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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED MARCH 31, 2001
_______________
COMMISSION FILE NUMBER 1-13817
BOOTS & COOTS INTERNATIONAL
WELL CONTROL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 11-2908692
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
777 POST OAK BOULEVARD, SUITE 800
HOUSTON, TEXAS 77056
(Address of principal executive offices) (Zip Code)
(713) 621-7911
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 [ ]
The number of shares of the Registrant's Common Stock, par value $.00001
per share, outstanding at May 11, 2001, was 40,672,090.
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BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.
TABLE OF CONTENTS
PART I
PAGE
----
Item 1. Financial Information . . . . . . . . . . . . . . . . . . . 3
Consolidated Balance Sheets . . . . . . . . . . . . . . . 3
Consolidated Statements of Operations . . . . . . . . . . 4
Consolidated Statements of Shareholders' Equity. . . . . 5
Consolidated Statements of Cash Flows. . . . . . . . . . 6
Notes to Consolidated Financial Statements . . . . . . . 7-11
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . . . . 12-16
Item 3. Quantitative and Qualitative Disclosures about Market Risk . 16
PART II
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . 16
Item 2. Changes in Securities and Use of Proceeds. . . . . . . 17
Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . . 17
Item 4. Submissions of Matters to a Vote of Security Holders . 17
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . 17
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . 17-18
2
BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
DECEMBER 31, MARCH 31,
2000 2001
-------------- -------------
(UNAUDITED)
CURRENT ASSETS:
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,416,000 $ 1,195,000
Receivables - net. . . . . . . . . . . . . . . . . . . . . . . . . . . 5,620,000 5,687,000
Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401,000 339,000
Prepaid expenses and other current assets. . . . . . . . . . . . . . . 547,000 338,000
-------------- -------------
Total current assets . . . . . . . . . . . . . . . . . . . . . 7,984,000 7,559,000
-------------- -------------
PROPERTY AND EQUIPMENT- net. . . . . . . . . . . . . . . . . . . . . . . 7,971,000 7,512,000
OTHER ASSETS:
Goodwill - net . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,903,000 1,887,000
Deposits and other - net . . . . . . . . . . . . . . . . . . . . . . . 268,000 295,000
-------------- -------------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . $ 18,126,000 $ 17,253,000
============== =============
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,343,000 $ 3,727,000
Accrued liabilities and customer advances. . . . . . . . . . . . . . . 6,559,000 6,481,000
Current maturities of long-term debt and notes payable . . . . . . . . 100,000 100,000
-------------- -------------
Total current liabilities. . . . . . . . . . . . . . . . . . . 12,002,000 10,308,000
-------------- -------------
LONG-TERM DEBT AND NOTES PAYABLE - net of current
maturities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,520,000 12,520,000
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY (DEFICIT):
Preferred stock ($.00001 par, 5,000,000 shares authorized,
365,000 and 304,000 issued and outstanding at December
31, 2000 and March 31, 2001, respectively). . . . . . . . . . . . . - -
Common stock ($.00001 par, 125,000,000 shares authorized,
31,692,000 and 39,822,000 shares issued and outstanding
at December 31, 2000 and March 31, 2001, respectively). . . . . . . - -
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . 53,098,000 53,886,000
Accumulated deficit. . . . . . . . . . . . . . . . . . . . . . . . . . (59,494,000) (59,461,000)
-------------- -------------
Total shareholders' equity (deficit) . . . . . . . . . . . . . (6,396,000) (5,575,000)
-------------- -------------
Total liabilities and shareholders' equity (deficit) . . . . . $ 18,126,000 $ 17,253,000
============== =============
See accompanying notes to condensed consolidated financial statements.
3
BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
--------------------------
2000 2001
------------ ------------
REVENUES. . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,523,000 $ 8,973,000
COSTS AND EXPENSES:
Cost of Sales and Operating Expenses. . . . . . . . . . . . . 5,914,000 6,145,000
Selling, General and Administrative . . . . . . . . . . . . . 1,371,000 1,855,000
Depreciation and Amortization . . . . . . . . . . . . . . . . 664,000 529,000
------------ ------------
7,949,000 8,529,000
------------ ------------
Operating Income (Loss) . . . . . . . . . . . . . . . . . . . . (426,000) 444,000
Interest expense (income) and other . . . . . . . . . . . . . . 3,033,000 (23,000)
------------ ------------
Income (Loss) From Continuing Operations. . . . . . . . . . . . (3,459,000) 467,000
Income From Discontinued Operations, net of Income Taxes. . . . 776,000 300,000
------------ ------------
Net Income (Loss) . . . . . . . . . . . . . . . . . . . . . . . (2,683,000) 767,000
Preferred Dividend Requirements & Accretions. . . . . . . . . . 119,000 734,000
------------ ------------
Net Income (Loss) Attributable to Common Shareholders . . . . . $(2,802,000) $ 33,000
============ ============
Basic and Diluted Earnings (Loss) per Common Share:
Continuing Operations. . . . . . . . . . . . . . . . . . . . $ (0.10) $ (0.01)
============ ============
Discontinued Operations. . . . . . . . . . . . . . . . . . . $ 0.02 $ 0.01
============ ============
Net Income (loss). . . . . . . . . . . . . . . . . . . . . . $ (0.08) $ 0.00
============ ============
Weighted Average Common Shares Outstanding - Basic and Diluted. 35,254,000 37,564,000
============ ============
See accompanying notes to condensed consolidated financial statements.
4
BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
THREE MONTHS ENDED MARCH 31, 2001
(UNAUDITED)
TOTAL
PREFERRED STOCK COMMON STOCK ADDITIONAL SHAREHOLDERS'
----------------- ------------------- PAID-IN ACCUMULATED EQUITY
SHARES AMOUNT SHARES AMOUNT CAPITAL DEFICIT (DEFICIT)
-------- ------- ---------- ------- ----------- ------------- -------------
BALANCES, December 31, 2000. . 365,000 $ - 31,692,000 $ - $53,098,000 $(59,494,000) $ (6,396,000)
Warrant discount
accretion . . . . . . . . - - - - 13,000 (13,000) -
Preferred stock
dividends accrued. . . . . - - - - 721,000 (721,000) -
Preferred stock
conversion to common stock (61,000) - 8,130,000 - - - -
Warrants issued for
consulting services. . . . - - - - 54,000 - 54,000
Net Income . . . . . . . . . - - - - - 767,000 767,000
-------- ------- ---------- ------- ----------- ------------- -------------
BALANCES, March 31, 2000 304,000 $ - 39,822,000 $ - $53,886,000 $(59,461,000) $ (5,575,000)
======== ======= ========== ======= =========== ============= =============
See accompanying notes to condensed consolidated financial statements.
