Delaware
|
11-2908692
|
|||
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
|||
7908
N. Sam Houston Parkway W., 5th
Floor
|
||||
Houston,
Texas
|
77064
|
|||
(Address
of principal executive offices)
|
(Zip
Code)
|
Large
Accelerated Filer ¨
|
Accelerated
Filer ¨
|
Non-Accelerated
Filer x
|
Page
|
||
Item
1.
|
||
3
|
||
4
|
||
5
|
||
6
|
||
7
|
||
Item
2.
|
15
|
|
Item
3.
|
21
|
|
Item
4.
|
21
|
|
PART
II
OTHER
INFORMATION
|
||
Item
1.
|
22
|
|
Item
1A.
|
22
|
|
Item
2.
|
23
|
|
Item
3.
|
23
|
|
Item
4.
|
23
|
|
Item
5.
|
23
|
|
Item
6.
|
23
|
ASSETS
|
||||||||
March
31,
2007
|
December
31,
2006
|
|||||||
(unaudited)
|
||||||||
CURRENT
ASSETS:
|
||||||||
Cash and
cash equivalents
|
$ |
3,972
|
$ |
5,033
|
||||
Restricted
cash
|
51
|
303
|
||||||
Receivables,
net
|
32,683
|
41,319
|
||||||
Inventory
|
936
|
965
|
||||||
Prepaid
expenses and other current assets
|
5,212
|
4,727
|
||||||
Total
current assets
|
42,854
|
52,347
|
||||||
PROPERTY
AND EQUIPMENT, net
|
45,884
|
43,790
|
||||||
GOODWILL
|
4,326
|
4,393
|
||||||
OTHER
ASSETS
|
471
|
487
|
||||||
Total
assets
|
$ |
93,535
|
$ |
101,017
|
||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
CURRENT
LIABILITIES:
|
||||||||
Current
maturities of long-term debt
|
$ |
1,940
|
$ |
1,940
|
||||
Accounts
payable
|
7,933
|
7,475
|
||||||
Foreign
income tax payable
|
1,352
|
5,020
|
||||||
Accrued
liabilities
|
6,788
|
12,400
|
||||||
Total
current liabilities
|
18,013
|
26,835
|
||||||
LONG-TERM
DEBT AND NOTES PAYABLE, net of current maturities
|
29,772
|
29,492
|
||||||
DEFERRED
TAXES
|
4,520
|
4,520
|
||||||
OTHER
LIABILITIES
|
1,646
|
1,748
|
||||||
Total
liabilities
|
53,951
|
62,595
|
||||||
COMMITMENTS
AND CONTINGENCIES (Note G)
|
—
|
—
|
||||||
STOCKHOLDERS'
EQUITY:
|
||||||||
Preferred
stock ($.00001 par value, 5,000,000 shares authorized, 0
shares issued and outstanding at March 31, 2007 and
December 31, 2006, respectively)
|
—
|
—
|
||||||
Common
stock ($.00001 par value, 125,000,000 shares authorized, 59,791,000
and 59,186,000 shares issued and outstanding at March
31, 2007 and December 31, 2006, respectively)
|
1
|
1
|
||||||
Additional
paid-in capital
|
95,177
|
94,479
|
||||||
Accumulated
other comprehensive loss
|
(1,234 | ) | (1,234 | ) | ||||
Accumulated
deficit
|
(54,360 | ) | (54,824 | ) | ||||
Total
stockholders' equity
|
39,584
|
38,422
|
||||||
Total
liabilities and stockholders' equity
|
$ |
93,535
|
$ |
101,017
|
Three
Months Ended
March
31,
|
||||||||
2007
|
2006
|
|||||||
REVENUES
|
$ |
22,257
|
$ |
11,520
|
||||
COST
OF SALES, excluding depreciation and amortization
|
13,995
|
5,300
|
||||||
Gross
Margin
|
8,262
|
6,220
|
||||||
OPERATING
EXPENSES
|
4,459
|
2,870
|
||||||
SELLING,
GENERAL AND ADMINISTRATIVE EXPENSES
|
1,003
|
818
|
||||||
FOREIGN
CURRENCY TRANSLATION
|
68
|
18
|
||||||
DEPRECIATION
AND AMORTIZATION
|
1,314
|
572
|
||||||
OPERATING
INCOME
|
1,418
|
1,942
|
||||||
INTEREST
EXPENSE, net
|
733
|
557
|
||||||
INCOME BEFORE
INCOME TAXES
|
685
|
1,385
|
