UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): February 24, 2015
COMSTOCK RESOURCES, INC.
(Exact Name of Registrant as Specified in Charter)
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STATE OF NEVADA
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001-03262
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94-1667468
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(State or other
jurisdiction incorporation)
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(Commission File Number)
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(I.R.S. Employer
Identification Number)
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5300 Town and Country Boulevard
Suite 500
Frisco, Texas 75034
(Address of principal executive offices)
(972) 668-8800
(Registrant's Telephone No.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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¨
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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¨
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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¨
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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¨
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 2.02 Results of Operations and Financial Condition
On February 24, 2015, Comstock announced a revision to its previously reported net income for the quarter and year ended December 31, 2014 which is attached hereto as Exhibit 99.1. The corrected results are a net loss of $58.3 million or $1.26 per share for the three months ended December 31, 2014 rather than $55.1 million of a net loss or $1.19 per share, as originally reported. For the year ended December 31, 2014, the corrected results are a net loss of $57.1 million or 1.24¢ per share rather than $53.9 million of net income or $1.17 per share, as originally reported. The revised loss is due to reporting a lower income tax benefit in both periods to give effect to recognizing that a portion of certain state net operating loss carryforwards are not expected to be utilized before their expiration.
The earnings press release contains financial measures that are not in accordance with generally accepted accounting principles in the United States ("GAAP"). Comstock has provided reconciliations within the earnings release of the non-GAAP financial measures to the most directly comparable GAAP financial measures. Operating cash flow is presented in the earnings release because management believes it to be useful to investors. EBITDAX is presented in the earnings release because management believes that EBITDAX, which represents Comstock's results from operations before interest, income taxes, and certain non-cash items, including depreciation, depletion and amortization and exploration expense, is a common alternative measure of operating performance used by certain investors and financial analysts. The non-GAAP financial measures described above should be considered in addition to, but not as a substitute for, measures of financial performance prepared in accordance with GAAP that are presented in the earnings release.
Item 9.01 Financial Statements and Exhibits
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Exhibit 99.1
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Press Release dated February 24, 2015.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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COMSTOCK RESOURCES, INC.
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||
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Dated: February 24, 2015
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By:
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/s/ ROLAND O. BURNS
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Roland O. Burns
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President and Chief Financial Officer
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Exhibit 99.1
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5300 Town and Country Blvd., Suite 500
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Frisco, Texas 75034
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Telephone: (972) 668-8834
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Contact: Gary H. Guyton
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Director of Planning and Investor Relations
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Web Site: www.comstockresources.com
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NEWS RELEASE
For Immediate Release
COMSTOCK RESOURCES, INC. REVISES
FOURTH QUARTER AND ANNUAL 2014
FINANCIAL RESULTS
FRISCO, TEXAS, February 24, 2015 – Comstock Resources, Inc. ("Comstock" or the "Company") (NYSE: CRK) today reported revised financial results for the quarter and year ended December 31, 2014.
Financial Results for the Three Months and Year ended December 31, 2014
Comstock revised the loss it previously announced to $58.3 million or $1.26 per share for the three months ended December 31, 2014. The revised loss is due to reporting a lower income tax benefit of $26.1 million as compared to the previously announced benefit of $29.3 million. The reduced tax benefit gives effect to recognizing that a portion of certain state net operating loss carryforwards are not expected to be able to be utilized before their expiration. The previously reported net loss excluding unusual items remains unchanged at $8.7 million (19¢ per share) in 2014's fourth quarter. For the year ended December 31, 2014, Comstock revised the net loss to $57.1 million, or $1.24 per share. The year-end 2014 results excluding unusual items remains unchanged at a loss of $1.7 million (5¢ per share).
Comstock also announced that one of the financial covenants in its bank credit facility was recently amended such that the maximum ratio of total debt to EBITDAX was increased from 4:1 to 5:1 for 2015. The Company expects to be in compliance with its bank credit facility financial covenants throughout 2015.
This press release may contain "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and are subject to a number of factors and uncertainties which could cause actual results to differ materially from those described herein. Although the Company believes the expectations in such statements to be reasonable, there can be no assurance that such expectations will prove to be correct.