5
BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
--------------------------
2000 2001
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss). . . . . . . . . . . . . . . . . . . . . . $(2,683,000) $ 767,000
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Depreciation and amortization . . . . . . . . . . . . . 664,000 529,000
Common stock issues in exchange for services. . . . . . 48,000 -
Bad debt expense. . . . . . . . . . . . . . . . . . . . 19,000 99,000
Equity issued for services and settlements. . . . . . . 1,679,000 54,000
Changes in assets and liabilities, net of acquisitions:
Receivables . . . . . . . . . . . . . . . . . . . . . . (2,093,000) (166,000)
Inventories . . . . . . . . . . . . . . . . . . . . . . 125,000 62,000
Prepaid expenses and other current assets . . . . . . . 148,000 209,000
Deferred financing costs and other assets (not current) 819,000 (27,000)
Accounts payable. . . . . . . . . . . . . . . . . . . . (185,000) (1,616,000)
Accrued liabilities and customer advances . . . . . . . 2,009,000 (78,000)
Change in net assets of discontinued operations . . . . (1,103,000) -
------------ ------------
Net cash used in operating activities . . . . . . . . . (553,000) (167,000)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property and equipment additions. . . . . . . . . . . . (166,000) (54,000)
------------ ------------
Net cash used in investing activities . . . . . . . . . (166,000) (54,000)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under line of credit . . . . . . . . . . . . 1,280,000 -
------------ ------------
Net cash provided by financing activities. . . . . . . 1,280,000 -
------------ ------------
Net increase (decrease) in cash and cash equivalents. . 561,000 (221,000)
CASH AND CASH EQUIVALENTS, Beginning of Period . . . . . . . 222,000 1,416,000
------------ ------------
CASH AND CASH EQUIVALENTS, End of Period . . . . . . . . . . $ 783,000 $ 1,195,000
============ ============
Supplemental Cash Flow Disclosures:
Cash paid for interest . . . . . . . . . . . . . . . . $ 374,000 $ 6,000
Non-cash Investing and Financing Activities:
Preferred stock dividends accrued. . . . . . . . . . . $ 110,000 $ 721,000
============ ============
See accompanying notes to condensed consolidated financial statements.
6
BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2001
(UNAUDITED)
A. GOING CONCERN
The following should be read in conjunction with the unaudited consolidated
financial statements and notes thereto and the other financial information
contained in this report and the audited financial statements and notes in the
Company's annual report on Form 10K for the year ended December 31, 2000, and
those reports filed previously with the Securities and Exchange Commission
("SEC").
The Company receives the majority of its revenues from customers in the
energy industry. Demand for the Company's products and services is impacted by
the number and size of projects available which fluctuate as changes in oil and
gas prices affect customers' exploration and production activities, forecasts
and budgets. These fluctuations have a significant effect on the Company's cash
flows.
Recent activity levels in the oil and gas sector have increased the
frequency of high-risk work and the volume of prevention related projects.
However, the Company's well control business has only recently begun to benefit
to a meaningful degree from an increase in the volume of critical events. In
the past, the well control business has provided the Company with the
opportunity for profitable operating activities, but the timing of critical
events is unpredictable. Consequently, the Company's financial performance has
been, and continues to be, subject to significant fluctuations.
The relatively low incidences of critical events over the last two years
have negatively affected the Company's financial position. In response,
commencing in 1999 and continuing into 2001, the Company (a) downsized
personnel, (b) improved its working capital, (c) closed and/or consolidated
certain field offices, (d) consolidated administrative functions, and (e)
discontinued certain business lines to ensure that the Company's resources were
deployed in its most profitable operations. The Company's initial efforts to
rationalize its operations were not sufficient to prevent significant operating
losses in 1999 and 2000. During the first quarter of 2001, the result of these
efforts was fully in place and the Company produced positive net income during
the period.
The prior years' operating losses resulted in an impairment of the
Company's liquidity and an inability to pay certain vendors in a timely manner.
This hampered the Company's capacity to hire sub-contractors, obtain materials
and supplies, and otherwise conduct effective or efficient operations. To
alleviate the Company's liquidity problems and to improve its overall capital
structure, the Company initiated and completed a program in 2000 to raise new
funds, sell assets of certain subsidiaries, retire the Company's existing senior
debt, restructure its subordinated debt and increase its shareholders' equity.
During the year ended December 31, 2000, the Company received approximately
$8,700,000 in funds from the purchase of participation interests in its senior
secured credit facility with Comerica Bank-Texas. In connection with this
financing, the Company issued 147,058 shares of common stock and warrants
representing the right to purchase an aggregate of 8,729,985 shares of common
stock of the Company to the participation interest holders and warrants to
purchase an aggregate of 3,625,000 shares of common stock to the investment
group that arranged the financing. The warrants have a term of five years and
can be exercised by the payment of cash in the amount of $0.625 per share as to
8,729,985 shares and $0.75 per share as to 3,625,000 shares of common stock, or
by relinquishing a number of shares subject to the warrant with a market value
equal to the aggregate exercise price of the portion of the warrant being
exercised. On December 28, 2000, $7,729,985 of the participation interest, plus
$757,315 in accrued interest thereon, was exchanged for 89,117 shares of Series
H Cumulative Senior Preferred Stock in the Company. The remaining $1,000,000 of
the participation interest was outstanding as senior secured debt as of March
31, 2001.