||||||
INCOME
TAX EXPENSE
|
221
|
707
|
||||||
NET
INCOME
|
464
|
678
|
||||||
PREFERRED
DIVIDEND REQUIREMENTS AND ACCRETIONS
|
—
|
(616 | ) | |||||
NET
INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS
|
$ |
464
|
$ |
1,294
|
||||
Basic
Earnings per Common Share:
|
$ |
0.01
|
$ |
0.03
|
||||
Weighted
Average Common Shares Outstanding – Basic:
|
59,203,000
|
38,789,000
|
||||||
Diluted
Earnings per Common Share:
|
$ |
0.01
|
$ |
0.03
|
||||
Weighted
Average Common Shares Outstanding – Diluted:
|
61,642,000
|
41,383,000
|
Preferred
Stock
|
Common
Stock
|
Additional
Paid - in
|
Accumulated
|
Accumulated
Other Comprehensive
|
Total
Stockholders’
|
|||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Loss
|
Equity
|
|||||||||||||||||||||||||
BALANCES,
December 31, 2006
|
0
|
$ |
—
|
59,186
|
$ |
1
|
$ |
94,479
|
$ | (54,824 | ) | $ | (1,234 | ) | $ |
38,422
|
||||||||||||||||
Common
stock options exercised
|
—
|
—
|
394
|
—
|
351
|
—
|
—
|
351
|
||||||||||||||||||||||||
Restricted
common stock issued
|
—
|
—
|
211
|
—
|
44
|
—
|
—
|
44
|
||||||||||||||||||||||||
Stock
based compensation
|
—
|
—
|
—
|
—
|
303
|
—
|
—
|
303
|
||||||||||||||||||||||||
Net
income
|
—
|
—
|
—
|
—
|
—
|
464
|
—
|
464
|
||||||||||||||||||||||||
BALANCES, March
31, 2007
|
—
|
$ |
—
|
59,791
|
$ |
1
|
$ |
95,177
|
$ | (54,360 | ) | $ | (1,234 | ) | $ |
39,584
|
Three
Months Ended
March
31,
|
||||||||
2007
|
2006
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net
income
|
$ |
464
|
$ |
678
|
||||
Adjustments
to reconcile net income to net cash provided by (used in) operating
activities:
|
||||||||
Depreciation
and amortization
|
1,314
|
572
|
||||||
Stock
based compensation
|
303
|
412
|
||||||
Reversal
of bad debt
|
—
|
(118 | ) | |||||
Troubled
debt restructuring interest accrual
|
—
|
(598 | ) | |||||
Amortization
of deferred loan costs
|
—
|
809
|
||||||
Other
non-cash charges
|
44
|
11
|
||||||
Gain
on sale of Asset
|
(130 | ) |
—
|
|||||
Changes
in operating assets and liabilities, net of effects of
acquisition:
|
||||||||
Receivables
|
8,636
|
(2,974 | ) | |||||
Inventory
|
29
|
(12 | ) | |||||
Prepaid
expenses and current assets
|
(233 | ) | (2,871 | ) | ||||
Other
assets
|
83
|
491
|
||||||
Accounts
payable and accrued liabilities
|
(8,924 | ) |
1,596
|
|||||
Net
cash provided by (used in) operating activities
|
1,586
|
(2,004 | ) | |||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Cash
acquired in connection with acquisition
|
—
|
4,345
|
||||||
Property
and equipment additions
|
(3,461 | ) | (195 | ) | ||||
Proceeds
from sale of property and equipment
|
183
|
12
|
||||||
Net
cash provided by (used in) investing activities
|
(3,278 | ) |
4,162
|
|||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Payments
of senior debt
|
—
|
(750 | ) | |||||
Payments
of subordinated debt
|
—
|
(5,100 | ) | |||||
Payments
of term loan
|
(927 | ) |
—
|
|||||
Revolving
credit borrowings
|
1,207
|
750
|
||||||
Proceeds
from term loan
|
—
|
9,700
|
||||||
Redemption
