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[CONFORMED]
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[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 0-14334
XPLOR CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-3299127
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
1675 Broadway, Suite 2720, Denver, Colorado 80202
(Address of principal executive offices)
(303) 534-1101
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at May 1, 1996
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Common Stock $.01 par value 2,037,171 shares
Page 1 of 10 pages
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XPLOR CORPORATION AND SUBSIDIARY
INDEX
PAGE
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PART I. - FINANCIAL INFORMATION
Item 1. - Financial Statements (Unaudited)
(a) Consolidated Balance Sheets as of March
31, 1996, and December 31, 1995 3
(b) Consolidated Statements of Operations for
the three-month periods ended March 31,
1996, and March 31, 1995 4
(c) Consolidated Statements of Cash Flows for
the three-month periods ended March 31,
1996, and March 31, 1995 5
(d) Notes to Consolidated Financial Statements 6
Item 2. - Management's Discussion and Analysis of Financial
Condition and Results of Operation 7-8
PART II. - OTHER INFORMATION
Item 1. - Legal Proceedings 9
Item 6. - Exhibits and Reports on Form 8-K 9
Signatures 10
Page 2 of 10 pages
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XPLOR CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
March 31 December 31
1996 1995
-------- ------------
(In thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 2,762 $ 2,864
Accounts receivable and other 223 282
-------- --------
TOTAL CURRENT ASSETS 2,985 3,146
OIL AND GAS PROPERTIES AND EQUIPMENT (successful
efforts method), at cost 18,843 18,843
Less-accumulated depreciation, depletion,
amortization and impairment (16,438) (16,401)
-------- --------
2,405 2,442
INVESTMENT IN EQUITY SECURITIES 55 55
OTHER ASSETS 188 224
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TOTAL ASSETS $ 5,633 $ 5,867
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 286 $ 389
Accrued liabilities
Suspended revenues and settlements 197 197
Other 38 108
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TOTAL CURRENT LIABILITIES 521 694
DEFERRED INCOME TAXES 317 317
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TOTAL LIABILITIES 838 1,011
STOCKHOLDERS' EQUITY
Preferred Stock, par value $.01 per share--
authorized 1,000,000 shares; none issued
Common Stock, par value $.01 per share--
authorized 5,000,000 shares; 2,595,673
shares issued and outstanding 26 26
Additional paid-in capital 20,678 20,678
Accumulated deficit (13,148) (13,087)
-------- --------
7,556 7,617
Less cost of Common Stock in treasury--558,502
shares at March 31, 1996 and December 31, 1995 (2,761) (2,761)
-------- --------
TOTAL STOCKHOLDERS' EQUITY 4,795 4,856
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,633 $ 5,867
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SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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XPLOR CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Three Months
Ended Ended
March 31, 1996 March 31, 1995
-------------- --------------
(In thousands, except per share data)
REVENUES
Oil and gas sales $ 102 $ 101
Pipeline sales and fees 2 4
Oil field operation fees 29 29
Management fees 3 8
Interest income and other 37 7
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Total Revenues 173 149
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EXPENSES
Cost of oil and gas sales 59 87
Depreciation, depletion and amortization 38 34
General and administrative 138 127
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Total Expenses 235 248
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Loss before income taxes (62) (99)
PROVISION FOR INCOME TAXES -- --
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Net loss $ (62) $ (99)
=========== ===========
Net loss per common share and common
share equivalents $(.03) $(.05)
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WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 2,060,704 2,037,131
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SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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XPLOR CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Three Months
Ended Ended
March 31, 1996 March 31, 1995
-------------- --------------
(In thousands)
OPERATING ACTIVITIES
Net loss $ (62) $ (99)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation, depletion and amortization 38 34
Change in operating assets and liabilities:
Decrease in accounts receivable 59 7
Decrease in due from Parliament Hill
Corporation and affiliates -- (16)
Increase (decrease) in accounts payable (102) 110
Decrease in accrued liabilities (70) (13)
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Net cash provided by (used in)
operating activities (137) 23
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INVESTING ACTIVITIES
Proceeds from disposition of other assets 35 --
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Net cash provided by investing activities 35 --
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FINANCING ACTIVITIES -- --
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INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS (102) 23
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 2,864 418
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 2,762 $ 441
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SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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XPLOR CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Basis of Preparation of Financial Statements
The consolidated balance sheet as of March 31, 1996, and December 31, 1995,
and the consolidated statements of operations and cash flows for the three
months ended March 31, 1996 and 1995, have been prepared by the Company
without audit. In the opinion of management, all adjustments (which include
only normal recurring adjustments) considered necessary for a fair
presentation have been included. The results of operations for the
three-month periods ended March 31, 1996 and 1995, are not necessarily
indicative of the operating results for a full year.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these
condensed financial statements be read in conjunction with the financial
statements and notes thereto in the Company's Annual Report on Form 10-K for
the year ended December 31, 1995.
