-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DicmX5hRTEoHwOPHL+0HxovhinooxVfAvfndddLy578NpuFo8jBtFQoy9GxQ71NC VV9jmlDhvs7rj2PskS8guQ== 0000922423-96-000231.txt : 19960701 0000922423-96-000231.hdr.sgml : 19960701 ACCESSION NUMBER: 0000922423-96-000231 CONFORMED SUBMISSION TYPE: SP 15D2 PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960506 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: 3-D GEOPHYSICAL INC CENTRAL INDEX KEY: 0001003382 STANDARD INDUSTRIAL CLASSIFICATION: 1382 IRS NUMBER: 133841601 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SP 15D2 SEC ACT: 1934 Act SEC FILE NUMBER: 000-27564 FILM NUMBER: 96556847 BUSINESS ADDRESS: STREET 1: 200 MADISON AVE CITY: NEW YORK STATE: NY ZIP: 10016 BUSINESS PHONE: 3032900214 MAIL ADDRESS: STREET 1: 200 MADISON AVENUE CITY: NEW YORK STATE: NY ZIP: 10016 SP 15D2 1 SPECIAL REPORT - - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K* FOR ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995 COMMISSION FILE NO. 0-27564 3-D GEOPHYSICAL, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 13-3841601 (State of incorporation) (I.R.S. Employer Identification Number) 7076 SOUTH ALTON WAY, BUILDING H, ENGLEWOOD, COLORADO 80112 (Address of principal executive office) (zip code) Registrant's telephone number, including area code: (303) 290-0214 Securities registered pursuant to Section 12(b) of the Act: NONE Securities registered pursuant to Section 12(g) of the Act: COMMON STOCK, PAR VALUE $.01 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 twelve (12) months (or for such shorter period that the registrant was required to file such report(s)), and (2) has been subject to the filing requirements for the past ninety (90) days. YES X NO --- ---- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K [X ]. The aggregate market value of the registrant's Common Stock held by non-affiliates as of May 3, 1996 was approximately $65,796,960, based on the average of the high and low prices of the registrant's Common Stock on the Nasdaq National Market on such date. As of May 3, 1996, the registrant had outstanding 7,600,000 shares of Common Stock, $.01 par value. - - -------------------------------------------------------------------------------- * The Annual Report on Form 10-K is being filed pursuant to Rule 15d-2 under the Securities Exchange Act of 1934 and contains only certified financial statements as required by Rule 15d-2. On February 9, 1996, 3-D Geophysical, Inc. (the "Company") consummated its initial public offering (the "Offering") of 4,000,000 shares of common stock, par value $.01 per share (the "Common Stock"), at $7.50 per share. Subsequently, on February 21, 1996 the underwriters exercised their over-allotment option to purchase an additional 600,000 shares at $7.50 per share. The proceeds, net of the underwriters' commissions and estimated Offering costs were $28,879,000. Simultaneously with the Offering, the Company acquired in separate transactions, in exchange for cash, notes and shares of Common Stock, Geoevaluaciones, S.A., de C.V. ("GEO"), Procesos Interactivos Avanzados, S.A. de C.V. ("PIASA"), certain assets and liabilities of the land seismic business of Northern Geophysical of America, Inc. ("Northern"), Paragon Geophysical, Inc. ("Paragon") and Kemp Geophysical Corporation ("Kemp" and, collectively with GEO, PIASA, Northern and Paragon, the "Founding Companies"). Approximately $13,593,000 of the proceeds was used to pay the cash portion of the purchase price of the Founding Companies. A detailed description of the Offering and the acquisitions of the Founding Companies is included within the Registration Statement (Registration Statement No. 33- 99240) filed with the Securities and Exchange Commission (the "Commission"). Rule 15d-2 ("Rule 15d-2") under the Securities Exchange Act of 1934, as amended, provides generally that if a registrant files a registration statement under the Securities Act of 1933, as amended, which does not contain certified financial statements for the registrant's last full fiscal year (or for the life of the registrant if less than a full fiscal year), then the registrant shall, within 90 days after the effective date of the registration statement, file a special report furnishing certified financial statements for such last full fiscal year or other period as the case may be. Rule 15d-2 further provides that such special financial report is to be filed under cover of the facing shoat appropriate for annual reports of the registrant. The Company's Form S-1 Registration Statement referenced above did not contain the certified financial statements contemplated by Rule 15d-2, therefore, as required by Rule 15d-2, these are being filed with the Commission under cover of the facing page of an Annual Report on Form 10-K. - 2 - PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a)(1) List of Financial Statements filed as part of the Form 10-K The following Financial Statements of 3-D Geophysical, Inc. are filed as part of this Form 10-K. Page numbers refer to this Form 10-K: 3-D GEOPHYSICAL, INC.: Report of Independent Accountants........................ 4 Balance Sheet............................................ 5 Notes to Financial Statements............................ 6 3-D GEOPHYSICAL, INC.: Pro Forma Consolidated Financial Statements.............. 7 Pro Forma Consolidated Balance Sheet..................... 8 Pro Forma Consolidated Statement of Operations........... 