of preferred stock
|
—
|
(5,299 | ) | |||||
Stock
options exercised
|
351
|
122
|
||||||
Net
cash provided by (used in) financing activities
|
631
|
(577 | ) | |||||
Net
increase (decrease) in cash and cash equivalents
|
(1,061 | ) |
1,581
|
|||||
CASH
AND CASH EQUIVALENTS, beginning of period
|
5,033
|
2,564
|
||||||
CASH
AND CASH EQUIVALENTS, end of period
|
$ |
3,972
|
$ |
4,145
|
||||
SUPPLEMENTAL
CASH FLOW DISCLOSURES:
|
||||||||
Cash
paid for interest
|
$ |
755
|
$ |
277
|
||||
Cash
paid for income taxes
|
3,885
|
1,193
|
||||||
NON-CASH
INVESTING AND FINANCING ACTIVITIES:
|
||||||||
Preferred
stock dividends accrued (reversed)
|
—
|
(616 | ) | |||||
Common
stock issued for acquisition of business
|
—
|
26,462
|
||||||
Conversion
of preferred stock
|
—
|
1,936
|
||||||
Long-term
notes issued for acquisition of business
|
—
|
21,614
|
March
31, 2007
|
December
31, 2006
|
|||||||
(unaudited)
|
||||||||
Accounts
receivable, net:
|
||||||||
Trade
|
$ |
19,175
|
$ |
27,301
|
||||
Unbilled
Revenue
|
13,157
|
13,656
|
||||||
Other
|
707
|
718
|
||||||
Allowance
for doubtful accounts
|
(356 | ) | (356 | ) | ||||
$ |
32,683
|
$ |
41,319
|
March
31, 2007
|
December
31, 2006
|
|||||||
(unaudited)
|
||||||||
Property
and equipment, net:
|
||||||||
Land
|
$ |
571
|
$ |
571
|
||||
Leasehold
|
2,921
|
2,895
|
||||||
Equipment
|
36,020
|
35,840
|
||||||
Firefighting
equipment
|
5,865
|
5,841
|
||||||
Furniture,
fixtures and office
|
1,831
|
1,884
|
||||||
Vehicles
|
1,396
|
1,308
|
||||||
Construction
in progress
|
8,675
|
5,995
|
||||||
Total
property and equipment
|
57,279
|
54,334
|
||||||
Less: Accumulated
depreciation
|
(11,395 | ) | (10,544 | ) | ||||
$ |
45,884
|
$ |
43,790
|
March
31, 2007
|
December
31, 2006
|
|||||||
(unaudited)
|
||||||||
Prepaid
expenses and other current assets:
|
||||||||
Prepaid
taxes
|
$ |
1,995
|
$ |
1,509
|
||||
Prepaid
insurance
|
1,161
|
1,794
|
||||||
Other
prepaid expenses and current assets
|
2,056
|
1,424
|
||||||
$ |
5,212
|
$ |
4,727
|
March
31, 2007
|
December
31, 2006
|
|||||||
(unaudited)
|
||||||||
Accrued
liabilities:
|
||||||||
Accrued
compensation and benefits
|
$ |
1,611
|
$ |
4,914
|
||||
Accrued
insurance
|
175
|
1,046
|
||||||
Accrued
taxes, other than foreign income tax
|
2,694
|
2,617
|
||||||
Other
accrued liabilities
|
2,308
|
3,823
|
||||||
$ |
6,788
|
$ |
12,400
|
Current
assets (excluding cash)
|
$ |
15,299
|
||
Property
and equipment
|
39,645
|
|||
Goodwill
|
4,326
|
|||
Total
assets acquired
|
59,270
|
|||
Current
liabilities
|
9,505
|
|||
Deferred
taxes
|
5,110
|
|||
Total
liabilities assumed
|
14,615
|
|||
Net
assets acquired
|
$ |
44,655
|
Three
Months Ended
March
31,
|
||||
2006
|
||||
Revenue
|
$ |
20,064
|
||
Operating
Income
|
3,420
|
|||
Net
Income
|
1,444
|
|||
Basic
Earnings Per Share
|
0.02
|
|||
Diluted
Earnings Per Share
|
0.02
|
|||
Basic
Shares Outstanding
|
58,123
|
|||
Diluted
Shares Outstanding
|
60,716
|
March
31, 2007
|
December
31, 2006
|
|||||||
(Unaudited)
|
||||||||
U.S.
