-----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, KFZB2LZOp68QUd4wZFOukLfBsPEZTUDervICsAIStBCYJO8ExfxaRFHaWTt/bK8V gT2ngoFRFwkEFpI8xa+YvQ== 0000890566-96-001811.txt : 19961113 0000890566-96-001811.hdr.sgml : 19961113 ACCESSION NUMBER: 0000890566-96-001811 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961112 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CORE LABORATORIES N V CENTRAL INDEX KEY: 0001000229 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-TESTING LABORATORIES [8734] 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: 96658598 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 FORM 10-Q ============================================================================== 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 September 30, 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 Identification No.) incorporation or organization) 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 November 8, 1996 was 9,467,300. ============================================================================== CORE LABORATORIES N.V. FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1996 INDEX Page Part I -- Financial Information Item 1 -- Financial Statements Consolidated Balance Sheets at September 30, 1996 and December 31, 1995 .......................................... 1 Consolidated Income Statements for the Three Months Ended September 30, 1996 and 1995 ................................ 2 Consolidated Income Statements for the Nine Months Ended September 30, 1996 and 1995................................. 3 Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 1996 and 1995 ............................... 4 Notes to Consolidated Financial Statements ................... 5 Item 2 -- Management's Discussion and Analysis of Financial Condition and Results of Operations ................. 7 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......................................... 9 Item 6-- Exhibits and Reports on Form 8-K ....................... 9 Signature .......................................................... 10 i CORE LABORATORIES N.V. CONSOLIDATED BALANCE SHEETS (in thousands of dollars, except share data)
September 30, December 31, 1996 1995 ------------ ------------ ASSETS (Unaudited) (Audited) CURRENT ASSETS: Cash and cash equivalents ........................................ $ 1,469 $ 4,326 Accounts receivable, net ......................................... 23,419 22,540 Inventories ...................................................... 8,757 8,135 Prepaid expenses and other ....................................... 900 1,039 Deferred tax assets .............................................. 319 320 -------- -------- Total current assets ................................................ 34,864 36,360 PROPERTY, PLANT AND EQUIPMENT ....................................... 30,923 22,964 Less-- accumulated depreciation .................................. (5,959) (2,926) -------- -------- 24,964 20,038 INTANGIBLES AND GOODWILL, net ....................................... 8,221 8,513 DEFERRED DEBT COST, net ............................................. 46 35 LONG-TERM INVESTMENT ................................................ 250 400 -------- -------- Total assets .................................................. $ 68,345 $ 65,346 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities of long-term debt ............................. $ 3,860 $ 2,500 Short-term debt .................................................. -- 190 Accounts payable ................................................. 3,342 5,430 Accrued payroll and related costs ................................ 2,138 2,974 Accrued income taxes payable ..................................... 781 613 Other accrued expenses ........................................... 1,693 2,461 -------- -------- Total current liabilities ........................................... 11,814 14,168 LONG-TERM DEBT ...................................................... 11,920 11,875 DEFERRED TAX LIABILITIES ............................................ 611 611 OTHER LONG-TERM LIABILITIES ......................................... 1,131 1,509 MINORITY INTEREST ................................................... 107 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 ................................................ 10,236 4,561 -------- -------- Total shareholders' equity .................................... 