10 Notes to Pro Forma Consolidated Financial Statements..... 11 COMBINED FINANCIAL STATEMENTS OF GEOEVALUACIONES, S.A. DE D.V. Report of Independent Accountants........................ 14 Combined Balance Sheet................................... 15 Combined Statement of Operations......................... 16 Combined Statement of Changes in Stockholders' Equity.... 17 Combined Statement of Cash Flows......................... 18 Notes to Combined Financial Statements................... 19 (a)(2) List of Financial Statement Schedules filed as part of this Form 10-K None. (b) Reports on Form 8-K Not applicable to this filing. (c) Exhibits None. - 3 - EX-99 2 FINANCIAL STATEMENTS Report of Independent Accountants To the Board of Directors and Stockholders of 3-D Geophysical, Inc.: We have audited the accompanying balance sheet of 3-D Geophysical, Inc. as of December 31, 1995. This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statement referred to above presents fairly, in all material respects the financial position of 3-D Geophysical, Inc. as of December 31, 1995, in conformity with generally accepted accounting principles. COOPERS & LYBRAND L.L.P. Houston, Texas April 16, 1996 - 4 - 3-D GEOPHYSICAL, INC. Balance Sheet December 31, 1995 DECEMBER 31, ASSETS 1995 Deferred issuance costs $ 1,775,833 Organization costs 10,000 ------------ Total assets $ 1,785,833 ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $ 1,268,225 Amounts due Paragon Geophysical 517,093 ---------- Total liabilities 1,785,318 Stockholders' equity: Common stock, $1.00 par value, 1,000 shares authorized, 515.4 shares issued and outstanding 515 ---------- Total stockholders' equity 515 Total liabilities and stockholders' equity $ 1,785,833 ============ The accompanying notes are an integral part of this financial statement. - 5 - 3-D GEOPHYSICAL, INC. NOTES TO FINANCIAL STATEMENT 1. BASIS OF PRESENTATION: 3-D Geophysical, Inc. (the "Company") is a newly-organized corporation, formed in March 1995. The Company was formed to facilitate the acquisition and consolidation of land-based seismic data acquisition businesses and has not commenced operations. On February 9, 1996, the Company consummated an initial public offering (the "Offering") of 4,000,000 shares of common stock, par value $.01 per share. Subsequently, on February 21, 1996, the underwriters exercised their over-allotment option to purchase an additional 600,000 shares at $7.50 per share. The proceeds to the Company, net of underwriters' commissions and estimated Offering costs were $28, 879,000. Immediately prior to the consummation of the Offering, the Company effected a 2,717.66-for-one split of the Common Stock. 2. DEFERRED ISSUANCE COST: The following costs related to the Offering have been deferred and were charged against the gross proceeds of the Offering upon its consummation. Legal fees $ 679,402 Accounting fees 543,750 Printing costs 250,000 Miscellaneous 302,681 ------- $ 1,775,833 ============= - 6 - PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS The following pro forma consolidated financial statements include the pro forma consolidated balance sheet of 3-D Geophysical, Inc., as of December 31, 1995, and the pro forma consolidated statement of operations for the year ended December 31, 1995. The pro forma financial statements have been prepared as if (a) the acquisition of Geoevaluaciones, S.A. de C.V. ("Geoevaluaciones"), Procesos Interactivos Avanzados, S.A. de C.V. ("PIASA"), the land seismic assets of Northern Geophysical of America, Inc. ("Northern"), Kemp Geophysical Corporation ("Kemp") and Paragon Geophysical, Inc. ("Paragon") (collectively referred to as the "Founding Companies"), and (b) the initial public offering (the "Offering") had been completed. 3-D Geophysical, Inc. has filed with the Securities and Exchange Commission a Registration Statement No. 33-99240 on Form S-1 in connection with the Offering, effective February 6, 1996. Simultaneously with the consummation of the Offering, 3-D Geophysical will acquire in separate transactions, in exchange for cash, notes and shares of Common Stock, the Founding Companies. For accounting purposes, the acquisition of Geoevaluaciones and PIASA has been treated as a recapitalization of Geoevaluaciones and PIASA with Geoevaluaciones (combined with PIASA) as the acquiror of 3-D Geophysical. Accordingly, Geoevaluaciones' net assets are valued at historical cost and the consideration given to former stockholders of Geoevaluaciones and PIASA is treated for accounting purposes as a dividend. The acquisitions of the other Founding Companies are being treated as business combinations accounted for by the purchase method of accounting as prescribed by Accounting Principles Board Opinion No. 16 and Staff Accounting Bulletin No. 48. The acquisition of Paragon's common stock in exchange for shares of Common Stock is accounted for at Paragon's historical cost. Northern and Kemp are being valued at the fair market value of consideration given. In connection with the acquisitions of Northern and Kemp, the excess of consideration given over the fair market value of net assets received will be amortized on a straight-line basis over 15 years. The pro forma consolidated balance sheet as of December 31, 1995 gives effect to the acquisitions of the Founding Companies and the Offering as if such transactions had occurred on December 31, 1995. The pro forma consolidated statement