revolving credit facility, with available commitments up to $10.3
million,
a borrowing base of $7.2 million and an average interest rate of
8.25% for
the three month period ended March 31, 2007
|
$ |
3,124
|
$ |
1,917
|
||||
U.S.
term credit facility with initial borrowings of $9.7 million, payable
over
60 months and an average interest rate of 8.75% for the three month
period
ended March, 31, 2007
|
7,422
|
8,349
|
||||||
Subordinated
unsecured debt issued to Oil States Energy Services, Inc. with a
fixed
interest rate of 10%
|
21,166
|
21,166
|
||||||
Total
debt
|
31,712
|
31,432
|
||||||
Less:
current maturities
|
(1,940 | ) | (1,940 | ) | ||||
Total
long-term debt
|
$ |
29,772
|
$ |
29,492
|
Three
Months Ended
March
31,
(unaudited)
|
||||||||
2007
|
2006
|
|||||||
Numerator:
|
||||||||
For
basic and diluted earnings per share:
|
||||||||
Net
income attributable to common stockholders
|
$ |
464
|
$ |
1,294
|
||||
Denominator:
|
||||||||
For
basic earnings per share-weighted-average shares
|
59,203
|
38,789
|
||||||
Effect
of Dilutive Securities:
|
||||||||
Stock
options,warrants, and restricted shares
|
2,439
|
2,594
|
||||||
Denominator:
|
||||||||
For
diluted earnings per share – weighted-average shares
|
61,642
|
41,383
|
Three
Months Ended
March
31,
|
|||
2007
|
2006
|
||
Risk-free
interest rate
|
N/A
|
4.56%
|
|
Expected
dividend yield
|
N/A
|
―
|
|
Expected
option life
|
N/A
|
6.5
yrs
|
|
Expected
volatility
|
N/A
|
95.1%
|
|
Weighted
average fair value of options granted at market value
|
N/A
|
$ 1.12
|
|
Forfeiture
rate
|
N/A
|
2.7%
|
Well
Intervention
|
Response
|
Consolidated
|
||||||||||
Three
Months Ended March 31, 2007:
|
||||||||||||
Operating
Revenues
|
$ |
20,844
|
$ |
1,413
|
$ |
22,257
|
||||||
Operating
Income(1) (2)
|
1,064
|
354
|
1,418
|
|||||||||
Identifiable
Operating Assets
|
84,052
|
9,483
|
93,535
|
|||||||||
Capital
Expenditures
|
3,375
|
86
|
3,461
|
|||||||||
Depreciation
and Amortization(1)
|
1,299
|
15
|
1,314
|
|||||||||
Three
Months Ended March 31, 2006:
|
||||||||||||
Operating
Revenues
|
$ |
10,031
|
$ |
1,489
|
$ |
11,520
|
||||||
Operating
Income (loss)(1) (2)
|
1,407
|
535
|
1,942
|
|||||||||
Identifiable
Operating Assets
|
75,342
|
4,272
|
79,614
|
|||||||||
Capital
Expenditures
|
121
|
74
|
195
|
|||||||||
Depreciation
and Amortization(1)
|
545
|
27
|
572
|
|
(1)
|
Operating
expenses and depreciation and amortization have been charged to each
segment based upon specific identification of expenses and an allocation
of remaining non-segment specific expenses pro rata between segments
based
upon relative revenues.