42,762 37,087 -------- -------- Total liabilities and shareholders' equity ................. $ 68,345 $ 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 September 30, -------------------------- 1996 1995 ----------- ----------- (Unaudited) (Unaudited) SERVICES ........................................... $ 17,537 $ 13,361 SALES .............................................. 4,514 8,060 ----------- ----------- 22,051 21,421 OPERATING EXPENSES: Costs of services ............................... 13,258 10,725 Costs of sales .................................. 3,845 6,505 General and administrative expenses ............. 840 757 Depreciation and amortization ................... 1,034 766 Other income, net ............................... (335) (45) ----------- ----------- 18,642 18,708 INCOME BEFORE INTEREST EXPENSE, INCOME TAX EXPENSE AND EXTRAORDINARY ITEM .................. 3,409 2,713 INTEREST EXPENSE ................................... 300 990 ----------- ----------- INCOME BEFORE INCOME TAX EXPENSE AND EXTRAORDINARY ITEM .......................... 3,109 1,723 INCOME TAX EXPENSE ................................. 995 528 ----------- ----------- INCOME BEFORE EXTRAORDINARY ITEM ................... 2,114 1,195 EXTRAORDINARY ITEM, net of taxes of $400 ........... -- (911) ----------- ----------- NET INCOME ......................................... 2,114 284 LESS - Net income applicable to preferred loan stock -- (111) ----------- ----------- NET INCOME APPLICABLE TO COMMON SHARES ............. $ 2,114 $ 173 =========== =========== PER SHARE DATA: Income before extraordinary item ................ $ .22 $ .15 Extraordinary item .............................. -- (.13) ----------- ----------- Net income per share ............................ $ .22 $ .02 =========== =========== WEIGHTED AVERAGE SHARES OUTSTANDING ................ 9,532,514 7,001,583 =========== =========== The accompanying notes to consolidated financial statements are an integral part of these consolidated financial statements. 2 CORE LABORATORIES N.V. CONSOLIDATED INCOME STATEMENTS (In thousands of dollars, except share and per share data) Nine Months Ended September 30, ------------------------- 1996 1995 ----------- ----------- (Unaudited) (Unaudited) ----------- ----------- SERVICES ........................................... $ 50,695 $ 40,852 SALES .............................................. 18,155 16,998 ----------- ----------- 68,850 57,850 OPERATING EXPENSES: Costs of services ............................... 39,338 32,548 Costs of sales .................................. 14,867 13,772 General and administrative expenses ............. 2,717 2,035 Depreciation and amortization ................... 3,030 2,140 Other income, net ............................... (382) (131) ----------- ----------- 59,570 50,364 INCOME BEFORE INTEREST EXPENSE, INCOME TAX EXPENSE AND EXTRAORDINARY ITEM .............. 9,280 7,486 INTEREST EXPENSE ................................... 934 2,663 ----------- ----------- INCOME BEFORE INCOME TAX EXPENSE AND EXTRAORDINARY ITEM .......................... 8,346 4,823 INCOME TAX EXPENSE ................................. 2,671 1,471 INCOME BEFORE EXTRAORDINARY ITEM ................... 5,675 3,352 EXTRAORDINARY ITEM, net of taxes of $400 ........... -- (911) ----------- ----------- NET INCOME ......................................... 5,675 2,441 LESS - Net income applicable to preferred loan stock -- (336) ----------- ----------- NET INCOME APPLICABLE TO COMMON SHARES ............. $ 5,675 $ 2,105 =========== =========== PER SHARE DATA: Income before extraordinary item ................ $ .60 $ .44 Extraordinary item .............................. -- (.13) ----------- ----------- Net income per share ............................ $ .60 $ .31 =========== =========== WEIGHTED AVERAGE SHARES OUTSTANDING ................ 9,532,514 6,779,621 =========== =========== The accompanying notes to consolidated financial statements are an integral part of these consolidated financial statements. 3 CORE LABORATORIES N.V. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands of dollars) Nine Months Ended September 30, ------------------- 1996 1995 ------- -------- (Unaudited)(Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES: Net income ............................................. $ 5,675 $ 2,441 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation ........................................ 2,737 1,924 Amortization ........................................ 300 374 Loss on early extinguishment of debt, net of taxes .. -- 911 Gain on sale of fixed assets ........................ -- (26) Changes in assets and liabilities: Decrease (increase) in accounts receivable .......... 577 (2,199) Decrease (increase) in inventories ........................ (622) 1,134 Decrease in prepaid expenses and other .............. 150 57 Increase (decrease) in accounts payable ............. (2,409) 1,275 Increase (decrease) in accrued payroll .............. (956) 578 Increase (decrease) in accrued income taxes payable . 168 (137) Decrease in other accrued expenses .................. (1,144) (2,190) Decrease in other long-term liabilities ............. (378) (139) Other ............................................... 1 193 ------- -------- Net cash provided by operating activities ........ 4,099 4,196 ------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of fixed assets ..................... -- 1,234 Capital expenditures ................................... (3,991) (1,556) Acquisition of Gulf States Analytical, Inc. ............ (4,310) -- Acquisition of Pastech, Inc., net of cash acquired ..... -- (5,017) Return on investment in China Corelab Ltd. ............. 150 -- Final payment for business acquired from Western Atlas International, Inc. .................................. -- (1,778) ------- -------- Net cash used in investing activities ............... (8,151) (7,117) ------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Payments on long-term debt ............................. (8,495) (31,000) Borrowings under long-term debt ........................ 9,900 12,500 Decrease in short-term debt ............................ (190) (1,050) Net proceeds from initial public offering .............. -- 30,026 Retirement of preferred loan stock ..................... -- (7,500) Prepayment penalty on long-term debt ................... -- (140) Dividends paid on preferred loan stock ................. -- (449) Other .................................................. (20) -- ------- -------- Net cash provided by financing activities ........... 1,195 2,387 ------- -------- NET CHANGE IN CASH ........................................ (2,857) (534) CASH, beginning of period ................................. 4,326 2,698 ------- -------- CASH, end of period ....................................... $ 1,469 $ 2,164 ======= ======== The accompanying notes to consolidated financial statements are an integral part of these consolidated financial statements. 4 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 and nine month periods ended September 30, 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 taken 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): September 30, December 31, 1996 1995 ------ ------ (Unaudited) (Audited) Parts and materials ..................... $4,063 $3,468 Work in process ......................... 4,694 4,667 Total ............................. $8,757 $8,135 ------ ------ 5 CORE LABORATORIES N.V. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- Continued (Unaudited) 3. LONG-TERM DEBT Long-term debt at September 30, 1996 and December 31, 1995 is summarized in the following table (in thousands): September 30, December 31, 1996 1995 ------- ------- (Unaudited) (Audited) Unsecured Credit Agreement with a bank group: $14,000 term loan facility .................... $10,000 $11,875 $7,500 revolving credit facility .............. -- 2,500 $15,000 uncommitted guidance facility ......... 5,780 -- ------- ------- Total debt ................................. 15,780 14,375 Less-- current maturities ..................... 3,860 2,500 ------- ------- Total long-term debt .................... $11,920 $11,875 ======= ======= 6 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. 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 Nine Months Ended September 30, September 30, ------------------------------ --------------------------- Percentage of Percentage of Total Revenue Total Revenue ------------- % Increase ------------- % Increase 1996 1995 (Decrease) 1996 1995 (Decrease) ------- ------ ---------- ------ ------ ----------- Services ........................ 79.5 62.4 31.3 73.6 70.6 24.1 Sales .......................... 20.5 37.6 (44.0) 26.4 29.4 6.8 ---- ---- ---- ---- 100.0 100.0 2.9 100.0 100.0 19.0 Operating expenses: Cost of services ............. 60.1 50.0 23.6 57.1 56.3 20.9 Cost of sales ............... 17.4 30.4 (40.9) 21.6 23.8 8.0 General and administrative expenses....... 3.8 3.5 11.0 4.0 3.5 33.5 Depreciation and amortization....... 4.7 3.6 35.0 4.4 3.7 41.6 Other income, net............. (1.5) (.2) * (.6) (.2) * ---- ---- ---- ---- 84.5 87.3 (.4) 86.5 87.1 18.3 Income before interest expense, income tax expense and extraordinary item...... 15.5 12.7 25.7 13.5 12.9 24.0 Interest expense................. 1.4 4.6 (69.7) 1.4 4.6 (64.9) ---- ---- ---- ---- Income before income tax expense and extraordinary item........ 14.1 8.1 80.4 12.1 8.3 73.0 Income tax expense............... 4.5 2.5 88.4 3.9 2.5 81.6 ---- ---- ---- ---- Income before extraordinary item..... 9.6 5.6 76.9 8.2 5.8 69.3 ==== ==== ==== ====
