<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-Q
____________________
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
OR
( ) 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 0-12757
TMBR/SHARP DRILLING, INC.
(Exact name of registrant as specified in its charter)
TEXAS 75-1835108
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4607 WEST INDUSTRIAL BLVD.
MIDLAND, TEXAS 79703
(Address of principal executive offices) (Zip Code)
Registrant's telephone number (area code) (915) 699-5050
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.
Common Stock, $.10 Par Value Outstanding at August 9, 1999
(Title of Class) 4,710,886
<PAGE> 2
TMBR/SHARP DRILLING, INC.
FORM 10-Q REPORT
INDEX
Page No.
Part I. Financial Information (Unaudited)
Item 1. Financial Statements
Balance Sheets, June 30, 1999 and
March 31, 1999 . . . . . . . . . . . . . . . . . . . . 3
Statements of Operations, Three Months
Ended June 30, 1999 and 1998 . . . . . . . . . . . . . 5
Statements of Stockholders'
Equity . . . . . . . . . . . . . . . . . . . . . . . 7
Statements of Cash Flows, Three Months
Ended June 30, 1999 and 1998 . . . . . . . . . . . . . 8
Notes to Financial Statements . . . . . . . . . . . . . 9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . 13
Part II. Other Information
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . 16
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . 16
-2-
<PAGE> 3
PART ONE - FINANCIAL INFORMATION (UNAUDITED)
Item 1. FINANCIAL STATEMENTS
TMBR/SHARP DRILLING, INC.
BALANCE SHEETS
June 30, 1999 (Unaudited) and March 31, 1999
(In thousands, except per share data)
June 30,
1999 March 31,
ASSETS (Unaudited) 1999
------ ------------- -----------
Current assets:
Cash and cash equivalents $ 968 $ 1,195
Marketable securities 49 49
Trade receivables,
net of allowance for doubtful
accounts of $1,349 at both
June 30, and March 31, 1999 3,107 3,451
Inventories 55 94
Deposits 73 73
Other 510 567
-------- --------
Total current assets 4,762 5,429
-------- --------
Property and equipment, at cost:
Drilling equipment 49,034 48,868
Oil and gas properties, based on
successful efforts accounting 19,152 18,742
Other property and equipment 3,569 3,569
-------- --------
71,755 71,179
Less accumulated depreciation,
depletion and amortization (58,412) (57,858)
-------- --------
Net property and equipment 13,343 13,321
-------- --------
Other assets 173 173
-------- --------
Total assets $ 18,278 $ 18,923
======== ========
See accompanying notes to financial statements.
-3-
<PAGE> 4
TMBR/SHARP DRILLING, INC.
BALANCE SHEETS
June 30, 1999 (Unaudited) and March 31, 1999
(In thousands, except per share data)
June 30,
1999 March 31,
LIABILITIES AND STOCKHOLDERS' EQUITY (Unaudited) 1999
------------------------------------ ------------ -----------
Current liabilities:
Trade payables $ 1,862 $ 1,424
Other 437 764
-------- --------
Total current liabilities 2,299 2,188
-------- --------
Contingencies
Stockholders' equity:
Common stock, $0.10 par value
Authorized, 50,000,000 shares;
issued 5,979,625 shares at
June 30, and March 31, 1999 598 598
Additional paid-in capital 69,429 69,429
Accumulated deficit (53,860) (53,104)
Accumulated other comprehensive
income (loss) (38) (38)
Treasury stock-common, 1,268,739
shares at June 30, and
March 31, 1999, at cost (150) (150)
-------- --------
Total stockholders' equity 15,979 16,735
-------- --------
Total liabilities and
stockholders' equity $ 18,278 $ 18,923
======== ========
See accompanying notes to financial statements.
-4-
<PAGE> 5
TMBR/SHARP DRILLING, INC.