of operations for the year ended December 31, 1995 assumes the Company had completed the transactions on January 1, 1995. The pro forma consolidated financial statements of the Founding Companies have been derived from the audited historical financial statements of Geoevaluaciones and unaudited historical financial statements of Northern's land-based seismic operations, Kemp and Paragon for the year ended December 31, 1995. These pro forma consolidated statements of operations may not be indicative of actual results that would have been achieved if the transactions had occurred on the dates indicated or the results which may be realized in the future. Neither expected benefits and cost reductions anticipated by the Company nor future corporate costs of the Company have been reflected in the pro forma consolidated statements of operations. - 7 -
3-D GEOPHYSICAL, INC. PRO FORMA CONSOLIDATED BALANCE SHEET Year Ended December 31, 1995 (In thousands, except per share amounts) Recapit- alized 3-D Geo- Recap- 3-D Acquired Entities Geophys- evaluac- itali- Geophys- ---------------------------- ical iones zation ical Northern Paragon Kemp -------- -------- -------- -------- -------- -------- -------- ASSETS Current assets: Cash and cash equivalents.$ 0 $ 609 $ 0 $ 609 $ 0 $ 244 $ 5 Restricted cash .......... 0 0 0 0 0 0 0 Accounts receivable: - Trade .................. 0 1,786 0 1,786 7,089 389 1,182 - Other .................. 0 158 0 158 59 73 35 Other ........................ 0 239 0 239 9 4 12 - --- - --- - - -- ------ Total current assets . 0 2,792 0 2,792 7,157 710 1,234 Property and plant, net ...... 0 1,746 0 1,746 3,324 3,035 4,185 Goodwill ..................... 0 0 0 0 0 0 0 ............................ Other assets ................. 1,786 10 0 1,796 15 557 72 ............................ Total assets ........ $ 1,786 $ 4,548 $ 0 $ 6,334 $ 10,496 $ 4,302 $ 5,491 ======== ======== ======== ======== ======== ======== ========
3-D GEOPHYSICAL, INC. PRO FORMA CONSOLIDATED BALANCE SHEET Year Ended December 31, 1995 (In thousands, except per share amounts) Pro Forma Pro Adjusted Adjustments Forma Offering Pro Forma ----------- --------- -------- --------- ASSETS Current assets: Cash and cash equivalents. ($10,397)a ($10,164) $32,085e $ 5,849 (625)b (2,510)c (1,000)f (9,909)f (2,653)f Restricted cash .......... 0 0 1,000f 1,000 Accounts receivable: - Trade .................. 307)h 10,139 0 10,139 - Other .................. 0 325 0 325 Other ........................ 0 264 0 264 -- -------- -------- -------- -------- Total current assets . (11,329) 564 17,013 17,577 Property and plant, net ...... 1,304a 13,594 0 13,594 Goodwill ..................... 5,806a 6,325 0 6,325 ............................ 519b Other assets ................. (517)h 1,923 1,420d 137 ............................ (3,206)e Total assets ........ ($ 4,217) $ 22,406 $ 15,227 $ 37,633 ======== ======== ======== ========
- 8 -
3-D GEOPHYSICAL, INC. PRO FORMA CONSOLIDATED BALANCE SHEET Year Ended December 31, 1995 (In thousands, except per share amounts) Recapit- alized 3-D Geo- Recap- 3-D Acquired Entities Geophys- evaluac- itali- Geophys- ----------------- ical iones zation ical Northern Paragon Kemp -------- -------- -------- -------- -------- -------- -------- LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current maturities of long-term debt and capital lease $ 0 $ 182 $ 0 $ 182 $ 463 $4,651 $1,360 Accounts payable ........ 1,268 1,003 0 2,271 5,850 172 704 Accrued liabilities ..... 517 1,006 0 1,523 538 281 132 ------ ------- -------- ------- ------- ------ ------ Total current liabilit 1,785 2,191 0 3,976 6,851 5,104 2,196 Long-term debt and capital leas 0 0 0 0 358 0 2,895 ............................ Long-term accrued liability .. 0 0 0 0 0 0 0 Dividend payable ............. 0 0 4,510c 4,510 0 0 0 Deferred income taxes ........ 0 530 0 530 103 0 0 Stockholders' equity: Common stock ............ 1 320 0 321 0 3 24 Preferred stock ......... 0 0 0 0 0 0 0 Additional paid in capital 0 0 0 0 3,184 150 690 Retained earnings (deficit 0 4,363 (4,510)c (147) 0 (955) (314) Cumulative foreign currency translation adjustments 0 (2,856) 0 (2,856) 0 0 0 ------ ------- -------- ------- ------- ------ ------ Total stockholders' equity ... 1 1,827 (4,510) (2,682) 3,184 (802) 400 ------ ------- -------- ------- ------- ------ ------ Total liabilities and stockholders' $1,786 $ 4,548 $ 0 $ 6,334 $10,496 $4,302 $5,491 ====== ======= ======== ======= ======= ====== ======
3-D GEOPHYSICAL, INC. PRO FORMA CONSOLIDATED BALANCE SHEET Year Ended December 31, 1995 (In thousands, except per share amounts) Pro Forma Adjusted Adjust- Pro Pro Forma ments Forma Offering Pro Forma LIABILITIES AND -------- ------- -------- --------- STOCKHOLDERS' EQUITY Current liabilities: Current maturities of long-term debt and capital lease $ 0 $ 6,656 ($6,656)f $ 500 500c Accounts payable ........ (307)h 8,690 8,690 Accrued liabilities ..... (517)h 1,957 1,420d 724 (2,653)f -------- ------- -------- ------- Total current liabilit (824) 17,303 (7,389) 9,914 Long-term debt and capital leas 0 3,253 (3,253)f 500 ............................ 500c Long-term accrued liability .. 0 0 1,000c 1,000 Dividend payable ............. 0 4,510 (4,510)c 0 Deferred income taxes ........ (103)a 530 530 Stockholders' equity: Common stock ............ (318)g 30 46e 76 Preferred stock ......... 0 0 0 Additional paid in capital (4,241)g (217) 28,833e 28,616 Retained earnings (deficit 1,269g (147) (147) Cumulative foreign currency translation adjustments 0 (2,856) (2,856) -------- ------- -------- ------- Total stockholders' equity ... (3,290) (3,190) 28,879 25,689 -------- ------- -------- ------- Total liabilities and stockholders' ($4,217) $22,406 $ 15,227 $37,633 ======== ======= ======== =======