On September 28, 2000, the Company announced that it closed the sale of the
assets of the Baylor Company and its subsidiaries to National Oilwell, Inc. The
proceeds from the sale were approximately $29,000,000 cash. Comerica
Bank-Texas, the Company's primary senior secured lender at that time, was paid
in full as a component of the transaction. Specialty Finance Fund I, LLC, as a
participant in the Comerica senior facility, remains as the senior secured
lender.
On October 24, 2000, the Company announced that it had reached agreement in
principle with Prudential Insurance Company of America, in the form of a letter
of intent, regarding the restructuring of the Company's subordinated debt with
Prudential. The Company had been in default under its subordinated note
agreement with Prudential since the second quarter of 1999. A restructuring
7
agreement was executed by both parties on December 28, 2000. The Prudential
restructuring agreement provided that the aggregate indebtedness due to
Prudential be resolved by the Company: (i) paying $12,000,000 cash at closing,
(ii) establishing $7,200,000 of new subordinated debt, (iii) issuing $5,000,000
face value of Series E Cumulative Senior Preferred Stock ($2,850,000 fair
value) and (iv) issuing $8,000,000 face value of Series G Cumulative Convertible
Preferred Stock ($2,600,000 fair value). In addition, $500,000 is contingently
payable upon the Company securing a new term loan with a third party lender.
All interest payments and dividends are paid in kind and deferred for two years
from the date of closing. Additionally, as a component of the transaction,
Prudential received newly issued warrants to purchase 8,800,000 shares of the
Company's Common Stock for $0.625 per share and the Company agreed to re-price
the existing common stock purchase warrants to purchase 3,165,000 currently held
by Prudential to $0.625 per share. The Company has the right to repurchase, at
a discount to face value, all of the debt, stocks and warrants issued to
Prudential for agreed periods of time.
The refinancing of the Company's debt with Prudential qualified as a
troubled debt restructuring under the provisions of Statement of Financial
Accounting Standards (SFAS) No. 15. As a result of the application of this
accounting standard, the total indebtedness due to Prudential, inclusive of
accrued interest, was reduced by the cash and fair market value of securities
issued by the Company, and the residual balance of the indebtedness was recorded
as the new carrying value of the subordinated note due to Prudential.
Consequently, the $7,200,000 face value of the subordinated note is recorded on
the Company's balance sheet at $11,520,000. The additional carrying value of
the debt in excess of face value represents the accrual of future interest
expense due on the face value of the subordinated note to Prudential. The
remaining excess of amounts previously due Prudential over the new carrying
value was $2,444,000 and was recognized as an extraordinary gain in the year
ended December 31, 2000.
The financing obtained during 2000 from Specialty Finance Fund I, LLC, and
the restructuring of the subordinated debt with Prudential has a potentially
significant dilutive impact on existing common shareholders. This could
adversely affect the market price for the Company's common stock and limit the
price at which new stock can be issued for future capital requirements.
Further, there can be no assurance that the Company will be able to obtain new
capital, and if new capital is obtained that it will be on terms favorable to
the Company.
During the quarter ended March 31, 2001, the Company's generated a net cash
deficit from operating activities of $167,000 and the Company utilized net cash
of $54,000 in investing activities. Overall, the Company's net cash position
decreased by $221,000 during the period. At March 31, 2001, the Company had
a cash balance of $1,195,000 (see Part 1, Item 1, Consolidated Statement of
Cash Flows).
As of March 31, 2001, the Company's current assets totaled approximately
$7,559,000 and current liabilities were $10,308,000, resulting in a working
capital deficit of approximately $2,749,000. The Company's highly liquid
current assets, represented by cash of $1,195,000 and receivables of $5,687,000,
were collectively $3,426,000 less than the amount of current liabilities.
Included in current liabilities is a provision of $1,833,000 related to a
judgment against the Company for a guaranty (see Part 2, Item 1, Legal
Proceedings). The Company has recently reached an agreement in principle to
resolve this litigation which the Company is obligated to pay the full amount
of that judgment by August 31, 2001, and has secured that obligation with a
first lien against the accounts receivable of the Company up to the amount of
the judgment. The payment of this obligation by August 31, 2001, absent
additional financing, will have significant negative impact on the Company's
liquidity and ability to pay its obligations. To alleviate the Company's
liquidity problems the Company continues to pursue all available opportunities
to raise new funds through both debt and equity financing, but has not
secured any such financing at present.
The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. However, as
discussed the Company experienced recurring losses from operations during 1999
and 2000. The uncertainties surrounding the sufficiency of its future cash
flows and the lack of firm commitments for additional capital raises substantial
doubt about the ability of the Company to continue as a going concern. The
accompanying financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset carrying amounts or the
amount and classification of liabilities that might result should the Company be
unable to continue as a going concern.
8
B. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of the Company
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q and
Rule 10-01 of Regulation S-X. They do not include all information and notes
required by generally accepted accounting principles for complete annual
financial statements. The accompanying consolidated financial statements include
all adjustments, including normal recurring accruals, which, in the opinion of
management, are necessary in order to make the consolidated financial statements
not be misleading.
The accompanying consolidated financial statements should be read in
conjunction with the audited consolidated financial statements and the notes
thereto contained in the Company's Annual Report on Form 10-K for the year ended
December 31, 2000.
The results of operations for the three-month periods ended March 31, 2000
and 2001 are not necessarily indicative of the results to be expected for the
full year.
The Company has filed a form 10-Q/A amending Item 1 and Item 2 of the
Company's quarterly report on Form 10-Q for the period ended March 31, 2000 (the
"Original Form 10-Q") filed with the Securities and Exchange Commission on July
17, 2000. The purpose of the Form 10-Q/A was to amend the Company's first
quarter financial information for 2000. This amendment resulted from a
$1,679,000 provision to Other Expense required to properly reflect the fair
value attributable to certain equity transactions within that quarter. After
making this amendment, the Company's net loss increased by $1,679,000 ($0.05 per
share). For the purposes of the Form 10-Q/A, and in accordance with the Rule
12b-5 under the Securities Act of 1934, as amended, the Company has amended and
restated in its entirety each item of the Original Form 10-Q which has been
affected by the restatement. Except for Item 1 and Item 2 of Part 1, no other
information in the Original Form 10-Q is amended by the Form 10-Q/A.