STATEMENTS OF OPERATIONS
Three months ended June 30, 1999 and 1998 (Unaudited)
(In thousands, except per share data)
Three months ended
June 30,
-----------------------------
1999 1998
----------- -----------
Revenues:
Contract drilling $ 1,723 $ 6,270
Oil and gas 481 499
----------- -----------
Total revenues 2,204 6,769
----------- -----------
Operating costs and expenses:
Contract drilling 1,712 4,587
Oil and gas production 245 175
Dry holes and abandonments 81 196
Depreciation, depletion and
amortization 554 720
General and administrative 402 449
----------- -----------
Total operating costs
and expenses 2,994 6,127
----------- -----------
Operating (loss) income (790) 642
----------- -----------
Other income:
Interest 17 42
Gain on sales of assets -- 4
Other, net 17 --
----------- -----------
Total other income 34 46
----------- -----------
Net (loss) income before income
tax provision (756) 688
Provision for income taxes -- (14)
----------- -----------
Net (loss) income $ (756) $ 674
=========== ===========
See accompanying notes to financial statements.
-5-
<PAGE> 6
TMBR/SHARP DRILLING, INC.
STATEMENTS OF OPERATIONS
Three months ended June 30, 1999 and 1998 (Unaudited)
(In thousands, except per share data)
Three months ended
June 30,
-----------------------------
1999 1998
----------- -----------
Net (loss) income per common share:
Basic $ (.16) $ .14
Diluted (.16) .13
=========== ===========
Weighted average number of
common shares outstanding:
Basic 4,710,886 4,710,886
Diluted 4,710,886 5,083,957
=========== ===========
See accompanying notes to financial statements.
-6-
<PAGE> 7
TMBR/SHARP DRILLING, INC.
STATEMENTS OF STOCKHOLDERS EQUITY
Three Months Ended June 30, 1999 (Unaudited) and
Year Ended March 31, 1999 (Audited)
(In thousands)
<TABLE>
<CAPTION>
Accumulated
Common Stock Additional Other Treasury Stock Total
-------------- Paid-In Accumulated Comprehensive -------------- Stockholders'
Shares Amount Capital Deficit Income (Loss) Shares Amount Equity
------ ------ ------- ----------- ------------- ------ ------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance,
March 31, 1999 5,980 $ 598 $ 69,429 $(53,104) $ (38) 1,270 $(150) $16,735
Net loss -- -- -- (756) -- -- -- (756)
----- ----- -------- -------- ---- ------- ----- -------
Balance,
June 30, 1999 5,980 $ 598 $ 69,429 $(53,860) $ (38) 1,270 $(150) $15,979
===== ===== ======== ======== ==== ======= ===== =======
</TABLE>
See accompanying notes to financial statements.
-7-
<PAGE> 8
TMBR/SHARP DRILLING, INC.
STATEMENTS OF CASH FLOWS
For the three months ended June 30, 1999 and 1998 (Unaudited)
(In thousands)
Three months ended June 30,
------------------------------
1999 1998
--------- ---------
Cash flows from operating activities:
Net (loss) income $ (756) $ 674
Adjustments to reconcile net (loss) income
to net cash provided by
operating activities:
Depreciation, depletion and
amortization 554 720
Dry holes and abandonments 81 196
Gain on sales of assets -- (4)
Changes in assets and liabilities:
Trade receivables 344 484
Deposits -- (31)
Inventories and other assets 96 60
Trade payables 438 1,602
Accrued interest and other liabilities (327) (752)
-------- --------
Total adjustments 1,186 2,275
-------- --------
Net cash provided by
operating activities 430 2,949
Cash flows from investing activities:
Additions to property and equipment (657) (1,033)
Proceeds from sales of property and
equipment -- 52
-------- --------
Net cash required by
investing activities (657) (981)
Cash flows from financing activities:
Issuance of common stock -- --
-------- --------
Net cash provided by
financing activities -- --
-------- --------
Net (decrease) increase in
cash and cash equivalents (227) 1,968
Cash and cash equivalents at beginning
of period 1,195 1,623
-------- --------
Cash and cash equivalents at end of
period $ 968 $ 3,591
======== ========
See accompanying notes to financial statements.
-8-
<PAGE> 9
TMBR/SHARP DRILLING, INC.
NOTES TO FINANCIAL STATEMENTS
The amounts presented in the balance sheet as of March 31, 1999 were
derived from the Company's audited financial statements included in its
Form 10-K Report filed for the year then ended. The notes to such
statements are incorporated herein by reference.
(1) Management's Representation
In the opinion of management, the accompanying unaudited financial
statements contain all adjustments (all of which are of a normal recurring
nature) necessary to present fairly the Company's financial position as of
June 30, 1999 and March 31, 1999, the results of operations for the three
months ended June 30, 1999 and 1998, and the cash flows for the three month
periods ended June 30, 1999 and 1998.
