UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE PERIOD ENDED SEPTEMBER
30, 1995.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD
FROM________________________ TO__________________________
Commission File Number 0-9953
BONRAY DRILLING CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 73-1086424
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
4701 N. E. 23rd Street, Oklahoma City, Oklahoma 73121
(Address of principal executive offices, including zip code)
405/424-4327
(Registrant's telephone number, including area code)
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 classes of common stock, as of the latest practicable
date:
Class Outstanding at October 31, 1995
Common Stock, $1.00 par value 423,540 shares
<PAGE>
BONRAY DRILLING CORPORATION
Index
Page
Number
------
PART I. FINANCIAL INFORMATION
Condensed Consolidated Balance Sheets at September 30,
1995 and June 30, 1995
Condensed Consolidated Statements of Operations for the
three months ended September 30, 1995 and 1994
Consolidated Statements of Cash Flows for the three months
ended September 30, 1995 and 1994
Notes to Condensed Consolidated Financial Statements
Management's Discussion and Analysis of Financial
Condition and Results of Operations
PART II. OTHER INFORMATION
Items 1 through 5 have been omitted since the items are
either inapplicable or the answer is negative.
<PAGE>
PART I. FINANCIAL INFORMATION
BONRAY DRILLING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Information at September 30, 1995 is unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
September 30, June 30,
1995 1995
----------- -------
<S> <C> <C>
Assets
- ------
Current assets:
Cash and cash equivalents $ 167 $ 160
Accounts receivable, net 1,827 2,139
Drilling contracts in progress 71 21
Prepaid expenses 115 94
----- -----
Total current assets 2,180 2,414
Properties and equipment, net 8,088 8,233
----- ------
Total assets $10,268 $10,647
======= =======
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 858 $ 965
Current portion of long term obligations 566 551
Accrued liabilities:
Salaries and wages 101 163
Workers' compensation insurance 139 66
Income taxes - 61
Other 157 100
----- -----
Total current liabilities 1,821 1,906
Obligations due after one year 539 693
Stockholders' equity:
Common stock, $1.00 par value; 800,000
shares authorized, 432,740 shares
issued 433 433
Capital in excess of par value 12,497 12,497
Accumulated deficit (4,930) (4,790)
------ ------
8,000 8,140
Less - cost of 9,200 treasury shares 92 92
------ ------
Total stockholders' equity 7,908 8,048
------ ------
Total liabilities and stockholders'
equity $10,268 $10,647
======= =======
</TABLE>
See accompanying Notes to Condensed Consolidated Financial
Statements.
<PAGE>
BONRAY DRILLING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
----------------
1995 1994
---- ----
<S> <C> <C>
Revenues:
Contract drilling operations $ 2,360 $ 2,211
Gain (loss) on disposal of assets (7) 2
Other 11 19
------- -------
2,364 2,232
Costs and expenses:
Contract drilling operations 1,951 1,710
General and administrative 236 193
Depreciation 317 370
------- -------
2,504 2,273
------- -------
Net income (loss) $ (140) $ (41)
======= =======
Net income (loss) per share $ (.33) $ (.10)
======= =======
Average shares outstanding 423,540 423,540
======= =======
</TABLE>
See accompanying Notes to Condensed Consolidated Financial
Statements.
<PAGE>
BONRAY DRILLING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
-----------------
1995 1994
---- ----
<S> <C> <C>
Cash flows from operating activities:
Cash received from customers $ 2,760 $ 2,230
Cash paid to suppliers and employees (2,434) (2,368)
Interest received 1 -
Interest paid (19) (7)
Other cash receipts 16 23
------ ------
Net cash provided (used) by
operating activities 324 (122)
Cash flows from investing activities:
Proceeds from sales of assets 8 9
Capital expenditures (193) (155)
Cash received from settlement of
insurance claims - 11
------ ------
Net cash used in investing activities (185) (135)
Cash flows from financing activities:
Proceeds from short term borrowings - 275
Payments on notes payable (132) -
------ ------
Net cash provided (used) by financing
activities (132) 275
Net increase in cash and cash equivalents 7 18
Cash and cash equivalents at beginning
of period 160 9
------ ------
Cash and cash equivalents at end of period $ 167 $ 27
====== ======
Reconciliation of net loss to net cash provided
by operating activities:
Net loss $ (140) $ (41)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation 317 370
Loss (gain) on disposal of assets 7 (2)
Change in assets and liabilities:
Decrease (increase) in current assets:
Accounts receivable 312 (643)
Drilling contracts in progress (50) 34
Prepaid expenses and taxes (21) 11
Increase (decrease) in current liabilities:
Accounts payable (107) 67
Accrued liabilities 7 35
Obligations due after one year (7) 47
Other 6 -
------ ------
Total adjustments 464 (81)
------ ------
Net cash provided (used) by operating
activities $ 324 $ (122)
======= =======
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE>
BONRAY DRILLING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
September 30, 1995
1. In the opinion of the Company the accompanying unaudited
condensed financial statements contain all adjustments
(consisting of primarily normal recurring accruals)
necessary to present fairly the financial position as of
September 30, 1995 and June 30, 1995, the results of
operations for the three months ended September 30, 1995 and
1994 and the changes in financial position for the three
month periods then ended. The condensed balance sheet at
June 30, 1995 was derived from information obtained from
audited financial statements as of that date.
