brn-20211231

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 quarterly period ended December 31, 2021

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number 1-5103

BARNWELL INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)


Delaware						72-0496921
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

1100 Alakea Street, Suite 500, Honolulu, Hawaii						96813
(Address of principal executive offices)						(Zip code)

(808) 531-8400
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.50 par value	BRN	NYSE American

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 ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☒

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of February 7, 2022 there were 9,447,220 shares of common stock, par value $0.50, outstanding.

BARNWELL INDUSTRIES, INC.

AND SUBSIDIARIES

INDEX


PART I.	FINANCIAL INFORMATION:
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets - December 31, 2021 and September 30, 2021	3
	Condensed Consolidated Statements of Operations - three months ended December 31, 2021 and 2020	4
	Condensed Consolidated Statements of Comprehensive Income - three months ended December 31, 2021 and 2020	5
	Condensed Consolidated Statements of Equity (Deficit) - three months ended December 31, 2021 and 2020	6
	Condensed Consolidated Statements of Cash Flows - three months ended December 31, 2021 and 2020	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 4.	Controls and Procedures	35
PART II.	OTHER INFORMATION:
Item 1A.	Risk Factors	36
Item 6.	Exhibits	37
	Signature	38
	Index to Exhibits	39

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


	December 31, 2021		September 30, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	12,142,000	$	11,279,000

Accounts and other receivables, net of allowance for doubtful accounts of: $355,000 at December 31, 2021; $391,000 at September 30, 2021	3,186,000		3,069,000
Income taxes receivable	519,000		530,000
Asset held for sale	—		687,000
Other current assets	2,696,000		2,470,000
Total current assets	18,543,000		18,035,000


Asset for retirement benefits	2,312,000		2,229,000

Operating lease right-of-use assets	252,000		296,000
Property and equipment:
Oil and natural gas properties, full cost method of accounting:
Proved properties	63,040,000		58,490,000
Unproved properties	—		962,000
Drilling rigs and other property and equipment	7,711,000		7,960,000
Total property and equipment	70,751,000		67,412,000
Accumulated depletion, depreciation, and amortization	(64,183,000)		(63,537,000)
Total property and equipment, net	6,568,000		3,875,000
Total assets	$	27,675,000	$	24,435,000

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	1,207,000	$	1,416,000
Accrued capital expenditures	2,754,000		909,000
Accrued compensation	821,000		1,073,000
Accrued operating and other expenses	1,141,000		1,171,000



Current portion of asset retirement obligation	1,216,000		713,000

Other current liabilities	728,000		619,000
Total current liabilities	7,867,000		5,901,000
Long-term debt	47,000		47,000
Operating lease liabilities	159,000		180,000
Liability for retirement benefits	2,117,000		2,101,000
Asset retirement obligation	6,267,000		6,340,000
Deferred income tax liabilities	391,000		359,000
Total liabilities	16,848,000		14,928,000
Commitments and contingencies
Equity:
Common stock, par value $0.50 per share; authorized, 20,000,000 shares: 9,614,683 issued at December 31, 2021 and 9,613,525 issued at September 30, 2021	4,807,000		4,807,000
Additional paid-in capital	4,846,000		4,590,000
Retained earnings	3,429,000		2,356,000
Accumulated other comprehensive income, net	7,000		32,000
Treasury stock, at cost: 167,900 shares at December 31, 2021 and September 30, 2021	(2,286,000)		(2,286,000)
Total stockholders' equity	10,803,000		9,499,000
Non-controlling interests	24,000		8,000
Total equity	10,827,000		9,507,000
Total liabilities and equity	$	27,675,000	$	24,435,000

See Notes to Condensed Consolidated Financial Statements

BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three months ended December 31,
	2021		2020
Revenues:
Oil and natural gas	$	3,920,000	$	1,887,000
Contract drilling	876,000		1,942,000
Sale of interest in leasehold land	600,000		485,000
Gas processing and other	58,000		73,000
	5,454,000		4,387,000
Costs and expenses:
Oil and natural gas operating	1,916,000		1,435,000
Contract drilling operating	980,000		1,108,000
General and administrative	1,830,000		1,185,000
Depletion, depreciation, and amortization	483,000		276,000
Impairment of assets	—		630,000
Interest expense	—		1,000
	5,209,000		4,635,000
Earnings (loss) before equity in income of affiliates and income taxes	245,000		(248,000)
Equity in income of affiliates	1,207,000		1,054,000
Earnings before income taxes	1,452,000		806,000
Income tax provision	112,000		63,000
Net earnings	1,340,000		743,000
Less: Net earnings attributable to non-controlling interests	267,000		159,000
Net earnings attributable to Barnwell Industries, Inc.	$	1,073,000	$	584,000
Basic and diluted net earnings per common share attributable to Barnwell Industries, Inc. stockholders	$	0.11	$	0.07
Weighted-average number of common shares outstanding:
Basic and diluted	9,446,291		8,277,160

See Notes to Condensed Consolidated Financial Statements

BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three months ended December 31,
	2021		2020
Net earnings	$	1,340,000	$	743,000
Other comprehensive (loss) income:
Foreign currency translation adjustments, net of taxes of $0	(25,000)		(234,000)
Retirement plans:
Amortization of accumulated other comprehensive loss into net periodic benefit cost, net of taxes of $0	—		33,000


Total other comprehensive loss	(25,000)		(201,000)
Total comprehensive income	1,315,000		542,000
Less: Comprehensive income attributable to non-controlling interests	(267,000)		(159,000)
Comprehensive income attributable to Barnwell Industries, Inc.	$	1,048,000	$	383,000

See Notes to Condensed Consolidated Financial Statements

BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)

Three months ended December 31, 2021 and 2020

(Unaudited)


	Shares Outstanding	Common Stock		Additional Paid-In Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Non-controlling Interests		Total Equity (Deficit)
Balance at September 30, 2020	8,277,160	$	4,223,000	$	1,350,000	$	(3,897,000)	$	(1,435,000)	$	(2,286,000)	$	92,000	$	(1,953,000)
Net earnings	—	—		—		584,000		—		—		159,000		743,000
Foreign currency translation adjustments, net of taxes of $0	—	—		—		—		(234,000)		—		—		(234,000)
Distributions to non-controlling interests	—	—		—		—		—		—		(248,000)		(248,000)
Retirement plans:
Amortization of accumulated other comprehensive loss into net periodic benefit cost, net of taxes of $0	—	—		—		—		33,000		—		—		33,000

SEC Form 10-Q filed by Barnwell Industries Inc.