While the Company believes that the disclosures presented are adequate
to make the information not misleading, it is suggested that these
condensed financial statements be read in conjunction with the financial
statements and the related notes in the Company's Annual Report on Form 10-
K for the fiscal year ended March 31, 1999.
(2) Summary of Significant Accounting Policies
Marketable Securities
Under SFAS No. 115, "Accounting for Certain Investments in Debt and
Equity Securities", marketable securities, such as those owned by the
Company, are classified as available-for-sale securities and are to be
reported at market value, with unrealized gains and losses, net of income
taxes, excluded from earnings and reported as a separate component of
stockholders' equity. The market value of these securities at June 30,
1999 was approximately $49,000. An unrealized loss of approximately
$38,000 was deducted from stockholders equity and was included as a
component of other comprehensive income.
Inventories
Inventories consist primarily of casing and tubing. The Company
values its inventories at the lower of cost or estimated net recoverable
value using the specific identification method.
Property and Equipment
Drilling equipment is depreciated on a units-of-production method
based on the monthly utilization of the equipment. Drilling equipment
which is not utilized during a month is depreciated using a minimum
utilization rate of approximately twenty-five percent. Estimated useful
lives range from four to eight years. Other property and equipment is
-9-
<PAGE> 10
depreciated using the straight-line method of depreciation with estimated
useful lives of three to seven years.
Oil and gas properties are accounted for using the successful efforts
method. Accordingly, the costs incurred to acquire property (proved and
unproved), all development costs and successful exploratory costs are
capitalized, whereas the costs of unsuccessful exploratory wells are
expensed. Geological and geophysical costs, including seismic costs, are
charged to expense when incurred. In cases where the Company provides
contract drilling services related to oil and gas properties in which it
has an ownership interest, the Company's proportionate share of costs
related to these properties is capitalized as stated above, net of the
Company's working interest share of profits from the related drilling
contracts. Capitalized costs of undeveloped properties, which are not
depleted until proved reserves can be associated with the properties, are
periodically reviewed for possible impairment.
Depletion, depreciation and amortization of capitalized oil and gas
property costs was provided using the units-of-production method based on
estimated proved or proved developed oil and gas reserves, as applicable,
of the respective property units.
Major renewals and betterments are capitalized in the appropriate
property accounts while the cost of repairs and maintenance is charged to
operating expense in the period incurred. For assets sold or otherwise
retired, the cost and related accumulated depreciation amounts are removed
from the accounts and any resulting gain or loss is recognized.
Net Income (Loss) Per Common Share
On April 1, 1997, the Company adopted Statement of Financial
Accounting Standards No. 128 ("SFAS 128") "Earnings Per Share" which
superseded Accounting Principles Board Opinion No. 15 ("APB 15") "Earnings
Per Share". SFAS 128 simplifies earnings per share ("EPS") calculations by
replacing previously reported primary EPS with basic EPS which is
calculated by dividing reported earnings available to common shareholders
by the weighted average shares outstanding. No dilution for potentially
dilutive securities is included in basic EPS. Previously reported fully
diluted EPS is called diluted EPS which includes all potentially dilutive
securities.
(3) Debt
Line of Credit
On January 16, 1996, the Company entered into a loan agreement with
Norwest Bank Texas, N.A. ("Norwest") that provided for a $3,000,000
revolving line of credit secured by the Company's drilling rigs and related
equipment, accounts receivable and inventory. Borrowings under the line of
credit bore interest at the Norwest Bank Minnesota, National Association
base rate and the interest was payable monthly. The loan agreement had an
extended maturity date of April 15, 1998, at which time, the outstanding
principal and all of the accrued and unpaid interest were due and payable.
-10-
<PAGE> 11
In August, 1996, the Company entered into a second loan agreement with
Norwest. The second loan agreement provided for a $2,000,000 revolving
line of credit secured by substantially all of the Company's producing oil
and gas properties. Borrowings under the line of credit bore interest at
the Norwest base rate and the interest was payable monthly. The line of
credit had an extended maturity date of April 15, 1998, at which time, the
principal amount outstanding was due and payable, plus any accrued and
unpaid interest. The borrowings under both loan agreements were paid in
full in February, 1997.