- 9 -
3-D GEOPHYSICAL, INC. PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1995 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Recapit alized Geo- 3-D Acquired Entities Pro Forma Adjustments evaluaci Recapita- Geophys- -------------------------- --------------------------- ones lization ical Northern Paragon Kemp Northern Paragon Kemp ------ ------- ------ ------ ------ ------ ----- ------ ------ Net sales......................... $9,825 $ 0 $9,825 $21,920 $4,695 $3,605 $ 0 $ 0 ($193)hh Expenses: Cost of data acquisition....... 5,968 0 5,968 18,480 3,852 2,794 0 0 (193)hh Depreciation and amortization.. 662 0 662 1,749 566 238 387cc 0 35cc (212)dd General and administrative..... 1,038 0 1,038 1,447 464 838 0 0 0 ------ ------- ------ ------ ------ ------ ----- ------ ------ Total operating expenses... 7,668 0 7,668 21,676 4,882 3,870 175 0 (158) ------ ------ ------ ------ ------ ------ ----- ------ ------ Operating income (loss) 2,157 0 2,157 244 (187) (265) (175) 0 (35) Other income (expense): Miscellaneous.................. 503 0 503 (89) (7) 9 0 0 0 Interest expense............... (803) (80)aa (883) (263) (367) (88) 0 0 0 Foreign currency gains (losses) (120) 0 (120) 0 0 0 0 0 0 ----- ----- ------ ------ ------ ------- ----- ------ ------ Income (loss) before provision for income taxes............... 1,737 (80) 1,657 (108) (561) (344) (175) 0 (35) Provision (benefit) for income tax 130 (28)ee 102 0 0 0 (99)ee (196)ee (133)ee ------ ----- ------ ------ ------ ------ ----- ------ ------ Net income (loss).............. $1,607 ($52) $1,555 ($108) ($561) ($344) ($76) $196 $ 98 ====== ===== ====== ====== ====== ====== ===== ====== ====== Pro forma earnings (loss) per share
3-D GEOPHYSICAL, INC. PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1995 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Pro Offer- Pro Forma ing Forma ------- ----- ------- Net sales......................... $39,852 $ 0 $39,852 Expenses: Cost of data acquisition....... 30,901 0 30,901 Depreciation and amortization.. 3,425 0 3,425 General and administrative..... 3,787 0 3,787 ------- ----- ------- Total operating expenses... 38,113 0 38,113 ------- ----- ------- Operating income (loss) 1,739 0 1,739 Other income (expense): Miscellaneous.................. 416 0 416 Interest expense............... (1,601) 1,521bb (80) Foreign currency gains (losses) (120) 0 (120) ------- ----- ------- Income (loss) before provision for income taxes............... 434 1,521 1,955 Provision (benefit) for income tax (326) 532ee 206 ------- ----- ------- Net income (loss).............. 760 $989 $1,749 ======= ===== ======= Pro forma earnings (loss) per share $ 0.21ff $0.23gg
====== ===== - 10 - 3-D GEOPHYSICAL, INC. NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 1995 1. PRO FORMA BALANCE SHEET ADJUSTMENTS The accompanying pro forma consolidated balance sheet as of December 31, 1995, gives effect to the Acquisitions and the Offering as if such transactions had occurred on December 31, 1995. (a) Adjustments to reflect the acquisition of Northern for cash of $10,450,000 reduced by outstanding indebtedness of $821,000 and increased by $768,000 for net working capital assumed. Fixed assets have been written up by $1,304,000 to reflect their fair market value. Total goodwill recognized is $5,806,000. (b) Adjustments to reflect the acquisition of Kemp for cash of $625,000 and stock valued at $294,000. Does not include $725,000 which may be payable in cash as contingent consideration and included as part of the acquisition price. Total goodwill recognized is $519,000. (c) Adjustments to reflect the acquisition of Geoevaluaciones and PIASA which includes cash of $2,510,000 and debt of $1,000,000 (bearing interest at 8%). Additionally, $1,000,000 (reduced by amounts paid in settlement of any contingent liabilities existing at the date of acquisition) will be held by the Company as restricted cash and paid to the former owners of Geoevaluaciones and PIASA in June 1997 related to certain non-competition agreements. The consideration paid to the former stockholders of Geoevaluaciones and PIASA, other than the common stock portion, is equal to $4,510,000 and is treated for accounting purposes as a dividend. The dividend consists of $2,510,000 of cash, the $1,000,000 of debt, and the $1,000,000 related to certain non-competition agreements. (d) Reflects the accrual of estimated expenses related to the Offering incurred subsequent to December 31, 1995. (e) Reflects the issuance of 4,600,000 shares of $0.01 par value Common Stock at an initial public offering price of $7.50 per share, net of underwriters' discount of $0.525 per share and the reclassification of deferred issuance costs estimated to be $3,206,000. (f) Reflects the payment of accrued expenses incurred in connection with the Offering ($2,653,000) and the repayment of the Founding Companies debt ($9,909,000) as well as the payment of the cash portion of the Geoevaluaciones dividend ($4,510,000, see Note c) and funding of a restricted cash account related to certain Geoevaluaciones non-competition agreements ($1,000,000). - 11 - (g) Adjustments to reflect the Acquisitions and the capital structure of the company before the Offering: Common Stock Paragon's Common Stock........................................ $ (3) Kemp's Common Stock........................................... (24) Adjustment to Reflect Post- Acquisition Capital Structure of 3-D.......................... (291) ----- $ (318) =========== Additional Paid in Capital Paragon's Common Stock and Retained Deficit................... $ (952) Adjustment to Reflect Post-Acquisition Capital Structure of 3-D.............................................. 291 Northern's Additional Paid in Capital......................... (3,184) Kemp's Additional Paid in Capital............................. (690) Common Stock Issued to Kemp Shareholders...................... 294 -------- $ (4,241) ======== Retained Deficit Paragon's Retained Deficit.................................... $ 955 Kemp's Retained Deficit....................................... 314 ----------- $ 1,269 ========= (h) Reflects the elimination of inter-company accounts: Elimination of Accounts Receivables: Kemp due from GEO-Kemp Joint Venture.................... $ 169 GEO-Kemp Joint Venture due from Kemp.................... 114 Kemp due to GEO......................................... 24 ----------- $ 307 =========== Elimination of Accounts Payable: Kemp due to GEO-Kemp Joint Venture...................... $ 169 GEO-Kemp Joint Venture due to Kemp...................... 114 Kemp due to GEO......................................... 24 ----------- $ 307 =========== Elimination of Other Assets: Paragon due from 3-D.................................... $ 517 ----------- $ 517 =========== Elimination of Accrued Liabilities: 3-D due to Paragon...................................... $ 517 ----------- $ 517 =========== - 12 - 2. PRO FORMA STATEMENT OF OPERATIONS ADJUSTMENTS The accompanying pro forma consolidated statement of operations for the year ended December 31, 1995, assume that the Company had completed the Acquisitions and the Offering on January 1, 1995. (aa) To record interest expense at 8% related to the promissory notes issued to the stockholders of Geoevaluaciones. (bb) Reflects the elimination of interest expense related to debt and capital leases that will be extinguished from proceeds of the Offering. (cc) To record amortization of goodwill over 15 years: TOTAL ANNUAL GOODWILL AMORTIZATION Northern.............. $5,806 $387 Kemp.................. 519 35 ------ ---- $6,325 $422 ======= ==== (dd) Adjustment to reduce Northern's depreciation to standardize depreciable life of 3-D data acquisition equipment with other Founding Companies. (ee) incremental adjustment in income tax expense as a result of items (aa)- (dd), assuming statutory rate of 35% in U.S. and Mexico and consolidated returns for U.S. federal tax purposes. (ff) The number of shares used in the pro forma earnings per share calculation is determined as follows: Shares Issued to 3-D Geophysical Stockholders..... 1,400,681 Shares Issued to Acquire Geoevaluaciones.......... 217,647 Shares Issued to Acquire PIASA.................... 28,235 Shares Issued to Acquire Paragon.................. 1,314,261 Shares Issued to Acquire Kemp..................... 39,176 Shares Issued to Fund Dividend.................... 601,333 --------- 3,601,333 ========= (gg) The number of shares outstanding after the Offering is 7,600,000. (hh) Reflects the elimination of inter-company accounts: Elimination of Accounts Receivable: GEO-Kemp Joint Venture rental to Kemp........ $ 169 GEO services to Kemp......................... 24 -- $ 193 ====== - 13 - Report of Independent Accountants To the Shareholders of Geoevaluaciones, S.A. de C.V. and Procesos Interactivos Avanzados, S.A. de C.V. We have audited the accompanying combined balance sheet of Geoevaluaciones, S.A. de C.V. and Procesos Interactivos Avanzados, S.A. de C.V. as of December 31, 1995, and 1994 and the related combined statements of operations, changes in stockholders' equity and cash flows for each of the three years in the period ended December 31, 1995. These combined financial statements are the responsibility of the Companies' management. Our responsibility is to express an opinion on these combined financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the combined financial statements referred to above present fairly, in all material respects, the combined financial position of Geoevaluaciones, S.A. de C.V. and Procesos Interactivos Avanzados, S.A. de C.V. as of December 31, 1995 and 1994 and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1995 in conformity with generally accepted accounting principles. COOPERS & LYBRAND Mexico City, Mexico May 1, 1996 - 14 - GEOEVALUACIONES, S.A. DE C.V. Balance Sheets as of December 31, 1995 and 1994 (Stated in US dollars) ASSETS 1995 1994 ---- ---- Current Assets: Cash $ 609,480 $ 241,823 Accounts receivable: Trade 1,786,364 2,326,635 Other 157,690 99,580 Other assets 238,730 304,884 ----------- ---------- Total current assets 2,792,264 2,972,922 Investment in shares 9,610 14,769 Equipment, net 1,746,044 3,460,008 ---------- ---------- Total assets $4,547,918 $6,447,699 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable $ - $ 206,782 Current portion of obligation under capital lease - 415,215 Current portion of long-term debt 181,744 - Accounts payable 1,003,511 2,137,719 Accrued liabilities 1,005,673 967,329 Income taxes payable - 26,283 ----------- ---------- Total current liabilities 2,190,928 3,753,328 Long term liabilities: Long term debt - 309,000 Deferred tax liability 530,250 752,409 Commitments and Contingencies (Notes 8, 9 and 13) Stockholders' equity: Common stock 319,796 292,133 Retained earnings 4,362,577 3,457,670 Cumulative translation adjustment (2,855,633) (2,116,841) ----------- ----------- Total stockholders equity 1,826,740 1,632,962 ---------- ----------- Total liabilities and stockholders' equity $4,547,918 $6,447,699 ========== ========== The accompanying notes are an integral part of these financial statements. - 15 - GEOEVALUACIONES S.A. DE C.V. Statements of Operations for the years ended December 31, 1995, 1994 and 1993 (Stated in US dollars) 1995 1994 1993 ---- ---- ---- Net Revenues $ 9,824,541 $17,660,155 $17,638,376 Cost of seismic and geophysical services 5,967,924 11,003,937 13,146,011 ----------- ----------- ----------- 3,856,617 6,656,218 4,492,365 Expenses: General and administrative expenses 1,037,658 1,814,000 1,280,335 Depreciation and amortization 661,657 1,468,357 989,992 Interest income (264,648) (164,598) (151,504) Interest expense 803,149 466,463 1,031,902 Foreign currency transaction (gains) or losses 119,722 92,118 (32,778) Miscellaneous (237,774) 76,816 (118,510) ------------- ---------- ----------- 2,119,764 3,753,156 2,999,437 Income before provision for income tax 1,736,853 2,903,062 1,492,928 Provisions for income tax 130,044 1,000,402 417,815 ------------ --------- ----------- Net income $ 1,606,809 $ 1,902,660 $ 1,075,113 ============ ============ =========== The accompanying notes are an integral part of these financial statements. - 16 - GEOEVALUACIONES, S.A. DE C.V. Statements of Changes in Stockholders' Equity for the years ended December 31, 1995, 1994 and 1993 (Stated in US dollars)
Cumulative Foreign Currency Common Retained Translation Stock Earnings Adjustments Total ----- -------- ----------- ----- Balance January 1, 1993 $ 58,049 $ 979,575 $ (54,287) $ 983,337 Capital contribution for Procesos Interactivos Avanzados S.A. de C.V 4,502 -- -- 4,502 Dividends paid to shareholders -- (270,096) -- (270,096) Stock dividend issued to shareholders 229,582 (229,582) -- -- Foreign currency translation adjustments -- -- 13,724 13,724 Net income for the year -- 1,075,113 -- 1,075,113 ------- ---------- ----------- ---------- Balance December 31, 1993 292,133 1,555,010 (40,563) 1,806,580 Foreign currency translation adjustments -- -- (2,076,278) (2,076,278) Net income for the year -- 1,902,660 -- 1,902,660 ------- ---------- ----------- ----------- Balance December 31, 1994 292,133 3,457,670 (2,116,841) 1,632,962 Capital contribution for PIASA 27,663 -- -- 27,663 Dividend paid to shareholders -- (701,902) -- (701,902) Foreign currency translation adjustments -- -- (738,792) (738,792) Net income for the year -- 1,606,809 -- 1,606,809 ------- ---------- ----------- ---------- Balance December 31, 1995 $319,796 $4,362,577 $(2,855,633) $1,826,740 ======== ========== =========== ==========
The accompanying notes are an integral part of these financial statements. - 17 - GEOEVALUACIONES, S.A. DE C.V. Statements of Cash Flows for the years ended December 31, 1995, 1994 and 1993 (Stated in US dollars)
1995 1994 1993 ---- ---- ---- Cash flows from operating activities: Net income $1,606,809 $1,902,660 $1,075,113 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 661,657 1,468,357 989,992 Gain on sale of fixed assets (350,430) Effect of change in exchange rate on operating assets and liabilities 197,319 (61,328) 108,854 (Increase) decrease in receivables 504,363 368,591 (1,065,155) (Increase) decrease in other assets 66,154 (56,098) 299,238 Increase (decrease) in accounts payable (1,156,410) 356,398 70,175 Increase (decrease) in accrued liabilities 38,744 (484,815) 669,373 Provision for deferred income taxes 130,044 962,628 7,779 Increase (decrease) in taxes payable (26,283) (57,249) 43,729 ---------- ---------- ---------- Total adjustments 65,158 2,496,484 1,123,985 ---------- ---------- ---------- Net cash provided by operating activities 1,671,967 4,399,144 2,199,098 Cash flows from investing activities: Purchase of equipment (146,776) (3,262,335) (714,601) Proceeds on sale of equipment 350,430 Investment in other assets -- -- (31,959) ---------- ---------- ---------- Net cash provided by (used in) investing activities 203,654 (3,262,335) (746,560) Cash flows from financing activities: Payment of dividends (701,902) -- (270,096) Net borrowings under factor agreements (206,782) (1,314,965) 1,300,465 Issuance of Common Stock 27,663 -- 4,502 Payments on borrowings and capital leases (542,471) (742,972) (1,097,450) ---------- ---------- ---------- Net cash used by financing activities (1,423,492) (2,057,937) (62,579) ---------- ---------- ---------- Net increase (decrease) in cash 452,129 (921,128) 1,389,959 Cash at beginning of period 241,823 1,858,343 469,886 Effect of change in exchange rate on cash balance (84,472) (695,392) (1,502) ---------- ---------- ---------- Cash at end of period $609,480 $241,823 $1,858,343 ========== ========== ==========