Comstock Resources, Inc. is an independent energy company based in Frisco, Texas and is engaged in oil and gas acquisitions, exploration and development primarily in Texas and Louisiana. The Company's stock is traded on the New York Stock Exchange under the symbol CRK.
COMSTOCK RESOURCES, INC.
OPERATING RESULTS
(In thousands, except per share amounts)
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Three Months Ended December 31, 2014
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Year Ended December 31, 2014
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|||||||||||||||
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As Revised
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As Previously Reported
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As Revised
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As Previously Reported
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|||||||||||||
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Revenues:
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||||||||||||||||
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Oil sales
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$
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80,487
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$
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80,487
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$
|
389,770
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$
|
389,770
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||||||||
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Natural gas sales
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32,129
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32,129
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165,461
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165,461
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||||||||||||
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Total revenues
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112,616
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112,616
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555,231
|
555,231
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||||||||||||
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Operating expenses:
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||||||||||||||||
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Production taxes
|
5,360
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5,360
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23,797
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23,797
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||||||||||||
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Gathering and transportation
|
2,858
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2,858
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12,897
|
12,897
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||||||||||||
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Lease operating
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15,384
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15,384
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60,283
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60,283
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||||||||||||
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Exploration
|
7,954
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7,954
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19,403
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19,403
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||||||||||||
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Depreciation, depletion and amortization
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94,885
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94,885
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378,275
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378,275
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||||||||||||
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General and administrative
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6,469
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6,469
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32,379
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32,379
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||||||||||||
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Impairment of oil and gas properties
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59,997
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59,997
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60,268
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60,268
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||||||||||||
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Total operating expenses
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192,907
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192,907
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587,302
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587,302
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||||||||||||
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Operating loss
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(80,291
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)
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(80,291
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)
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(32,071
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)
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(32,071
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)
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||||||||
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Other income (expenses):
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||||||||||||||||
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Gain from derivative financial instruments
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10,938
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10,938
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8,175
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8,175
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||||||||||||
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Other income
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214
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214
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727
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727
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||||||||||||
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Interest expense
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(15,272
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)
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(15,272
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)
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(58,631
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)
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(58,631
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)
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||||||||
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Total other income (expenses)
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(4,120
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)
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(4,120
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)
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(49,729
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)
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(49,729
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)
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||||||||
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Loss before income taxes
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(84,411
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)
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(84,411
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)
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(81,800
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)
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(81,800
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)
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||||||||
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Benefit from income taxes
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26,140
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29,344
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24,689
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27,893
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||||||||||||
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Net loss
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$
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(58,271
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)
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$
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(55,067
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)
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$
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(57,111
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)
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$
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(53,907
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)
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||||
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Net loss per share:
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||||||||||||||||
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Basic
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$
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(1.26
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)
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$
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(1.19
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)
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$
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(1.24
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)
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$
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(1.17
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)
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||||
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Diluted
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$
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(1.26
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)
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$
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(1.19
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)
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$
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(1.24
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)
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$
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(1.17
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)
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||||
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Dividends per common share
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$
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0.125
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$
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0.125
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$
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0.50
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$
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0.50
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||||||||
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Weighted average shares outstanding:
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||||||||||||||||
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Basic
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46,306
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46,306
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46,547
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46,547
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||||||||||||
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Diluted
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46,306
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46,306
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46,547
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46,547
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||||||||||||
COMSTOCK RESOURCES, INC.