2. Accounting for Income Taxes
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS
109). Under SFAS 109, a deferred tax liability or asset is created when
temporary differences arise between the financial reporting basis and tax
basis of the Company's liabilities and assets, as measured by the statutory
tax rates in effect when such differences are expected to reverse. In
addition, deferred tax assets may result where the Company reasonably
expects to utilize existing tax net operating losses or tax credit
carryforwards. A valuation allowance must be established against any portion
of a deferred tax asset for which the Company believes it is more likely
than not the related tax benefit will not be realized. Components of the
Company's deferred tax assets and (liabilities) at December 31, 1995, were
as follows:
Loss carryforwards $ 339,000
Depreciation, depletion and amortization (656,000)
----------
Net deferred tax liability $ (317,000)
==========
The Company has net operating loss carryforwards available at December 31,
1995, aggregating $884,000 which expire in years 2006 through 2009.
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Item 2. XPLOR CORPORATION AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(a) Liquidity
At March 31, 1996, the Company had working capital of $2,464,000
compared with $2,452,000 at December 31, 1995, an increase of $12,000.
This increase is primarily attributable to the net decreases in accounts
receivable, payable and accrued liabilities. The ratio of current assets
to current liabilities at March 31, 1996, was 5.73 to 1 as compared with
4.53 to 1 at December 31, 1995.
Net cash used in operating activities during the three months ending
March 31, 1996, was $137,000, whereas $23,000 was provided by operating
activities for the same three-month period in 1995. During the first
quarter of 1996, the operating loss of $62,000 was reduced by $38,000 in
depreciation, depletion and amortization. Certain settlement funds
received in the first quarter of 1996 were attributable to the $59,000
decrease in accounts receivable. Decreases of $172,000 in accounts payable
and accrued liabilities were due to payments for properties acquired in
1995 and lower accruals for legal, accounting, and franchise taxes in
1996.
For the three months ended March 31, 1996, $35,000 was provided by
investing activities. These funds were received from a collateral bond
that was retired and no longer required by the State of Montana.
There were no funds used for or provided by financing activities
during the first quarter of 1996.
(b) Capital Resources
As of March 31, 1996, the Company did not have any material
commitments for capital expenditures. However, the Company plans to use a
portion of its funds for the acquisition of producing properties and/or
existing energy-related companies when appropriate opportunities on
suitable terms can be identified. Several producing property and company
acquisition possibilities are currently under consideration by management.
(c) Results of Operations
For the quarter ended March 31, 1996, the loss of $62,000 represented
a $37,000 reduction of the $99,000 loss for the first quarter of 1995. The
decrease was primarily attributable to the net
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effect of a $30,000 increase in interest income, a $28,000 decrease in the
cost of oil and gas sales and an $11,000 increase in general and
administrative expenses when measured against the three months ending
March 31, 1995.
First quarter 1996 oil and gas revenues of $102,000 were comparable
to last year's sales of $101,000. Though production from the Company's
owned and operated wells in West Virginia declined, the average price
increased by $.42 per MCF, resulting in a minor increase in gross revenues
for these wells. Income from the Company's non-operated wells was
comparable with last year's sales. The increased demand for energy
experienced during the 1995-1996 winter heating season contributed to an
increase in prices for both oil and natural gas. The near-term outlook for
the domestic energy industry has improved, and it is anticipated that
average wellhead prices for oil and natural gas in 1996 will be above the
levels of 1995. Income from the Company's non-operated wells was
comparable with last year's sales.
For the quarter ended March 31, 1996, the cost of oil and gas sales
of 58% relative to sales decreased by 28% as compared with the same period
last year which was due to special well repairs for non-operated wells
incurred last year. The depletion rate of 37%, as a percentage of sales,
was comparable with last year's rate of 34%.
General and administrative expenses increased by $11,000, or 8%, as
compared with last year, primarily due to increases in out-side consulting
expenses.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The company is not a party to any material litigation.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - none.
(b) During the quarter ended March 31, 1996, the Company did not file any
reports on Form 8-K.
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S I G N A T U R E S
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 under-
signed thereunto duly authorized.
XPLOR CORPORATION
Dated: May 13, 1996 BY: /s/ James E. Gayle
-----------------------------------------
James E. Gayle
(Chief Executive Officer)
Dated: May 13, 1996 BY: /s/ Robert M. Olmsted
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Robert M. Olmsted
(Principal Accounting Officer)
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EXHIBIT INDEX
Exhibit No. Description
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27 Financial Data Schedule