The accompanying notes are an integral part of these financial statements. - 18 - GEOEVALUACIONES S.A. DE C.V. PROCESOS INTERACTIVOS AVANZADOS, S.A. DE C.V. Notes to the Combined Financial Statements For the years ended December 31, 1995, 1994 and 1993 1. ORGANIZATION The accompanying combined financial statements include the accounts of Geoevaluaciones, S.A. de C.V. ("Geoevaluaciones" or the "Company") and Procesos Interactivos, S.A. de C.V. ("PIASA") (collectively the "Companies"). Geoevaluaciones, a Mexican corporation, was organized in 1977 and is engaged in the acquisition of seismic data. The results of operations of Geoevaluaciones are included for each of the three year periods. PIASA was established during 1993 and is engaged in processing seismic data for sale mainly to Geoevaluaciones. The results of operations for PIASA are included from inception in November, 1993. Transactions between the two companies have been eliminated in the financial statements. 2. SIGNIFICANT ACCOUNTING POLICIES REVENUE RECOGNITION The Companies generate revenue through performing contract seismic data acquisition services. Revenues from contract seismic data services are recognized as the work progresses on the percentage of completion method or as sold. MAJOR CUSTOMER One customer, PEMEX, which is owned by the Mexican government, accounts for approximately 98% of the revenues of Geoevaluaciones for the year ended December 31, 1995. As of December 31, 1995 and 1994, this customer accounted for approximately 100% and 99%, respectively of the Companies' trade accounts receivable. FOREIGN CURRENCY TRANSLATION These financial statements use the Mexican peso as the functional currency. Assets and liabilities are translated into U.S. dollars at the prevailing exchange rate at the respective balance sheet date. The resultant translation adjustments are included in stockholders' equity. Income and expenses are translated at the average exchange rate during the respective reporting period. Gains or losses resulting from foreign currency transactions are included in income currently. PROPERTY AND EQUIPMENT Property and equipment is stated at cost, adjusted for accumulated depreciation and amortization. Equipment under capital leases is stated at the present value of future minimum lease payments at the inception of the leases. Property and equipment are depreciated on the - 19 - straight-line method over the estimated useful lives of assets, which range from three to seven years. Equipment held under capital lease is amortized on the straight-line method over the estimated useful life of the assets or the terms of the lease. FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amount reported in the balance sheets for cash, accounts receivable, accounts payable and notes payable approximates fair value because of the immediate or short-term maturity of these financial instruments. The carrying amount of the obligation under capital lease approximates fair value because the lease agreements bear interest at variable rates which are adjusted monthly. The carrying amount reported for long-term debt approximates fair value based on current replacement values. ACCOUNTING FOR INCOME TAXES Income taxes are computed under the provisions of the Financial Accounting Standards Board Statement No. 109, Accounting for Income Taxes ("SFAS 109"). Under SFAS 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to the differences between the financial statement carrying value of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured by using enacted tax rates that are applicable to the future years in which deferred tax assets or liabilities are expected to be realized or settled. Under SFAS 109, the effect of a change in tax rates on deferred tax assets and liabilities is recognized in earnings in the period in which the tax rate change was enacted. The Companies establish a valuation allowance when it is more likely than not that a deferred tax asset will not be recovered. RECENT ACCOUNTING PRONOUNCEMENT In March, 1995, the FASB issued Statement of Financial Accounting Standards No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be disposed of ("Statement 121"). Statement 121 addresses the accounting for the impairment of long-lived assets, certain identifiable intangibles to be held and used. It also addresses the accounting for long-lived assets and certain identifiable intangibles to be disposed of. Statement 121 establishes guidance for recognizing and measuring impairment losses and requires that the carrying amount of impaired assets be reduced to fair value. Statement 121 will be effective for fiscal years beginning after December 15, 1995. Management does not expect the impact of the adoption of Statement 121 to have a material impact on the Companies' financial condition or results of operations. USE OF ESTIMATES The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the combined financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. - 20 - 3. OTHER ASSETS: Other assets consist of the following as of December 31: 1995 1994 ---- ---- Prepaid income tax $153,434 $235,805 Guaranty deposits 7,389 42,114 Deposits with suppliers 49,810 - Prepaid insurance 28,097 26,965 --------- --------- $238,730 $304,884 ======== ======== 4. PROPERTY & EQUIPMENT, NET Equipment consists of the following as of December 31: 1995 1994 ---- ---- Tools and equipment $2,403,711 $3,580,676 Transportation equipment 698,379 1,119,131 Furniture and fixtures 35,330 50,330 Computer equipment 352,221 1,146,548 ----------- ---------- 3,489,641 5,896,685 Less: accumulated depreciation (1,743,597) (2,436,677) ---------- ---------- Equipment, net $1,746,044 $3,460,008 ========== ========== Property and equipment includes the following items under capital