OPERATING RESULTS
(In thousands)
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Three Months Ended
December 31, 2014
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Year Ended
December 31, 2014
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||||||||||||||||
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As Revised
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As Previously Reported
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As Revised
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As Previously Reported
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||||||||||||||
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OPERATING CASH FLOW:
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|||||||||||||||||
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Net income (loss)
|
$
|
(58,271
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)
|
$
|
(55,067
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)
|
$
|
(57,111
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)
|
$
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(53,907
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)
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|||||
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Reconciling items:
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|||||||||||||||||
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Deferred income taxes
|
(26,164
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)
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(29,368
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)
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(24,677
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)
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(27,881
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)
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|||||||||
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Depreciation, depletion and amortization
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94,885
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94,885
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378,275
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378,275
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|||||||||||||
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Impairment of oil and gas properties
|
59,997
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59,997
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60,268
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60,268
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|||||||||||||
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Dry hole costs, rig termination fees and lease impairments
|
7,554
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7,554
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19,003
|
19,003
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|||||||||||||
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Gain on derivative financial instruments
|
(10,938
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)
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(10,938
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)
|
(8,175
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)
|
(8,175
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)
|
|||||||||
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Cash settlements of derivative financial instruments
|
14,847
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14,847
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9,145
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9,145
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|||||||||||||
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Amortization of debt discount, premium and
issuance costs |
957
|
957
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4,097
|
4,097
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|||||||||||||
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Stock-based compensation
|
2,855
|
2,855
|
10,697
|
10,697
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|||||||||||||
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Operating cash flow from continuing operations
|
85,722
|
85,722
|
391,522
|
391,522
|
|||||||||||||
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Excess income taxes from stock-based compensation
|
(32
|
)
|
(32
|
)
|
1,055
|
1,055
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|||||||||||
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Decrease in accounts receivable
|
22,478
|
22,478
|
2,221
|
2,221
|
|||||||||||||
|
Increase in other current assets
|
(5,805
|
)
|
(5,805
|
)
|
(7,366
|
)
|
(7,366
|
)
|
|||||||||
|
Increase (decrease) in accounts payable and accrued expenses
|
(30,362
|
)
|
(30,362
|
)
|
13,552
|
13,552
|
|||||||||||
|
Net cash provided by operating activities
|
$
|
72,001
|
$
|
72,001
|
$
|
400,984
|
$
|
400,984
|
|||||||||
|
EBITDAX:
|
|||||||||||||||||
|
Net loss from continuing operations
|
$
|
(58,271
|
)
|
$
|
(55,067
|
)
|
$
|
(57,111
|
)
|
$
|
(53,907
|
)
|
|||||
|
Interest expense
|
15,272
|
15,272
|
58,631
|
58,631
|
|||||||||||||
|
Benefit from income taxes
|
(26,140
|
)
|
(29,344
|
)
|
(24,689
|
)
|
(27,893
|
)
|
|||||||||
|
Depreciation, depletion and amortization
|
94,885
|
94,885
|
378,275
|
378,275
|
|||||||||||||
|
Exploration
|
7,954
|
7,954
|
19,403
|
19,403
|
|||||||||||||
|
Impairment of oil and gas properties
|
59,997
|
59,997
|
60,268
|
60,268
|
|||||||||||||
|
(Gain) loss on derivative financial instruments
|
(10,938
|
)
|
(10,938
|
)
|
(8,175
|
)
|
(8,175
|
)
|
|||||||||
|
Cash settlements of derivative financial instruments
|
14,847
|
14,847
|
9,145
|
9,145
|
|||||||||||||
|
Stock-based compensation
|
2,855
|
2,855
|
10,697
|
10,697
|
|||||||||||||
|
Total EBITDAX
|
$
|
100,461
|
$
|
100,461
|
$
|
446,444
|
$
|
446,444
|
|||||||||
|
As of
|
||||||||
|
December 31, 2014
|
||||||||
|
As Revised
|
As Previously Reported
|
|||||||
|
BALANCE SHEET DATA:
|
||||||||
|
Cash and cash equivalents
|
$
|
2,071
|
$
|
2,071
|
||||
|
Other current assets
|
59,146
|
59,146
|
||||||
|
Property and equipment, net
|
2,198,169
|
2,198,169
|
||||||
|
Other
|
14,951
|
14,951
|
||||||
|
Total assets
|
$
|
2,274,337
|
$
|
2,274,337
|
||||
|
Current liabilities
|
$
|
162,171
|
$
|
162,171
|
||||
|
Long-term debt
|
1,070,445
|
1,070,445
|
||||||
|
Deferred income taxes
|
154,547
|
151,343
|
||||||
|
Other non-current liabilities
|
16,902
|
16,902
|
||||||
|
Stockholders' equity
|
870,272
|
873,476
|
||||||
|
Total liabilities and stockholders' equity
|
$
|
2,274,337
|
$
|
2,274,337
|
||||