On May 26, 1998, the Company renewed and extended the prior loan
agreements with Norwest Bank Texas, N. A.. The amended and restated loan
agreement provides for a $5,000,000 revolving line of credit secured by the
Company's drilling rigs and related equipment, accounts receivable and
inventory. Borrowings under the renewed and extended line of credit bear
interest at the Norwest Bank base rate and interest is payable monthly.
The renewed and extended loan agreement matures on May 26, 2000. No
amounts were outstanding under the line of credit on June 30, 1999.
(4) Stockholders' Equity
1984 Stock Option Plan
In August of 1984, the Company adopted the 1984 Stock Option Plan (the
"Plan") which initially authorized 375,000 shares of the Company's common
stock to be issued as either incentive stock options or nonqualified stock
options. This Plan was amended in August 1986 to increase the authorized
shares to 475,000 shares of the Company's common stock. In January 1988,
the Plan was amended to reduce the option price on certain options issued
prior to March 31, 1986, to reflect the then current fair market value of
the Company's common stock. The Plan provides that options may be granted
to key employees or directors for various terms at a price not less than
the fair market value of the shares on the date of the grant. Options to
purchase 100,000 shares of common stock are currently exercisable and
outstanding under the Plan. No additional shares are available for grant
as the Plan expired by its own terms in August 1994. The options that were
granted prior to the expiration of the Plan, and which are outstanding,
remain subject to the terms of the Plan.
1994 Stock Option Plan
In July 1994, the Company adopted its 1994 Stock Option Plan (the
"1994 Plan") which authorized the grant of options to purchase up to
750,000 shares of the Company's common stock. These options may be issued
as either incentive or nonqualified stock options. The 1994 Plan provides
that options may be granted to key employees or directors for various terms
at a price not less than the fair market value of the shares on the date of
grant. The 1994 Plan was ratified and approved by the stockholders at the
Company's annual meeting of stockholders held on August 30, 1994. In
September 1998, options outstanding under the plan were amended to reduce
the option price to $4.125 per share.
On September 3, 1996, the Company granted 465,000 shares of
-11-
<PAGE> 12
nonqualified stock options to key employees under the 1994 Plan. All of
the nonqualified stock options granted on September 3, 1996 are earned and
exercisable as of May 1, 1997. On September 1, 1998, the Company granted
240,000 shares of incentive stock options at a price of $4.125 to key
employees under the 1994 Plan. On March 9, 1999, 140,000 shares became
earned and exercisable. The remaining 100,000 shares will become earned
and exercisable over a three year period. The following sets forth certain
information concerning these options.
Number Option Price
of ---------------------
Shares Per Share Total
------ ---------------------
Outstanding March 31, 1999 572,500 $4.125-4.5375 $ 2,420,963
Forfeited (5,000) 4.125 (20,625)
------- ------------ ---------
Outstanding June 30, 1999 567,500 $4.125-4.5375 $2,400,338
======= ============ =========
1998 Stock Option Plan
In September 1998, the Company adopted, subject to shareholder
approval, its 1998 Stock Option Plan (the "1998 Plan") which authorizes the
grant of options to purchase up to 750,000 shares of the Company's common
stock. These options may be issued as either incentive or nonqualified
stock options. The 1998 Plan provides that options may be granted to key
employees or directors from various terms at a price not less than the fair
market value of the shares on the date of grant. The Company granted
options to purchase 50,000 shares of common stock to two outside directors
under the 1998 Plan. These nonqualified options were granted at $4.125 per
share and are exercisable on the date on which the shareholders of the
Company approve and adopt the 1998 Plan.
In connection with a private placement completed in February 1997, the
Company issued and currently has outstanding a warrant to purchase 36,250
common shares with an exercise price of $13.20 per share. This warrant
became exercisable on February 17, 1998 and expires on February 17, 2002.
(6) Employee Benefits
Effective May 1, 1995, the Company established the TMBR/Sharp
Drilling, Inc. Employee Retirement Plan which is a 401(K) profit sharing
plan. Company contributions are discretionary and have been currently set
at 25% for each dollar contributed by each eligible employee, limited,
however, to a maximum of 5% of the employee's compensation. The Company
has decided to terminate the 401(K) plan effective March 31, 1999.
(7) Contingencies
The Company is a defendant in various lawsuits generally incidental to
its business. The Company does not believe that the ultimate resolution of
such litigation will have a significant effect on the Company's financial
position or results of operations.
