-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BekgseHYShPm83Dx07RlbV4VP9nbpJNfMzl0U2xEtdOQ/hpX8Qa6O83G7rZ4iGvA ioWOPrADr63wB1QAd5Dgow== 0000890566-96-000374.txt : 19960619 0000890566-96-000374.hdr.sgml : 19960619 ACCESSION NUMBER: 0000890566-96-000374 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960514 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CORE LABORATORIES N V CENTRAL INDEX KEY: 0001000229 STANDARD INDUSTRIAL CLASSIFICATION: 8731 STATE OF INCORPORATION: P7 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-26710 FILM NUMBER: 96562842 BUSINESS ADDRESS: STREET 1: 1017 BZ AMSTERDAM CITY: THE NETHERLANDS STATE: P7 BUSINESS PHONE: 3120420319 MAIL ADDRESS: STREET 1: HERENGRACHT 424 STREET 2: 1017 BZ AMSTERDAM CITY: THE NETHERLANDS STATE: P7 10-Q 1 QUARTERLY REPORT FOR THE PERIOD ENDED 3/31/96 UNITED STATES 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 March 31, 1996 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 0-26710 CORE LABORATORIES N.V. (Exact name of Registrant as specified in its charter) THE NETHERLANDS NOT APPLICABLE (State of other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) HERENGRACHT 424 1017 BZ AMSTERDAM THE NETHERLANDS NOT APPLICABLE (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (31-20) 420-3191 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 The number of shares of common shares of the Registrant, par value NLG .03 per share, outstanding at May 10, 1996 was 9,466,800. CORE LABORATORIES N.V. FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1996 INDEX
PAGE Part I -- Financial Information Item 1 -- Financial Statements Consolidated Balance Sheets at March 31, 1996 and December 31, 1995 ....................... 1 Consolidated Income Statements for the Three Months Ended March 31, 1996 and 1995 ............................................................... 2 Consolidated Statements of Cash Flows for the Three Months Ended March 31, 1996 and 1995 .............................................................. 3 Notes to Consolidated Financial Statements ................................................ 4 Item 2-- Management's Discussion and Analysis of Financial Condition and Results of Operations ........................................................................ 6 Part II -- Other Information Item 1-- Legal Proceedings...................................................................... 9 Item 2--Changes in Securities................................................................... 9 Item 3-- Defaults Upon Senior Securities........................................................ 9 Item 4-- Submission of Matters to a Vote of Security Holders ................................... 9 Item 5--Other Information....................................................................... 10 Item 6-- Exhibits and Reports on Form 8-K ..................................................... 10 Signature ....................................................................................... 11 i CORE LABORATORIES N.V. CONSOLIDATED BALANCE SHEETS (IN THOUSANDS OF DOLLARS, EXCEPT SHARE DATA) MARCH 31, DECEMBER 31, 1996 1995 ---------- --------- ASSETS (UNAUDITED) (AUDITED) CURRENT ASSETS: Cash and cash equivalents................................................... $ 2,672 $ 4,326 Accounts receivable, net.................................................... 25,093 22,540 Inventories ................................................................ 7,118 8,135 Prepaid expenses and other ................................................ 1,183 1,039 Deferred tax assets ....................................................... 320 320 ---------- --------- Total current assets ........................................................... 36,386 36,360 PROPERTY, PLANT AND EQUIPMENT.................................................... 27,431 22,964 Less-- accumulated depreciation............................................. (3,868) (2,926) ---------- ---------- 23,563 20,038 INTANGIBLES AND GOODWILL, net ................................................... 8,416 8,513 DEFERRED DEBT COST, net ......................................................... 49 35 LONG-TERM INVESTMENT ............................................................ 400 400 ---------- ---------- Total assets .......................................................... $ 68,814 $ 65,346 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities of long-term debt ....................................... $ 3,860 $ 2,500 Short-term debt............................................................. -- 190 Accounts payable............................................................ 3,018 5,430 Accrued payroll and related costs .......................................... 2,452 2,974 Accrued income taxes payable ............................................... 960 613 Other accrued expenses .................................................... 3,704 2,461 ---------- ---------- Total current liabilities ...................................................... 13,994 14,168 LONG-TERM DEBT .................................................................. 13,850 11,875 DEFERRED TAX LIABILITIES ........................................................ 611 611 OTHER LONG-TERM LIABILITIES .................................................... 1,511 1,509 MINORITY INTEREST................................................................ 102 96 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY: Preference shares, NLG .03 par value; 3,000,000 shares authorized, no shares issued or outstanding......................................... - - Common shares, NLG .03 par value; 30,000,000 shares authorized, 9,466,800 issued and outstanding........................................ 166 166 Additional paid-in capital.................................................. 32,360 32,360 Retained earnings........................................................... 6,220 4,561 ---------- ---------- Total shareholders' equity.............................................. 38,746 37,087 ---------- ---------- Total liabilities and shareholders' equity......................... $ 68,814 $ 65,346 ========== ==========