Recently Issued Accounting Standards - In June 1998, Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities" ("SFAS 133") was issued. SFAS 133 establishes accounting and
reporting standards requiring that every derivative instrument be measured at
its fair value, recorded in the balance sheet as either an asset or liability
and that changes in the derivative's fair value be recognized currently in
earnings. SFAS 133, as amended, was adopted by the Company on January 1, 2001.
The adoption in January 2001 did not have a material impact on the financial
statements of the Company.
C. DISCONTINUED OPERATIONS
As previously discussed, the Company's subsidiary ITS Supply Corporation
("ITS") filed in Corpus Christi, Texas for protection under Chapter 11 of the
U.S. Bankruptcy Code. ITS is now proceeding to liquidate its assets and
liabilities pursuant to Chapter 7 of Title 11. At the time of the filing, ITS
had total liabilities of approximately $6,900,000 and tangible assets of
approximately $950,000. The Company has an outstanding guaranty on ITS debt upon
which a judgment against the Company was entered by a state district court in
the amount of approximately $1,833,000. The judgment creditor has agreed not to
enforce the judgment prior to August 31, 2001. See Part 2, Item 1, Legal
Proceeding.
On April 27, 2001, in the United States Bankruptcy Court for the Southern
District of Texas, the Chapter 7 Trustee in the bankruptcy proceeding of ITS
Supply Corporation, the Company's subsidiary, filed a complaint against Comerica
Bank-Texas, the Company and various subsidiaries of the Company for a formal
accounting of (1) all lockbox transfers that occurred between ITS and Comerica
Bank, et al. and (2) all intercompany transfers between ITS and the Company or
subsidiaries of the Company. The Chapter 7 Trustee seeks an accounting to
determine if any of the transfers between the parties are avoidable under either
Federal or State of Texas statutes and seeks repayment to ITS of all such
amounts. The Trustee believes that approximately $400,000 of lockbox transfers
and $3,000,000 of intercompany transfers were made between the parties.
The Company believes it is not probable that an accounting of the
transactions between the parties will demonstrate there is a liability owing
by the parties to the ITS Chapter 7 estate.
9
On September 28, 2000, the Company announced that it closed the sale of the
assets of the Baylor Company and its subsidiaries to National Oilwell, Inc. The
proceeds from the sale were approximately $29,000,000 in cash. Comerica
Bank-Texas, the Company's primary senior secured lender at the time, was paid in
full as a component of the transaction.
D. COMMITMENTS AND CONTINGENCIES
The Company is involved in or threatened with various legal proceedings
from time to time arising in the ordinary course of business. Management of the
Company does not believe that any liabilities resulting from any such current
proceedings will have a material adverse effect on its consolidated operations
or financial position.
As previously discussed, the Company's subsidiary ITS Supply Corporation
("ITS") filed in Corpus Christi, Texas for protection under Chapter 11 of the
U.S. Bankruptcy Code. ITS is now proceeding to liquidate its assets and
liabilities pursuant to Chapter 7 of Title 11. At the time of the filing, ITS
had total liabilities of approximately $6,900,000 and tangible assets of
approximately $950,000. The Company has an outstanding guaranty on ITS debt upon
which a judgment against the Company was entered by a state district court in
the amount of approximately $1,833,000. The judgment creditor has agreed not to
enforce the judgment prior to August 31, 2001. See Part 2, Item 1, Legal
Proceeding.
E. BUSINESS SEGMENT INFORMATION
Information concerning operations in different business segments at March
31, 2000 and 2001, and for the three-month periods then ended is presented
below. The Company considers that it operates in three segments: Response,
Prevention and Restoration. Intercompany transfers between segments were not
material. The accounting policies of the operating segments are the same as
those described in the summary of significant accounting policies. For purposes
of this presentation, general and corporate expenses have been allocated between
segments on a pro rata basis based on revenue. In addition, general and
corporate are included in the calculation of identifiable assets and are
included in the Response and Restoration business segment and the domestic
segment.
Business segment operating data from continuing operations is presented for
purposes of discussion and analysis of operating results. On January 1, 2001,
the Company redefined the segments that it operates in as a result of the
decision to discontinue ITS and Baylor business operations. The current segments
are Response, Prevention and Restoration. Most of the Company's subsidiaries
operate in all three segments. Accordingly, business segments disclosures
included in this report reflect this classification for all periods presented.
Identifiable assets at March 31, 2000, exclude $31,087,000 of net assets of
discontinued operations.
Response Prevention Restoration Consolidated
----------- ----------- ------------- --------------
Three Months Ended March 31, 2001:
Net Operating Revenues. . . . . . $ 6,995,000 $ 1,150,000 $ 828,000 $ 8,973,000
Operating Income (Loss) . . . . . 410,000 528,000 (494,000) 444,000
Identifiable Operating Assets . . 13,450,000 2,211,000 1,592,000 17,253,000
Capital Expenditures. . . . . . . 47,000 4,000 3,000 54,000
Depreciation and Amortization . . 396,000 56,000 77,000 529,000
Interest Expense. . . . . . . . . 37,000 6,000 4,000 47,000
Three Months Ended March 31, 2000:
Net Operating Revenues. . . . . . $ 5,379,000 $ 496,000 $ 1,648,000 $ 7,523,000
Operating Income (Loss) . . . . . 395,000 27,000 (848,000) (426,000)
Identifiable Operating Assets . . 19,112,000 3,142,000 2,262,000 24,516,000
Capital Expenditures. . . . . . . 119,000 11,000 36,000 166,000
Depreciation and Amortization . . 463,000 40,000 161,000 664,000
Interest Expense. . . . . . . . . 962,000 89,000 293,000 1,344,000
10
For the three-month periods ended March 31, 2000 and 2001, the Company's
revenues were substantially consistent with those for the year ended December
31, 2000 (domestic - 81%, foreign - 19%).