-12-
<PAGE> 13
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
In addition to historical information, this discussion contains
certain forward-looking statements that involve risks and uncertainties
about the business, long-term strategy, financial condition and future of
the Company. Factors that may affect future results are included in the
discussion below and in Part I, Items 1 and 2 of the Company's Form 10-K
for the year ended March 31, 1999. Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable,
it can give no assurance that such expectations will prove to have been
correct, and actual results could differ materially from those forward-
looking statements.
Results of Operations
Total revenues were $2,204,000 for the three months ended June 30,
1999 which represents a 67% decrease from the same period in 1998.
Operating expenses as a percent of revenues were 136% for the three months
ended June 30, 1999 versus 91% for the same period of the prior year. The
operating results were negatively affected by a decrease in demand for the
Company's contract drilling services which resulted in a decrease in rig
utilization rates. The Company has also experienced a decrease in the
average price received for its contract drilling services. Rig utilization
rates were 16% for the three months ended June 30, 1999 compared to 48% in
the same period in 1998.
Oil and gas revenues decreased by approximately 4% for the three
months ended June 30, 1999. Oil and gas production expenses increased
approximately 40% due to major workovers of two wells.
In fiscal 1999, the Company recognized a non-cash charge of
approximately $1.3 million due to a writedown of the carrying value of its
oil and gas properties. As a result of this writedown, depreciation,
depletion and amortization expense decreased by approximately 23% when
compared to the three months ended June 30, 1998.
Net working capital was $2.5 million at June 30, 1999 compared to $3.2
million at March 31, 1999.
Liquidity and Capital Resources
In January 1996, the Company entered into a loan agreement with
Norwest providing for a revolving credit facility (the "Credit Facility")
originally maturing on January 15, 1998. The aggregate principal amount of
the Company's borrowings outstanding at any one time under the revolving
facility was limited to the lesser of $3.0 million or one-third of the
borrowing base amount then in effect. The borrowing base amount was
redetermined by Norwest monthly. The Credit Facility was established to
finance the Company's purchases of drill pipe and oil and gas exploration
activities. Interest only was payable monthly and the entire principal
amount was due and payable on January 15, 1998, which was extended to April
15, 1998. The Credit Facility bore interest at Norwest's base rate and was
-13-
<PAGE> 14
secured by substantially all of the Company's accounts receivable, drilling
rigs and related equipment.
In August 1996, the Company entered into a second loan agreement with
Norwest. This second loan agreement provided for a $2.0 million revolving
line of credit (the "Line of Credit") secured by substantially all of the
Company's producing oil and gas properties. The Line of Credit was
established to finance the Company's oil and gas exploration activities and
for general corporate purposes. The Line of Credit bore interest at
Norwest's base rate, with interest only to be paid monthly. The original
maturity date of February 15, 1998, was extended to April 15, 1998. At
that time the principal amount then outstanding was due and payable, plus
any accrued and unpaid interest.
On May 26, 1998, the Company renewed, extended and consolidated the
prior loan facilities with Norwest. The amended and restated loan
agreement provides for a revolving line of credit equal to the lesser of
$5.0 million or one-third of the "borrowing base amount". The borrowing
base is redetermined by Norwest within 45 days after the end of each fiscal
quarter of the Company. At June 30, 1999, the borrowing base was $19.3
million. Borrowings under the line of credit are secured by the Company's
drilling rigs and related equipment, accounts receivable and inventory.
Borrowings bear interest at Norwest's base rate and interest is payable
monthly. The Company did not have any borrowings outstanding at June 30,
1999. All amounts outstanding under the loan facility mature on May 26,
2000.
The Company anticipates that funds for its capital expenditures in
fiscal 2000 will be available from a combination of sources, including (i)
borrowings under the line of credit, (ii) funds raised through issuances of
equity or debt securities in public or private transactions, and (iii)
internally generated funds.
Trends and Prices
The contract drilling industry continues to experience decreased
demand and declining prices for contract drilling services due to the
declines in oil and gas prices. The Company has and will continue to be
affected by oil and gas industry conditions but cannot predict either the
future level of demand for its contract drilling services or future
conditions in the contract drilling industry. In late 1998 and the first
quarter of 1999, oil and gas prices decreased significantly. Although oil
and gas prices have rebounded, there has been no substantial increase in
the demand for contract drilling services.