The accompanying notes to consolidated financial statements are an integral part of these consolidated financial statements. 1 CORE LABORATORIES N.V. CONSOLIDATED INCOME STATEMENTS (IN THOUSANDS OF DOLLARS, EXCEPT SHARE AND PER SHARE DATA)
THREE MONTHS ENDED MARCH 31, --------------------------- 1996 1995 ----------- ---------- (UNAUDITED) (UNAUDITED) SERVICES ........................................................................ $ 16,496 $ 13,837 SALES............................................................................ 6,879 3,967 ----------- ---------- 23,375 17,804 OPERATING EXPENSES: Costs of services .......................................................... 12,999 10,958 Costs of sales.............................................................. 5,676 3,274 General and administrative expenses ........................................ 930 726 Depreciation and amortization............................................... 1,039 689 Other income, net........................................................... (51) 13 ----------- ----------- 20,593 15,660 INCOME BEFORE INTEREST EXPENSE AND INCOME TAX EXPENSE.......................................................... 2,782 2,144 INTEREST EXPENSE ................................................................ 342 802 ------------ ----------- INCOME BEFORE INCOME TAX EXPENSE................................................. 2,440 1,342 INCOME TAX EXPENSE .............................................................. 781 409 ----------- ----------- NET INCOME....................................................................... 1,659 933 LESS - Net income applicable to preferred loan stock............................. -- (112) ----------- ----------- NET INCOME APPLICABLE TO COMMON SHARES .......................................... $ 1,659 $ 821 =========== =========== NET INCOME PER SHARE ............................................................ $ .18 $ .12 =========== =========== WEIGHTED AVERAGE SHARES OUTSTANDING.............................................. 9,466,800 6,666,800 =========== ===========
The accompanying notes to consolidated financial statements are an integral part of these consolidated financial statements. 2 CORE LABORATORIES N.V. CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS OF DOLLARS)
THREE MONTHS ENDED MARCH 31, --------------------------- 1996 1995 ----------- ----------- (UNAUDITED) (UNAUDITED) CASH FLOWS FROM OPERATING ACTIVITIES: Net income.................................................................. $ 1,659 $ 933 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation............................................................ 942 629 Amortization............................................................ 100 114 Changes in assets and liabilities: Decrease (increase) in accounts receivable.............................. (1,097) 3,592 Decrease in inventories................................................. 1,017 482 Increase in prepaid expenses and other.................................. (133) (114) Decrease in accounts payable............................................ (2,733) (672) Increase (decrease) in accrued payroll.................................. (642) 152 Increase (decrease) in accrued income taxes payable..................... 347 (259) Increase (decrease) in other accrued expenses........................... 867 (1,266) Other .................................................................. (24) (108) ----------- ----------- Net cash provided by operating activities ......................... 303 3,483 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures........................................................ (775) (299) Acquisition of Gulf States Analytical, Inc. ................................ (4,310) -- Final payment for business acquired from Western Atlas International, Inc........................................................ -- (1,778) ----------- ----------- Net cash used in investing activities................................... (5,085) (2,077) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Payments on long-term debt ................................................. (6,565) (1,310) Borrowings under long-term debt ............................................ 9,900 -- Decrease in short-term debt................................................. (190) -- Other....................................................................... (17) -- ----------- ----------- Net cash provided by financing activities............................... 3,128 (1,310) ----------- ----------- NET CHANGE IN CASH............................................................... (1,654) 96 CASH, beginning of period........................................................ 4,326 2,698 ----------- ----------- CASH, end of period.............................................................. $ 2,672 $ 2,794 =========== ===========
