)
------- -------
168,765 178,749
------- -------
Total assets 228,805 208,789
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable 7,686 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 16,041 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 at
September 30, 1996) 40,542 32,208
Additional paid-in capital 541,417 424,750
Accumulative deficit (370,535) (325,031)
------- -------
Net stockholders' equity 212,764 133,267
------- -------
Total Liabilities and Equities 228,805 208,789
======= =======
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
CLX ENERGY, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Nine Months Ended Three Months Ended
June 30, June 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Revenues:
Oil and gas sales 89,617 79,725 17,591 30,715
Management fees 21,583 17,726 4,535 -
------- ------- ------- -------
Total revenue 111,200 97,451 22,126 30,715
Operating costs and expenses:
Lease operating and
production taxes 27,519 26,120 6,209 10,570
Lease rentals and abandonments 1,913 1,888 246 464
Dry hole costs 6,430 - 6,430 -
Depreciation and depletion 17,884 23,751 5,046 6,450
General and administrative 106,757 97,194 29,620 27,059
------- ------- ------- -------
Total operating costs and expenses 160,503 148,953 47,551 44,543
------- ------- ------- -------
Operating loss ( 49,303) ( 51,502) ( 25,425) ( 13,828)
------- ------- ------- -------
Other income (expenses):
Gain on sale of assets 5,000 44,587 - 2,500
Interest expense ( 1,201) ( 6,072) - ( 1,764)
------- ------- ------- -------
Total other income (expenses) 3,799 38,515 - 736
------- ------- ------- -------
Net loss ( 45,504) ( 12,987) ( 25,425) ( 13,092)
======= ======= ======= =======
Weighted average number of common
shares outstanding 3,855,741 3,220,821 4,054,154 3,220,821
========= ========= ========= =========
Net loss per common share ( .01) ( .01) ( .01) ( .01)
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
CLX ENERGY, INC.
STATEMENTS OF CASH FLOWS
Nine Months Ended June 30, 1997 and 1996
(Unaudited)
<CAPTION>
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net loss ( 45,504) ( 12,987)
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities:
Depreciation and depletion 17,884 23,751
Abandoned properties - 520
Gain on sale of assets ( 5,000) ( 44,587)
(Increase) decrease in
accounts receivable 3,624 ( 6,351)
Decrease in
prepaid expenses 49 597
Increase (decrease) in
accounts payable 2,009 ( 4,723)
Increase (decrease) in
accrued expenses and other ( 356) ( 34)
------- -------
Net cash provided by (used in)
operating activities ( 27,294) ( 43,814)
------- -------
Cash flows from investing activities:
Proceeds from sale of property and equipment 5,000 71,075
Purchase of property and equipment ( 7,900) ( 13,983)
------- -------
Net cash provided by (used in)
investing activities ( 2,900) 57,092
------- -------
Cash flows from financing activities:
New short-term borrowings - 14,000
Payments on short-term borrowings ( 57,000) ( 10,375)
Payments on long-term borrowings ( 4,134) ( 12,510)
Proceeds from issuance of common stock 125,000 -
------- -------
Net cash provided by (used in)
financing activities 63,866 ( 8,885)
------- -------
Net increase (decrease) in cash 33,672 4,393
Cash, beginning of period 15,245 6,719
------- -------
Cash, end of period 48,917 11,112
======= =======
Supplemental disclosures of cash
flow information - cash paid
during period for interest 1,557 6,106
======= =======
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
CLX ENERGY, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
June 30, 1997
Note A - Basis of Presentation
The balance sheet as of June 30, 1997, the statements of operations
for the nine months and three months ended June 30, 1997 and 1996 and
the statements of cash flows for the nine months ended June 30, 1997
and 1996 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 June 30, 1997 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 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 1997 for a total
of $112,560 and are in arrears at June 30, 1997.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Analysis of Financial Condition
During the nine months ended June 30, 1997, the Company purchased
unproved oil and gas properties at a cost of approximately $7,900 and
participated in the drilling of dry holes at a cost of $6,430.
During the same period, the Company sold part of its interest in
certain unproved oil and gas prospects for $5,000. The Company received
$21,583 for management fees in connection with acting as contract operator for
certain wells drilled during the nine months ended June 30, 1997. 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 June 30, 1997 the Company had working capital of $43,999. 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 increased for the nine months ended June 30, 1997 primarily
as a result of higher oil and gas prices during the first six months of the
Company's fiscal year. Oil and gas sales decreased for the three months ended
June 30, 1997 primarily as a result of lower gas prices during that three month
period. Management fees for the nine months and three months ended June 30,
1997 as compared to the nine months and three months ended June 30, 1996
increased due to an increase in activity on a drilling program that the company
acts as operator.
Lease operating expenses and production taxes did not change significantly for
the nine months ended June 30, 1997 as compared to the nine months ended
June 30, 1996. Lease operating expenses and production taxes for the three
months ended June 30, 1997 as compared to the three months ended June 30, 1996
decreased due to a reduction in production taxes as a result of the decrease in
sales, and a general decrease in operating costs. Depreciation and depletion
decreased primarily as a result of declining production on most of the oil and
gas properties. General and administrative expenses increased for the nine
months and the three months ended June 30, 1997 as compared to the prior
periods primarily due to a general increase in activity.
During the nine months ended June 30, 1997 the Company sold part of its
interests in an unproved oil and gas prospect that resulted in a gain of
$5,000. During the nine months ended June 30, 1996 the Company sold part of
its interest in three unproved oil and gas prospects that resulted in gains of
$44,587. Interest expense decreased due to the repayment of all short-term
and long-term debt.
<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: August 12, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> JUN-30-1997
<CASH> 48,917
<SECURITIES> 0
<RECEIVABLES> 11,123
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 60,040
<PP&E> 348,688
<DEPRECIATION> 179,923
<TOTAL-ASSETS> 228,805
<CURRENT-LIABILITIES> 16,041
<BONDS> 0
<COMMON> 40,542
0
1,340
<OTHER-SE> 170,882
<TOTAL-LIABILITY-AND-EQUITY> 228,805
<SALES> 89,617
<TOTAL-REVENUES> 111,200
<CGS> 45,103
<TOTAL-COSTS> 45,103
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,201
<INCOME-PRETAX> (45,504)
<INCOME-TAX> 0
<INCOME-CONTINUING> (45,504)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (45,504)
<EPS-PRIMARY> ( .01)
<EPS-DILUTED> ( .01)
</TABLE>