F. EARNINGS PER SHARE
Earnings per share amounts are based on the weighted average number of
shares of common stock and common stock equivalents outstanding during the
period. For the three months ended March 31, the Company incurred a loss to
common shareholders before consideration of the income from discontinued
operations. As a result, the potential dilutive effect of options, warrants and
preferred stock conversions is not calculated because to do so would have been
antidilutive for the period presented. The excluded securities include: (1)
35,048,000 common shares issuable upon exercise of stock purchase warrants; (2)
1,680,000 common shares issuable upon conversion of senior convertible debt;
7,913,000 common shares issuable upon exercise of stock options; (4) 25,508,000
common shares issuable upon conversion of convertible preferred stock. For the
three months ended March 31,2000, the Company had a loss which precluded
calculating the potential dilutive effect of options, warrants and preferred
stock because to do so would reduce the loss per share.
11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with
the Consolidated Financial Statements and Notes thereto and the other financial
information included in this report and contained in the Company's periodic
reports previously filed with the Commission.
The Company completed the acquisitions of: Boots & Coots, L.P. as of July
31, 1997; ABASCO, Inc. as of September 25, 1997; ITS Supply Corporation as of
January 2, 1998; Boots & Coots Special Services, Inc. (formerly known as Code 3,
Inc.) as of February 20, 1998; Baylor Company as of July 23, 1998, and HAZ-TECH
Environmental Services, Inc. as of November 4, 1998. For all periods presented,
the operations of ITS and Baylor have been reclassified as discontinued
operations.
Business segment operating data from continuing operations is presented for
purposes of discussion and analysis of operating results. On January 1, 2001,
the Company redefined the segments that it operates in as a result of the
decision to discontinue ITS and Baylor business operations. The current
segments are Response, Prevention and Restoration. Most of the Company's
subsidiaries operate in all three segments. Accordingly, business segments
disclosures included in this report reflect this classification for all periods
presented.
Three Months Ended
March 31,
------------------------
2000 2001
----------- -----------
Revenues
Response. . . . . . . . . . . . . . $5,379,000 $6,995,000
Prevention. . . . . . . . . . . . . 496,000 1,150,000
Restoration . . . . . . . . . . . . 1,648,000 828,000
----------- -----------
$7,523,000 $8,973,000
----------- -----------
Cost of Sales and Operating Expenses
Response. . . . . . . . . . . . . . $3,526,000 $4,762,000
Prevention. . . . . . . . . . . . . 341,000 370,000
Restoration . . . . . . . . . . . . 2,047,000 1,013,000
----------- -----------
$5,914,000 $6,145,000
----------- -----------
Selling, General and Administrative
Expenses (1)
Response. . . . . . . . . . . . . . $ 993,000 $1,427,000
Prevention. . . . . . . . . . . . . 89,000 195,000
Restoration . . . . . . . . . . . . 289,000 233,000
----------- -----------
$1,371,000 $1,855,000
----------- -----------
Depreciation and Amortization (2)
Response. . . . . . . . . . . . . . $ 463,000 $ 396,000
Prevention. . . . . . . . . . . . . 40,000 56,000
Restoration . . . . . . . . . . . . 161,000 77,000
----------- -----------
$ 664,000 $ 529,000
----------- -----------
Operating Income (Loss)
Response. . . . . . . . . . . . . . $ 395,000 $ 410,000
Prevention. . . . . . . . . . . . . 27,000 528,000
Restoration . . . . . . . . . . . . (848,000) (494,000)
----------- -----------
$ (426,000) $ 444,000
----------- -----------
(1) Corporate selling, general and administrative expenses have been allocated
pro rata among segments based upon relative revenues.
(2) Corporate depreciation and amortization expenses have been allocated pro
rata among segments based upon relative revenues.
COMPARISON OF THE THREE MONTHS ENDED MARCH 31, 2000 WITH THE THREE MONTHS ENDED
MARCH 31, 2001 (UNAUDITED)
Response revenues were $6,995,000 for the quarter ended March 31, 2001,
compared to $5,379,000 for the quarter ended March 31, 2000, an increase of
$1,616,000 (30.0%) in the current period. The principal component of the
increase was a $2,720,000 increase in revenues as a result of the success of the
risk management product "WELLSURE". Under the "WELLSURE" program, the Company
acted as lead contractor on two critical well control events during the first
quarter of 2001. Segment revenues were partially offset by a planned strategic
reduction in the lower margin consulting business.
12
Prevention revenues were $1,150,000 for the three months ended March 31,
2001, representing an increase of $654,000 (131.9%) compared to the same period
of the prior year. This is primarily the result of the successful expansion of
this segment through strategic engineering initiatives for new and existing
domestic and foreign customers. Additional revenue increases were associated
with the Company's service fees in conjunction with the WELLSURE insurance
program.
Restoration revenues were $828,000 for the three months ended March 31,
2001, representing a decrease of $820,000 (49.8%) compared to the same period of
the prior year. The decrease was primarily attributable to the lack of a large
international project that occurred during the 2000 quarter and decreased plant
"shut-down" opportunities in the petrochemical industry for the Special Services
group ($710,000). Additionally, there were reduced sales at Abasco due to a
continuing decline in international direct sales efforts and support ($110,000).
COST OF SALES AND OPERATING EXPENSES
Response cost of sales and operating expenses increased by $1,236,000 for
the quarter ended March 31, 2001, an increase of 35.0% in comparison to the
first quarter of last year as a result of increased third party costs under the
Company's, previously described, lead contracting role associated with two
WELLSURE critical well events.
The increase in Prevention cost of sales and operating expenses of $29,000
(8.7%) for the quarter ended March 31, 2001 compared to the prior quarter
represents a nominal increase for this segment as most of the related costs
associated with the services are primarily fixed.
The decrease in Restoration cost of sales and operating expenses of
$1,034,000 (50.5%) for the quarter ended March 31, 2001 is primarily due to the
absence of the large international project that occurred during the 2000 quarter
and reduced operating expenses at Abasco due to the decision to outsource the
manufacture of Abasco products.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Consolidated selling, general and administrative expenses increased during
the quarter ended March 31, 2001 compared to the prior year Quarter due to
requisite additions in administrative and accounting staffing and systems.