The accompanying notes to consolidated financial statements are an integral part of these consolidated financial statements. 3 CORE LABORATORIES N.V. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES The accompanying unaudited consolidated financial statements include the accounts of Core Laboratories N.V. and its subsidiaries (the "Company"), and have been prepared in accordance with United States generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 1996 are not necessarily indicative of the results that may be expected for the year ending December 31, 1996. Balance sheet information as of December 31, 1995, has been derived from the 1995 annual audited financial statements. For further information, reference is made to the consolidated financial statements and footnotes thereto included in the Company's Form 10-K filed with the Securities and Exchange Commission on March 20, 1996. Net income per share is calculated by dividing net income available to common shareholders by the weighted average number of common and common equivalent shares outstanding during the applicable periods presented. 2. INVENTORIES Inventories are primarily items held for sales or services provided to customers. Inventories are stated at the lower of average cost (includes direct material, labor and overhead) or estimated realizable value. A summary of inventories is as follows (in thousands): MARCH 31, DECEMBER 31, 1996 1995 ------ ------ (UNAUDITED) (AUDITED) Parts and materials ............. $1,406 $3,468 Work in process ................. 5,712 4,667 ------ ------ Total .................. $7,118 $8,135 ====== ====== 4 CORE LABORATORIES N.V. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED (UNAUDITED) 3. LONG-TERM DEBT Long-term debt at March 31, 1996 and December 31, 1995 is summarized in the following table (in thousands):
MARCH 31, DECEMBER 31, 1996 1995 ---------- ----------- (UNAUDITED) (AUDITED) Unsecured Credit Agreement with a bank group: $14,000 term loan facility.............................................. $ 11,250 $ 11,875 $7,500 revolving credit facility........................................ -- 2,500 $15,000 uncommitted guidance facility .................................. 6,460 -- ---------- ----------- Total debt ........................................................ 17,710 14,375 Less-- current maturities............................................... 3,860 2,500 ---------- ----------- Total long-term debt........................................... $ 13,850 $ 11,875 =========== ===========
CORE LABORATORIES N.V. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following should be read in conjunction with the Company's Form 10-K filed with the Securities and Exchange Commission on March 20, 1996. GENERAL The Company is engaged in the business of (i) high-technology laboratory services and (ii) the manufacture and sale of integrated octane measurement equipment, process analyzer systems, and petroleum reservoir rock and fluids analysis instrumentation. The Company is the worldwide leader (based on revenues and laboratory procedures performed) in analyzing core samples from petroleum reservoirs and in providing reservoir fluids analyses. The Company is also the leading supplier of octane measurement systems for on-line process streams. Core Laboratories currently operates 46 facilities in 16 countries and has approximately 1,200 employees. The Company continually reviews potential acquisition possibilities in existing or related business areas to add key technologies, enhance market presence or complement existing businesses. In January 1996, the Company acquired substantially all of the assets of Gulf States Analytical, Inc., a Houston-based environmental testing laboratory. This acquisition is expected to broaden the services offered by the Company to its clients. 6 RESULTS OF OPERATIONS The following table sets forth certain percentage relationships based on the Company's income statements for the periods indicated:
THREE MONTHS ENDED MARCH 31, ------------------------------------------ PERCENTAGE OF TOTAL REVENUE ------------------------- % INCREASE 1996 1995 (DECREASE) ------- ------- ---------- Services ....................................................... 70.6 77.7 19.2 Sales ......................................................... 29.4 22.3 73.4 ------- -------- 100.0 100.0 31.3 Operating expenses: Cost of services .......................................... 55.6 61.5 18.6 Cost of sales ............................................ 24.3 18.4 73.4 General and administrative expenses........................ 4.0 4.1 28.1 Depreciation and amortization.............................. 4.4 3.9 50.8 Other income, net.......................................... (.2) .1 * -------- ------- 88.1 88.0 31.5 Income before interest expense and income tax expense........... 11.9 12.0 29.8 Interest expense................................................ 1.5 4.5 (57.4) ------- -------- Income before income tax expense................................ 10.4 7.5 81.8 Income tax expense.............................................. 3.3 2.3 91.0 ------- -------- Net income...................................................... 7.1 5.2 77.8 ======= ========
