<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): October 22, 1997
(October 21, 1997)
GREY WOLF, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
Texas 1-8226 74-2144774
(State of Incorporation) (Commission File Number) (IRS Employer Identification No.)
</TABLE>
10370 Richmond Avenue, Suite 600
Houston, Texas 77042-4136
(Address of Registrant's principal executive offices)
(713) 435-6100
(Registrant's telephone number, including area code)
(Not Applicable)
(Former name or former address, if changed since last report)
<PAGE> 2
ITEM 5. OTHER EVENTS
INITIAL CLOSING OF THE JUSTISS ACQUISITION
On October 21, 1997, Grey Wolf , Inc., a Texas corporation (the
"Company"), closed the acquisition of nine drilling rigs (the "First Justiss
Closing") from Justiss Oil Company, Inc., a Louisiana corporation ("Justiss
Oil"). These rigs are part of the twelve rigs the Company contracted to
acquire from Justiss Oil pursuant to an Asset Purchase Agreement dated
September 15, 1997 (the "Purchase Agreement"). The remaining three rigs are
planned to be acquired by the Company at one or more closings (the "Subsequent
Justiss Closings") after such rigs complete current contractual drilling
obligations to third parties, which the Company believes will take place by the
end of November 1997. At the First Justiss Closing, the Company paid Justiss
Oil approximately $28.6 million in cash, $28.0 million of which was drawn from
the Company's revolving credit facility with its commerical banks (the "Bank
Credit Facility"). The Company anticipates that it will pay Justiss Oil a
total of approximately $7.4 million at the Subsequent Justiss Closings. The
consideration for the Subsequent Justiss Closings will be funded from the Bank
Credit Facility or, if any of the Subsequent Justiss Closings take place after
the closing of the Company's proposed public offering of Common Stock, from the
proceeds of such offering.
The Purchase Agreement was more fully described in the Current Report
of Form 8-K of the Company dated September 19, 1997, and the Purchase Agreement
was attached to such report as Exhibit 99.1.
THIRD QUARTER FINANCIAL AND OPERATING DATA
On October 22, 1997, the Company reported net income of $2.7 million,
or $0.02 per share, for the three months ended September 30, 1997, compared
with net income of $0.8 million, or $0.01 per share, for the third quarter of
1996. Revenues were $63.8 million and $22.0 million for the three months ended
September 30, 1997 and 1996, respectively. For the nine months ended September
30, 1997, the Company reported net income of $6.1 million, or $0.04 per share,
compared to a net loss of $0.2 million, or $0.01 per share, for the nine months
of 1996. Revenues for the first nine months of 1997 were $139.8 million
compared with $61.3 million for the first nine months of 1996.
During the third quarter of 1997, the Company's rig fleet operated a
total of 7,011 days compared to 2,847 days for the third quarter of 1996. For
the first nine months of 1997, the Company's fleet operated a total of 15,992
days compared to 8,228 for the nine months ended September 30, 1996.
The following unaudited financial and operating data were released by
the Company on October 22, 1997 and have been derived from the unaudited
consolidated financial statements of the Company. The data include all
adjustments, consisting of normal recurring adjustments, that the Company
considers necessary for a fair presentation of its financial position and
results of operations for the periods indicated. Operating results for the
three months and nine months ended September 30, 1997 are not necessarily
indicative of the results that may be expected for the entire year.
2
<PAGE> 3
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------- ---------------------------
1997 1996 1997 1996
------------- ------------- -------------- ------------
(In thousands, except per share amounts)
(unaudited)
<S> <C> <C> <C> <C>
Revenues $ 63,750 $ 22,031 $139,796 $61,316
Costs and expenses:
Drilling operations 45,287 18,887 107,419 57,205
Depreciation and amortization 7,016 1,159 12,196 3,380
General and administrative 2,315 877 5,684 2,672
Non-recurring charges -- -- -- 602
-------- -------- -------- -------
Total costs and expenses 54,618 20,923 125,299 63,859
-------- -------- -------- -------
Operating income (loss) 9,132 1,108 14,497 (2,543)
Other income (expense):
Gain on sale of assets 229 23 583 2,972
Interest income 459 45 647 149
Interest expense (3,870) (322) (5,405) (788)
Minority interest 2 (46) 340 51
-------- -------- -------- -------
Other income (expense), net (3,180) (300) (3,835) 2,384
-------- -------- -------- -------
Net income (loss) before income taxes 5,952 808 10,662 (159)
Income taxes 3,230 -- 4,586 --
-------- -------- -------- -------
Net income (loss) 2,722 808 6,076 (159)
Series A preferred stock
redemption premium -- -- (240) --
Series B Preferred stock subscription
dividend requirement -- (100) -- (400)
Net income (loss) applicable to -------- -------- -------- -------
common stock $ 2,722 $ 708 $ 5,836 $ (559)
======== ======== ======== =======
Net income (loss) per common share $ .02 $ .01 $ .04 $ (.01)
======== ======== ======== =======
Weighted average common and common
equivalent shares outstanding 151,628 68,853 141,105 48,812
======== ======== ======== =======
Operating data for the periods:
Number of operating days 7,011 2,847 15,992 8,228
Number of total available days 8,373 4,509 20,483 12,851
Utilization rate 84% 63% 78% 64%
Average revenue per day $ 9,093 $ 7,738 $ 8,742 $ 7,452
Rigs at September 30, 1997:
Marketable rigs 94
Labor contracts - rigs owned by
others 1
Inventory rigs 27
--------
Total 122
========
</TABLE>
3
<PAGE> 4
SIGNATURE
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.
Date: October 22, 1997
GREY WOLF, INC.
By: /s/ DAVID W. WEHLMANN
------------------------------------
David W. Wehlmann
Vice President and Controller