In recent years, oil and gas prices have been extremely volatile.
Prices are affected by market supply and demand factors as well as by
actions of state and local agencies, the U.S. and foreign governments and
international cartels. The Company has no way of accurately predicting the
supply of and demand for oil and gas, domestic or international political
events or the effects of any such factors on the prices received by the
Company for its oil and gas.
-14-
<PAGE> 15
Year 2000 Issues
The Year 2000 (Y2K) issue is the risk that systems, products and
equipment utilizing data-sensitive software or computer chips with two-
digit date fields will fail to properly recognize the Year 2000. Such
failures by the Company's software and hardware or that of government
entities, service providers, suppliers and customers could result in
interruptions of the Company's business which could have a material adverse
impact on the Company. Significant uncertainty exists concerning the
potential effects associated with such compliance as systems that do not
properly recognize such information could generate erroneous data or cause
a system to fail.
In order to address the Year 2000 issue, the Board of Directors
appointed a committee consisting of the President, Chief Financial Officer
and Legal Counsel to assist the Company in its Year 2000 efforts.
At June 30, 1999, the Company had completed updating and testing its
information systems for Year 2000 compliance and has determined that the
Year 2000 issues directly related to its information systems will not have
a material impact on its business, operations nor its financial position.
The cost of planning, implementing and testing the Company's information
systems was minimal and immaterial to its operations as a whole.
The Company believes that its greatest risk for Year 2000 issues that
may adversely effect the Company's operations is in the area of third party
computer systems that are not Year 2000 compliant and which, as a result,
may cause interruptions in the Company's normal business operations. The
Year 2000 committee prepared a formal questionnaire which was sent to all
significant customers, suppliers, purchasers and vendors, to determine the
extent to which the Company was vulnerable to those third parties' failure
to remediate the Year 2000 problem. The Company has received written
assurances from approximately 50% of its purchasers, suppliers and
customers who responded as being Year 2000 compliant. The third party
confirmation process is still ongoing.
Currently, the Company does not have a remediation or contingency plan
in effect but will continue to monitor and assess Year 2000 issues and a
contingency plan will be developed before December 31, 1999.
In the event that any of the Company's significant vendors, customers,
purchasers and local, state, federal and other U. S. government entities do
not successfully and timely achieve Year 2000 compliance, the Company's
business, operations or financial position could be adversely affected. In
addition, there can be no assurance that unexpected Year 2000 compliance
problems of either the Company or its vendors, customers, purchasers and
local, state, federal and other U. S. government entities would not
materially and adversely affect the Company's business, financial condition
or operating results.
-15-
<PAGE> 16
PART TWO - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is a defendant in various lawsuits generally incidental to
its business. The Company does not believe that the ultimate resolution of
such litigation will have a significant effect on the Company's financial
position or results of operations.
Item 6. Exhibits and reports on Form 8-K.
(a) Exhibits:
27 - Financial Data Schedule
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the quarter ended June
30, 1999.
-16-
<PAGE> 17
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.
TMBR/SHARP DRILLING, INC.
August 13, 1999 By: /s/ Patricia R. Elledge
--------------- --------------------------
Date Patricia R. Elledge
Controller/Treasurer
(Ms. Elledge is the Chief Financial
Officer and has been duly authorized
to sign on behalf of the Registrant)
-17-
<PAGE> 18
Exhibit Index
Exhibit
Number Description
------- -----------
27 Financial Data Schedule
-18-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-END> JUN-30-1999
<CASH> 968
<SECURITIES> 49
<RECEIVABLES> 3107
<ALLOWANCES> 1349
<INVENTORY> 55
<CURRENT-ASSETS> 4762
<PP&E> 71755
<DEPRECIATION> 58412
<TOTAL-ASSETS> 18278
<CURRENT-LIABILITIES> 2299
<BONDS> 0
0
0
<COMMON> 598
<OTHER-SE> 15381
<TOTAL-LIABILITY-AND-EQUITY> 18278
<SALES> 0
<TOTAL-REVENUES> 2204
<CGS> 0
<TOTAL-COSTS> 2994
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (756)
<INCOME-TAX> 0
<INCOME-CONTINUING> (756)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (756)
<EPS-BASIC> (.16)
<EPS-DILUTED> (.16)
</TABLE>