Additional costs were incurred in support of business development and sales
initiatives required for strategic revenue growth. Also included in the increase
is a non-cash charge of $148,000 for consulting fees and compensation related to
certain securities valuations. As previously footnoted on the segmented
financial table, Corporate selling, general and administrative expenses have
been allocated pro rata among the segments using relative revenue as the basis
for allocation.
Selling, general and administrative expenses for the Response segment were
$1,427,000 for the quarter ended March 31, 2001, compared to $993,000 for the
quarter ended March 31, 2000, an increase of $434,000 (43.7%) from the
comparable quarter of the prior year as a result of the cost increases described
above and the pro rata revenue basis utilized for allocation of costs.
The increase in Prevention selling, general and administrative expenses of
$106,000 (119.8%) for the quarter ended March 31, 2001, compared to the quarter
ended March 31, 2000, is primarily the result of increased business development
support and the pro rate revenue basis utilized for allocation of costs.
The decrease in Restoration selling, general and administrative expenses of
$56,000 (19.4%) for the quarter ended March 31, 2001, compared to the quarter
ended March 31, 2000, is primarily the result of the pro rata revenue basis
utilized for allocation of costs.
DEPRECIATION AND AMORTIZATION
Consolidated depreciation and amortization expenses decreased primarily as
a result of the reduction in amortization of deferred loan charges that were
charged to income during the year ended December 31, 2000, related to the
re-financing of the Company's long term debt. As previously footnoted on the
segmented financial table, Depreciation and Amortization expenses have been
allocated pro rata among the segments using relative revenue as the basis for
allocation.
13
INTEREST AND OTHER EXPENSES
The other income of $23,000 for the three months ended March 31, 2001
compares to $3,051,000 of expense in the prior year period as a result of the
restructuring of the majority of the Company's senior and subordinated debt with
equity. The three months ended March 31, 2000 also include a $1,679,000
non-cash financing charge for an inducement to convert certain preferred stock
into common stock.
LIQUIDITY AND CAPITAL RESOURCES/INDUSTRY CONDITIONS
The following should be read in conjunction with the unaudited consolidated
financial statements and notes thereto and the other financial information
contained in this report and the audited financial statements and notes in the
Company's annual report on Form 10K for the year ended December 31, 2000, and
those reports filed previously with the Securities and Exchange Commission
("SEC").
The Company receives the majority of its revenues from customers in the
energy industry. Demand for the Company's products and services is impacted by
the number and size of projects available which fluctuate as changes in oil and
gas prices affect customers' exploration and production activities, forecasts
and budgets. These fluctuations have a significant effect on the Company's cash
flows.
Recent activity levels in the oil and gas sector have increased the
frequency of high-risk work and the volume of prevention related projects.
However, the Company's well control business has only recently begun to benefit
to a meaningful degree from an increase in the volume of critical events. In
the past, the well control business has provided the Company with the
opportunity for profitable operating activities, but the timing of critical
events is unpredictable. Consequently, the Company's financial performance has
been, and continues to be, subject to significant fluctuations.
The relatively low incidences of critical events over the last two years
have negatively affected the Company's financial position. In response,
commencing in 1999 and continuing into 2001, the Company (a) downsized
personnel, (b) improved its working capital, (c) closed and/or consolidated
certain field offices, (d) consolidated administrative functions, and (e)
discontinued certain business lines to ensure that the Company's resources were
deployed in its most profitable operations. The Company's initial efforts to
rationalize its operations were not sufficient to prevent significant operating
losses in 1999 and 2000. During the first quarter of 2001, the result of these
efforts was fully in place and the Company produced positive net income during
the period.
The prior years' operating losses resulted in an impairment of the
Company's liquidity and an inability to pay certain vendors in a timely manner.
This hampered the Company's capacity to hire sub-contractors, obtain materials
and supplies, and otherwise conduct effective or efficient operations. To
alleviate the Company's liquidity problems and to improve its overall capital
structure, the Company initiated and completed a program in 2000 to raise new
funds, sell assets of certain subsidiaries, retire the Company's existing senior
debt, restructure its subordinated debt and increase its shareholders' equity.
During the year ended December 31, 2000, the Company received approximately
$8,700,000 in funds from the purchase of participation interests in its senior
secured credit facility with Comerica Bank-Texas. In connection with this
financing, the Company issued 147,058 shares of common stock and warrants
representing the right to purchase an aggregate of 8,729,985 shares of common
stock of the Company to the participation interest holders and warrants to
purchase an aggregate of 3,625,000 shares of common stock to the investment
group that arranged the financing. The warrants have a term of five years and
can be exercised by the payment of cash in the amount of $0.625 per share as to
8,729,985 shares and $0.75 per share as to 3,625,000 shares of common stock, or
by relinquishing a number of shares subject to the warrant with a market value
equal to the aggregate exercise price of the portion of the warrant being
exercised. On December 28, 2000, $7,729,985 of the participation interest, plus
$757,315 in accrued interest thereon, was exchanged for 89,117 shares of Series
H Cumulative Senior Preferred Stock in the Company. The remaining $1,000,000 of
the participation interest was outstanding as senior secured debt as of March
31, 2001.
On September 28, 2000, the Company announced that it closed the sale of the
assets of the Baylor Company and its subsidiaries to National Oilwell, Inc. The
proceeds from the sale were approximately $29,000,000 cash. Comerica
Bank-Texas, the Company's primary senior secured lender at that time, was paid
in full as a component of the transaction. Specialty Finance Fund I, LLC, as a
participant in the Comerica senior facility, remains as the senior secured
lender.
14
On October 24, 2000, the Company announced that it had reached agreement in
principle with Prudential Insurance Company of America, in the form of a letter
of intent, regarding the restructuring of the Company's subordinated debt with
Prudential. The Company had been in default under its subordinated note
agreement with Prudential since the second quarter of 1999. A restructuring
agreement was executed by both parties on December 28, 2000. The Prudential
restructuring agreement provided that the aggregate indebtedness due to
Prudential be resolved by the Company: (i) paying $12,000,000 cash at closing,
(ii) establishing $7,200,000 of new subordinated debt, (iii) issuing $5,000,000
face value of Series E Cumulative Senior Preferred Stock ($2,850,000 fair
value) and (iv) issuing $8,000,000 face value of Series G Cumulative Convertible
Preferred Stock ($2,600,000 fair value). In addition, $500,000 is contingently
payable upon the Company securing a new term loan with a third party lender.