|
|
(2)
|
Selling,
general and administrative and corporate expenses have been allocated
between segments in proportion to their relative
revenue.
|
Three
Months Ended
March
31,
|
||||||||
2007
|
2006
|
|||||||
Revenues
|
||||||||
Well
Intervention
|
$ |
20,844
|
$ |
10,031
|
||||
Response
|
1,413
|
1,489
|
||||||
$ |
22,257
|
$ |
11,520
|
|||||
Cost
of Sales
|
||||||||
Well
Intervention
|
$ |
13,801
|
$ |
5,009
|
||||
Response
|
194
|
291
|
||||||
$ |
13,995
|
$ |
5,300
|
|||||
Operating
Expenses(1)
|
||||||||
Well
Intervention
|
$ |
3,673
|
$ |
2,340
|
||||
Response
|
786
|
530
|
||||||
$ |
4,459
|
$ |
2,870
|
|||||
Selling,
General and Administrative Expenses(2)
|
||||||||
Well
Intervention
|
$ |
1,007
|
$ |
730
|
||||
Response
|
64
|
106
|
||||||
$ |
1,071
|
$ |
836
|
|||||
Depreciation
and Amortization(1)
|
||||||||
Well
Intervention
|
$ |
1,299
|
$ |
545
|
||||
Response
|
15
|
27
|
||||||
$ |
1,314
|
$ |
572
|
|||||
Operating
Income
|
||||||||
Well
Intervention
|
$ |
1,064
|
$ |
1,407
|
||||
Response
|
354
|
535
|
||||||
$ |
1,418
|
$ |
1,942
|
|
(1)
|
Operating
expenses and depreciation and amortization have been charged to
each
segment based upon specific identification of expenses and an allocation
of remaining non-segment specific expenses pro rata between segments
based
upon relative revenues.
|
|
(2)
|
Selling,
general and administrative expenses have been allocated pro rata
between
segments based upon relative revenues and includes foreign exchange
translation gains and losses.
|
Future
Commitments (000's)
|
||||||||||||||||
Description
|
Total
|
Less
than 1 year
|
1-3years
|
3-5
years
|
||||||||||||
Long
and short term debt and notes payable
|
||||||||||||||||
Term
loan
|
$ |
7,422
|
$ |
1,940
|
$ |
3,880
|
$ |
1,602
|
||||||||
Revolving
credit facility
|
$ |
3,124
|
$ |
3,124
|
||||||||||||
Subordinated
debt (a)
|
$ |
21,166
|
—
|
—
|
$ |
21,166
|
||||||||||
Future
minimum lease payments
|
$ |
2,129
|
$ |
594
|
$ |
764
|
$ |
771
|
||||||||
Total
commitments
|
$ |
33,841
|
$ |
2,534
|
$ |
4,644
|
$ |
26,663
|
(a)
|
Exhibits
|
Exhibit
No.
|
Document
|
|
§302
Certification by Jerry Winchester
|
||
§302
Certification by Gabriel Aldape
|
||
§906
Certification by Jerry Winchester
|
||
§906
Certification by Gabriel Aldape
|
BOOTS
& COOTS INTERNATIONAL
|
|||
WELL
CONTROL, INC.
|
|||
By:
|
/s/
JERRY WINCHESTER
|
||
Jerry
Winchester
|
|||
Chief
Executive Officer
|
|||
By:
|
/s/Gabriel
Aldape
|
||
Gabriel
Aldape
|
|||
Chief
Financial Officer Principal Accounting
Officer
|