* Percentage not meaningful. Service revenue for three months ended March 31, 1996 increased 19.2% to $16.5 million compared to the corresponding period of 1995. The increase in service revenue primarily resulted from the acquisitions of four laboratories from PACE, Incorporated ("PACE Labs") and Gulf States Analytical, Inc. ("GSAI"). Sales revenue for the three month period ended March 31, 1996 increased 73.4% or $2.9 million over the same period of the prior year. The increase was primarily due to (i) additional revenue from the acquisition of Pastech, Inc. ("Pastech") and (ii) improved sales in the Company's Technology Products operation. Cost of services and sales as a percentage of services and sales revenue for the quarter ended March 31, 1996 was unchanged at 79% and 83%, respectively, compared to a year ago. General and administrative expenses for the quarter ended March 31, 1996 increased $0.2 million compared to the corresponding period in 1995. The increase was primarily due to costs associated with being a publicly traded company and increased personnel costs due to growth. Depreciation and amortization expense for the three month period ended March 31, 1996 increased 50.8% compared to a year ago primarily due to the acquisitions of Pastech, PACE Labs, and GSAI. 7 Interest expense for the quarter ended March 31, 1996 decreased 57.4% compared to 1995. The decrease was primarily due to a reduction in debt after the initial public offering of 2.8 million common shares in 1995. The Company's effective income tax rate was approximately 32.0% for the three months ended March 31, 1996 compared to 30.5% for three months ended March 31, 1995. LIQUIDITY AND CAPITAL RESOURCES The Company's primary capital requirements are for working capital, capital expenditures and acquisitions. For the three month period ended March 31, 1996 the Company had operating cash flow of $0.3 million compared to $3.5 million for the corresponding period in 1995. Management believes the Company's internal and external sources of cash will provide the necessary funds with which to meet its expected obligations. In January 1996, the Company borrowed $3.1 million under the revolving credit facility to partially fund the acquisition of GSAI. Subsequently, the Company borrowed $6.8 million under the guidance facility and used the funds to repay the outstanding $5.6 million drawn under the revolving credit facility. Quarterly principal installments of $340,000 on the guidance facility are due beginning March 31, 1996, with a final maturity on December 31, 2000. CORE LABORATORIES N.V. PART II -- OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. The Company is (or may from time to time be) a named defendant in lawsuits and is (or may from time to time be) a party in governmental proceedings from time to time arising in the ordinary course of business. While the outcome of such lawsuits or other proceedings against the Company cannot be predicted with certainty, management does not at this time expect these matters to have a material adverse effect on the financial condition or results of operations of the Company. ITEM 2. CHANGES IN SECURITIES. None. ITEM 3. DEFAULTS UPON SENIOR SECURITIES. None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Stockholders voting at the Annual Meeting on April 26, 1996, and by proxy, elected three incumbent Supervisory Directors to serve on the Company's Board of Supervisory Directors until the 1999 annual meeting. The vote tabulation for the individual Directors was: DIRECTOR SHARES FOR SHARES WITHHELD David M. Demshur 7,757,481 1,050 Bob G. Agnew 7,757,481 1,050 Timothy J. Probert 7,757,481 1,050 Voting stockholders also confirmed the Dutch Statutory Accounts for the year ended December 31, 1995. The proposal was approved by 7,752,681 (99.9%) votes for and 3,150 (0.04%) votes against with 2,700 (0.03%) abstentions. Voting stockholders also approved the extension of the authority of the Management Board to repurchase Common Shares of the Company until October 25, 1997. The proposal was approved by 6,943,183 (89.5%) votes for and 800 (0.01%) votes against with 2,450 (0.03%) abstentions and 812,098 (10.5%) non-votes. Voting stockholders also approved the extension of the authority of the Supervisory Board to issue Common Preferred Shares under grant rights (including options to purchase) on such shares until April 25, 2001. The proposal was approved by 6,931,913 (89.3%) votes for and 7,370 (0.09%) votes against with 4,750 (0.06%) abstentions and 814,498 (10.5%) non-votes. 9 Voting stockholders also approved the extension of the authority of the Supervisory Board to limit or exclude preemptive rights contained in the Articles of Association of the Company until April 25, 2001. The proposal was approved by 6,930,938 (89.3%) votes for and 5,620 (0.07%) votes against with 7,475 (1.0%) abstentions and 814,498 (10.5%) non-votes. Voting stockholders also approved the appointment of Arthur Andersen LLP as the Company's independent public auditors for the fiscal year ended December 31, 1996. The proposal was approved by 7,753,881 (99.9%) votes for and 1,150 (0.01%) votes against with 3,500 (0.05%) abstentions. ITEM 5. OTHER INFORMATION. None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits. INCORPORATED BY REFERENCE FROM THE EXHIBIT NO. EXHIBIT TITLE FOLLOWING DOCUMENTS 27.1 Financial Data Schedule Filed Herewith (b) Reports on Form 8-K. None SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant, Core Laboratories N.V., has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CORE LABORATORIES N.V. by: Core Laboratories International B.V. Dated: May 14, 1996 By: /S/ RICHARD L. BERGMARK Richard L. Bergmark Chief Financial Officer and Treasurer (Principal Financial Officer and Chief Accounting Officer) 11 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS DEC-31-1996 JAN-01-1996 MAR-31-1996 2,672 0 25,860 767 7,118 36,386 27,431 3,868 68,814 13,994 13,850 0 0 166 38,580 68,814 23,375 23,375 18,675 18,675 1,918 0 342 2,440 781 1,659 0 0 0 1,659 .18 .18
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