All interest payments and dividends are paid in kind and deferred for two years
from the date of closing. Additionally, as a component of the transaction,
Prudential received newly issued warrants to purchase 8,800,000 shares of the
Company's Common Stock for $0.625 per share and the Company agreed to re-price
the existing common stock purchase warrants to purchase 3,165,000 currently held
by Prudential to $0.625 per share. The Company has the right to repurchase, at
a discount to face value, all of the debt, stocks and warrants issued to
Prudential for agreed periods of time.
The refinancing of the Company's debt with Prudential qualified as a
troubled debt restructuring under the provisions of Statement of Financial
Accounting Standards (SFAS) No. 15. As a result of the application of this
accounting standard, the total indebtedness due to Prudential, inclusive of
accrued interest, was reduced by the cash and fair market value of securities
issued by the Company, and the residual balance of the indebtedness was recorded
as the new carrying value of the subordinated note due to Prudential.
Consequently, the $7,200,000 face value of the subordinated note is recorded on
the Company's balance sheet at $11,520,000. The additional carrying value of
the debt in excess of face value represents the accrual of future interest
expense due on the face value of the subordinated note to Prudential. The
remaining excess of amounts previously due Prudential over the new carrying
value was $2,444,000 and was recognized as an extraordinary gain in the year
ended December 31, 2000.
The financing obtained during 2000 from Specialty Finance Fund I, LLC, and
the restructuring of the subordinated debt with Prudential has a potentially
significant dilutive impact on existing common shareholders. This could
adversely affect the market price for the Company's common stock and limit the
price at which new stock can be issued for future capital requirements.
Further, there can be no assurance that the Company will be able to obtain new
capital, and if new capital is obtained that it will be on terms favorable to
the Company.
During the quarter ended March 31, 2001, the Company's generated a net cash
deficit from operating activities of $167,000 and the Company utilized net cash
of $54,000 in investing activities. Overall, the Company's net cash position
decreased by $221,000 during the period. At March 31, 2001, the Company had
a cash balance of $1,195,000 (see Part 1, Item 1, Consolidated Statement of
Cash Flows).
As of March 31, 2001, the Company's current assets totaled approximately
$7,559,000 and current liabilities were $10,308,000, resulting in a working
capital deficit of approximately $2,749,000. The Company's highly liquid
current assets, represented by cash of $1,195,000 and receivables of $5,687,000,
were collectively $3,426,000 less than the amount of current liabilities.
Included in current liabilities is a provision of $1,833,000 related to a
judgment against the Company for a guaranty (see Part 2, Item 1, Legal
Proceedings). The Company has recently reached an agreement in principle to
resolve this litigation which the Company is obligated to pay the full amount
of that judgment by August 31, 2001, and has secured that obligation with a
first lien against the accounts receivable of the Company up to the amount of
the judgment. The payment of this obligation by August 31, 2001, absent
additional financing, will have significant negative impact on the Company's
liquidity and ability to pay its obligations. To alleviate the Company's
liquidity problems the Company continues to pursue all available opportunities
to raise new funds through both debt and equity financing, but has not
secured any such financing at present.
The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. However, as
discussed the Company experienced recurring losses from operations during 1999
and 2000. The uncertainties surrounding the sufficiency of its future cash flows
and the lack of firm commitments for additional capital raises substantial doubt
about the ability of the Company to continue as a going concern. The
accompanying financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset carrying amounts or the
amount and classification of liabilities that might result should the Company be
unable to continue as a going concern.
15
FORWARD-LOOKING STATEMENTS
This report on Form 10-Q contains forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended.
Actual results could differ from those projected in any forward-looking
statements for the reasons detailed in this report. The forward-looking
statements contained herein are made as of the date of this report and the
Company assumes no obligation to update such forward-looking statements, or to
update the reasons why actual results could differ from those projected in such
forward-looking statements. Investors should consult the information set forth
from time to time in the Company's reports on Forms 10-K, 10-Q and 8-K, and its
Annual Report to Stockholders.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The following discussion of the Company's market sensitive financial
instruments contains "forward-looking statements".
The Company's debt consists of both fixed-interest and variable-interest
rate debt; consequently, the Company's earnings and cash flows, as well as the
fair values of its fixed-rate debt instruments, are subject to interest-rate
risk. The Company has performed sensitivity analyses to assess the impact of
this risk based on a hypothetical ten-percent increase in market interest rates.
Market rate volatility is dependent on many factors that are impossible to
forecast, and actual interest rate increases could be more severe than the
hypothetical ten-percent increase.
With respect to the fair value of the Company's fixed-interest rate debt,
if prevailing market interest rates had been ten percent higher at March 31,
2000 and March 31, 2001, and all other factors affecting the Company's debt
remained the same, the fair value of the Company's fixed-rate debt, as
determined on a present-value basis, would have been lower by approximately
$62,000 and $10,000 for the quarters ended March 31, 2000 and March 31, 2001,
respectively. Given the composition of the Company's debt structure, the Company
does not, for the most part, actively manage its interest rate risk.
The Company operates internationally, giving rise to exposure to market
risks from changes in foreign exchange rates to the extent that transactions are
not denominated in U.S. dollars. The Company typically denominates its contracts
in U.S. dollars to mitigate the exposure to fluctuations in foreign currencies.
PART II
ITEM 1. LEGAL PROCEEDINGS
The Company is involved in or threatened with various legal proceedings
from time to time arising in the ordinary course of business. Additionally, the
Company's liquidity problems and loan covenant defaults adversely impacted the
Company's ability to pay certain vendors on a timely basis. As a consequence, a
number of these vendors filed lawsuits against the Company and some have
obtained judgments for the amount of their claims, plus costs. The Company has
retained a third party to negotiate settlements of some of these claims and is
actively engaged in defending or resolving others. The Company expects that it
will be able to resolve these claims in an orderly fashion and does not believe
that these suits or judgments or any liabilities resulting from any such current
proceedings will have a material adverse effect on its operations or financial
position. However, the Company's business, financial performance and prospects
could be adversely affected if it is unable to adequately defend, pay or settle
its accounts, including as a consequence of efforts to enforce existing or
future judgments.