* Percentage not meaningful. Services revenue for three months ended September 30, 1996 increased 31.3% to $17.5 million. Services revenue for the nine month period ended September 30, 1996 was up 24.1% or $9.8 million. The increases were primarily due to (i) increased worldwide demand for reservoir core and fluids 7 analysis, and (ii) additional revenue from the December 22, 1995 acquisition of four laboratories from PACE Incorporated ("PACE Labs") and the January 5, 1996 acquisition of Gulf States Analytical, Inc. ("GSAI"). These increases were slightly off-set by increased price competition in certain laboratory testing markets. Sales revenue for the three month period ended September 30, 1996 decreased 44.0% or $3.5 million compared to the same period of the prior year. Sales revenue for nine months ended September 30, 1996 increased 6.8% to $18.2 million compared to a year ago. The decrease in sales revenue for the quarter ended September 30, 1996 reflects decreased sales of integrated octane-measuring and process analyzer systems due to a weaker US refining market. The increase in sales revenue for the current year nine month period was primarily due to (i) additional revenue from the July 19, 1995 acquisition of Pastech, Inc. ("Pastech"), and (ii) increased demand for the Company's proprietary reservoir core and fluids analysis equipment and systems. The increase for the nine months ended was partially off-set by decreased sales of integrated octane-measuring and process analyzer systems due to a weaker US refining market. Costs of services as a percentage of services revenue for the three and nine months ended September 30, 1996 improved slightly compared to a year ago, due to improved cost savings and efficiencies. Costs of sales as a percentage of sales revenue for the three and nine months ended September 30, 1996 weakened slightly compared to a year ago, due to decreased sales during third quarter 1996. General and administrative expenses for the quarter ended September 30, 1996 were flat compared to the prior year. General and administrative expenses for nine months ended September 30, 1996 were up $0.7 million compared to the corresponding period in 1995, 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 and nine month periods ended September 30, 1996 increased $0.3 million and $0.9 million respectively compared to a year ago primarily due to capital expenditures for new equipment and the acquisitions of Pastech, PACE Labs, and GSAI. Other income for the three and nine months ended September 30, 1996 increased $.3 million, primarily due to remuneration from the State of California for property taken through rights of eminent domain in connection with road construction. Interest expense for the three and nine months ended September 30, 1996 decreased 69.7% and 64.9% respectively compared to 1995. The decreases were primarily due to a reduction in debt after the initial public offering of 2.8 million common shares in September 1995. The Company's effective income tax rate was approximately 32.0% for the three and nine months ended September 30, 1996 compared to 30.5% for three and nine months ended September 30, 1995. LIQUIDITY AND CAPITAL RESOURCES The Company's primary capital requirements are for working capital, capital expenditures and acquisitions. For the nine month period ended September 30, 1996 the Company had operating cash flow of $4.1 million compared to $4.2 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. 8 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. None. ITEM 5. OTHER INFORMATION. None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits. Incorporated by Exhibit Reference from the No. Exhibit Title Following Documents - ------- ----------------------- ------------------- 27.1 Financial Data Schedule Filed Herewith (b) Reports on Form 8-K. None 9 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: November 12, 1996 By: /s/ Richard L. Bergmark Richard L. Bergmark Chief Financial Officer and Treasurer (Principal Financial Officer and Chief Accounting Officer) 10 EX-27 2
5 9-MOS DEC-31-1996 SEP-30-1996 1,469 0 24,169 (750) 8,757 34,864 30,923 (5,959) 68,345 11,814 0 0 0 166 42,596 68,345 68,850 68,850 54,205 54,205 5,365 0 934 8,346 2,671 5,675 0 0 0 5,675 .60 .60
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