2. The results of operations for the three month period ended
September 30, 1995 are not necessarily indicative of the
results to be expected for the full year.
3. Net income per common share is computed on the basis of the
weighted average shares of common stock outstanding.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
- -------------------------------
The Company reported net working capital at September 30,
1995 of $359,000 and a current ratio of 1.20 to 1, compared to
net working capital of $508,000 and a current ratio of 1.27 to 1
at June 30, 1995. The decrease in cash and cash equivalents of
$149,000 during the quarter is largely due to expenditures for
drilling equipment.
The energy industry remains generally depressed and is not
expected to improve in the near future. Most of the Company's
customers pay for services on a basis of 60 to 90 days. Due to
the inordinate delay in collecting receivables, the Company has a
line of credit at a local bank. The agreement with the bank
provides for credit up to $750,000 at a rate 1/2% above the
national prime lending rate and requires the Company to pledge up
to 75% of its receivables. The agreement expires October 31,
1996. At the end of the quarter, the Company had no borrowings
under this agreement.
Management will continue to exercise tight controls in order
to minimize expenses without affecting productivity and by making
only those capital expenditures required to maintain the rigs in
good operating condition.
Results of Operations
- ---------------------
Revenues from contract drilling operations for the first
quarter of fiscal year 1996 were $2,360,000, compared to
$2,631,000 reported last quarter and $2,211,000 reported for the
same period last year.
Gross income from drilling operations, excluding
depreciation was $409,000 which compares to a gross income of
$469,000 last quarter and gross income of $501,000 for the same
quarter last year. Rig utilization during the first quarter of
fiscal year 1996 was 43.99% compared to 48.13% last quarter and
43.71% for the same period last year.
Daywork contracts generally provide for the payment of a
certain amount per day without a limit on the time necessary to
drill a well to its contract depth. Daywork contracts transfer
certain risks associated with the drilling activity to the
Company's customers.
For footage contracts, the Company earns (at an agreed
depth) a specific amount per foot drilled without regard to the
problems it may encounter in the drilling process or the amount
of drilling time necessary to achieve the contract depth. For
turnkey contracts, the Company agrees to drill to a specified
depth for a specified amount. It may also agree to provide
additional materials and services in connection with the
completion of a well which presents the opportunity for
additional profits. Turnkey and footage contracts generally do
not provide compensation for drilling delays or problems
encountered in the drilling process, thus shifting certain risks
to the Company.
The following table shows the composition of revenue and
operating profit from drilling contracts by type of contract. No
allocation of corporate overhead, interest, or depreciation is
reflected in the computations.
<TABLE>
<CAPTION>
Three Months Ended
9/30/95 6/30/95 9/30/94
------- ------- -------
<S> <C> <C> <C>
Revenue
- -------
Daywork 87.5% 91.5% 93.3%
Footage 12.5% 8.5% 6.7%
Turnkey 0.0% 0.0% 0.0%
Operating Profit
- ----------------
Daywork 94.4% 89.5% 96.2%
Footage 5.6% 10.5% 3.8%
Turnkey 0.0% 0.0% 0.0%
</TABLE>
Depreciation for the quarter was $317,000, which is $53,000
less than the same quarter a year ago. Both quarters include a
charge to depreciation on stacked or mothballed rigs.
Depreciation of these inactive rigs and equipment is $20,000 for
the current quarter and $23,000 for the quarter ended September
30, 1994.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits - There were no exhibits for the quarter ended
September 30, 1995.
(b) Reports on Form 8-K - There were no reports on Form 8-K
filed for the three months ended September 30, 1995.
<PAGE>
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.
BONRAY DRILLING CORPORATION
Date: November 10, 1995 By: RICHARD B. HEFNER
Richard B. Hefner, President and Chief
Executive Officer
Date: November 10, 1995 By: JOANNE BELCHER
Joanne Belcher, Controller and
Chief Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000351693
<NAME> BONRAY DRILLING CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> SEP-30-1995
<CASH> 167
<SECURITIES> 0
<RECEIVABLES> 1,827
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,180
<PP&E> 22,281
<DEPRECIATION> 14,193
<TOTAL-ASSETS> 10,268
<CURRENT-LIABILITIES> 1,821
<BONDS> 0
<COMMON> 433
0
0
<OTHER-SE> 7,475
<TOTAL-LIABILITY-AND-EQUITY> 10,268
<SALES> 2,360
<TOTAL-REVENUES> 2,364
<CGS> 1,951
<TOTAL-COSTS> 2,504
<OTHER-EXPENSES> 553
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (140)
<INCOME-TAX> 0
<INCOME-CONTINUING> (140)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (140)
<EPS-PRIMARY> (0.33)
<EPS-DILUTED> 0.00
</TABLE>