As previously discussed, the Company's subsidiary ITS Supply Corporation
("ITS") filed in Corpus Christi, Texas for protection under Chapter 11 of the
U.S. Bankruptcy Code. ITS is now proceeding to liquidate its assets and
liabilities pursuant to Chapter 7 of Title 11. At the time of the filing, ITS
had total liabilities of approximately $6,900,000 and tangible assets of
approximately $950,000. The Company has an outstanding guaranty on ITS debt upon
which a judgment against the Company was entered by a state district court in
the amount of approximately $1,833,000. The judgment creditor has agreed not to
enforce the judgment prior to August 31, 2001.
16
On April 27, 2001, in the United States Bankruptcy Court for the Southern
District of Texas, the Chapter 7 Trustee in the bankruptcy proceeding of ITS
Supply Corporation, the Company's subsidiary, filed a complaint against Comerica
Bank-Texas, the Company and various subsidiaries of the Company for a formal
accounting of (1) all lockbox transfers that occurred between ITS and Comerica
Bank, et al. and (2) all intercompany transfers between ITS and the Company or
subsidiaries of the Company. The Chapter 7 Trustee seeks an accounting to
determine if any of the transfers between the parties are avoidable under either
Federal or State of Texas statutes and seeks repayment to ITS of all such
amounts. The Trustee believes that approximately $400,000 of lockbox transfers
and $3,000,000 of intercompany transfers were made between the parties. The
Company believes it is not probable that an accounting of the transactions
between the parties will demonstrate there is a liability owing by the parties
to the ITS Chapter 7 estate.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULT UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSIONS 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
Exhibit No. Document
---------- ----------------------------------------------------------------------
3.01 -- Amended and Restated Certificate of Incorporation(1)
3.02 -- Amendment to Certificate of Incorporation(2)
3.03 -- Amended Bylaws(3)
4.01 -- Specimen Certificate for the Registrant's Common
Stock(4)
4.02 -- Certificate of Designation of 10% Junior Redeemable
Convertible Preferred Stock(5)
4.03 -- Certificate of Designation of Series A Cumulative Senior Preferred Stock(6)
4.04 -- Certificate of Designation of Series B Convertible Preferred Stock(7)
4.05 -- Certificate of Designation of Series C Cumulative Convertible Junior Preferred Stock(8)
4.06 -- Certificate of Designation of Series D Cumulative Junior Preferred Stock(9)
4.07 -- Certificate of Designation of Series E Cumulative Senior Preferred Stock
4.08 -- Certificate of Designation of Series F Convertible Senior Preferred Stock
4.09 -- Certificate of Designation of Series G Cumulative Convertible Preferred Stock
4.10 -- Certificate of Designation of Series H Cumulative Convertible Preferred Stock
10.01 -- Alliance Agreement between IWC Services, Inc. and
Halliburton Energy Services, a division of Halliburton
Company(10)
10.02 -- Executive Employment Agreement of Larry H. Ramming(11)
10.03 -- Executive Employment Agreement of Brian Krause(12)
17
Exhibit No. Document
---------- ----------------------------------------------------------------------
10.04 -- 1997 Incentive Stock Plan(13)
10.05 -- Outside Directors' Option Plan(14)
10.06 -- Executive Compensation Plan(15)
10.07 -- Halliburton Center Sublease(16)
10.08 -- Registration Rights Agreement dated July 23, 1998,
between Boots & Coots International Well Control, Inc. and
The Prudential Insurance Company of America(17)
10.09 -- Participation Rights Agreement dated July 23, 1998, by
and among Boots & Coots International Well Control, Inc.,
The Prudential Insurance Company of America and certain
stockholders of Boots & Coots International Well Control,
Inc.(18)
10.10 -- Common Stock Purchase Warrant dated July 23, 1998, issued to The Prudential Insurance Company of America(19)
10.11 -- Loan Agreement dated October 28, 1998, between Boots &
Coots International Well Control, Inc. and Comerica
Bank - Texas(20)
10.12 -- Security Agreement dated October 28, 1998, between
Boots & Coots International Well Control, Inc. and Comerica
Bank - Texas(21)
10.13 -- Executive Employment Agreement of Jerry Winchester(22)
10.14 -- Executive Employment Agreement of Dewitt Edwards(23)
10.15 -- Office Lease for 777 Post Oak(24)
10.16 -- Open
10.17 -- Open
10.18 -- Third Amendment to Loan Agreement dated April 21, 2000 (25)
10.19 -- Fourth Amendment to Loan Agreement dated May 31, 2000(26)
10.20 -- Fifth Amendment to Loan Agreement dated May 31, 2000(27)
10.21 -- Sixth Amendment to Loan Agreement dated June 15, 2000(28)
10.22 -- Seventh Amendment to Loan Agreement dated December 29,2000(29)
10.23 -- Subordinated Note Restructuring Agreement with The Prudential Insurance Company of America dated December 28, 2000
10.25 -- Preferred Stock and Warrant Purchase Agreement, dated April 15, 1999, with Halliburton Energy Services, Inc. (30)
10.26 -- Letter of Engagement, dated April 10, 2000, with Maroon Bells (31)
10.27 -- Form of Warrant issued to Specialty Finance Fund I, LLC and to Turner, Volker, Moore (32)
10.28 -- Amended and Restated Purchase and Sale Agreement with National Oil Well, L.P.(33)
21.01 -- List of subsidiaries(34)
24.01 -- Power of Attorney (included on Signature Page)
(b) Reports on Form 8-K
None
18
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.
BOOTS & COOTS INTERNATIONAL WELL
CONTROL, INC.
By: /s/ LARRY H. RAMMING
--------------------------------------------
Larry H. Ramming
Chief Executive Officer
(Principal Financial and Accounting Officer)
Date: May 11, 2001
19