lease agreements at December 31, 1994: Equipment $1,717,965 Less: accumulated amortization (761,003) -------- $ 956,962 =========== 5. ACCRUED LIABILITIES Accrued expenses consist of the following as of December 31: 1995 1994 ---- ---- Value added tax payable $ 328,094 $273,558 Accrued salaries, wages and payroll taxes 226,818 335,027 Other accrued expenses 450,761 358,744 ----------- -------- $1,005,673 $967,329 ========== ======== - 21 - 6. NOTES PAYABLE Notes payable at December 31, 1994 consist of notes payable of $206,782 to a Mexican bank under an accounts receivable factoring agreement bearing interest at 24%. The total accounts receivable serving as collateral under the factoring agreements was approximately $260,000 at December 31, 1994. These invoices are all stated in Mexican pesos which amounted to 1,300,000 pesos. 7. LONG TERM DEBT The Companies purchased equipment from a supplier for $350,000 in 1994. In order to purchase this equipment, the Company entered into payment plan with the supplier for this amount. At December 31, 1995 and 1994, $181,744 and $309,000 remained outstanding, respectively. This loan is payable on a monthly basis, has a stated interest rate of 10% and is collateralized by the equipment. The loan is payable in monthly installments ending in 1996. 8. LEASES The Companies rent office facilities under annual operating leases. Rent expense was $298,900, $302,140 and $489,512 for the years ended December 31, 1995, 1994 and 1993, respectively. 9. EMPLOYEE BENEFITS (SENIORITY PREMIUM) The Company is required under Mexican Law to provide certain retirement benefits to substantially all employees. These benefits generally consist of 12 days salary for each year of service paid upon the retirement of the employee or voluntary termination, once the employee has 15 years of service. The Companies have not established a funding plan for this liability. The components of the net plan costs are as follows: 1995 1994 1993 ---- ---- ---- Service cost on benefits earned during the period $2,717 $3,019 $3,139 Interest cost on projected benefit obligation 1,225 1,408 1,334 Net amortization and deferral 318 354 396 ------ ------ ------ Net pension cost/expense $4,260 $4,781 $4,869 ====== ====== ====== - 22 - The actuarial present value of benefit obligations and the funded status for the Company's plans were as follows as of December 31: 1995 1994 ---- ---- Benefit obligation Vested benefits $2,980 $3,371 Non vested benefits 1,325 1,625 Accumulated benefit obligation 4,305 4,996 Projected salary increases 8,522 7,613 -------- -------- Projected benefit obligation 12,827 12,609 -------- -------- Projected benefit obligation in excess of plan assets (12,827) (12,609) Unrecognized net transition obligation 3,825 4,249 Unrecognized net gain (3,899) (4,333) -------- -------- Net plan liability $12,901 $12,693 ======== ======== Assumptions used in developing the projected benefit obligation as of December 31 were as follows: 1995 1994 1993 ---- ---- ---- Discount rate 16% 14% 12% Rate of increase in compensation 10% 10% 10% The Company is also required, under Mexican Law, to pay a profit sharing bonus to employees each year. This bonus is calculated as 10% of taxable income adjusted for certain items, the most significant of which are the inflation adjustments recorded for tax purposes and foreign currency exchange gains or losses recognized on an accrual basis. This item which amounted to $121,400 in 1995, $171,340 in 1994 and $183,310 in 1993 is included in general and administrative expenses. - 23 - 10. INCOME TAXES The classification of the provision for income taxes is as follows: 1995 1994 1993 ---- ---- ---- Current $ -- $37,774 $410,036 Deferred - Tax depreciation in excess of depreciation for financial reporting 130,044 962,628 7,779 -------- ---------- -------- Provision for income taxes $130,044 $1,000,402 $417,815 ======== ========== ======== The difference between the statutory Mexican federal income tax rate of 34% on income before taxes and the Companies' reported provision for income taxes, is summarized as follows: 1995 1994 1993 ---- ---- ---- Tax expense at statutory rate $546,346 $987,041 $507,596 Non-deductible profit sharing expense 42,500 65,166 62,325 Net effects of inflation (458,802) (51,805) (152,106) --------- ----------- --------- Tax expense at actual rate $130,044 $1,000,402 $417,815 ========= =========== ========= The deferred tax liability at December 31, 1995, 1994 and 1993 is the result of the difference between the financial statement carrying value and the tax basis of property and equipment. 11. COMMON STOCK Common stock for Geoevaluaciones consists of 1,200,000 shares of N$1 par value variable capital stock. In 1993, the Company capitalized $229,582 of earnings by issuing 229,582 shares of common stock. The Companies are required under Mexican law, to establish a legal reserve equal to 5% of each Company's earnings until such time as the reserve equals 20% of the minimum capital of the Company. - 24 - 12. SUPPLEMENTARY CASH FLOW INFORMATION The following supplementary cash flow transactions occurred in each year. 1995 1994 1993 ---- ---- ---- Interest paid $788,900 $449,950 $680,200 Income taxes paid 26,283 209,006 366,307 Equipment acquired under capital leases -- 556,985 118,176 Equipment acquisitions financed under long-term finance plan -- 306,000 -- Stock issued through stock dividend -- -- 229,582 13. COMMITMENTS AND CONTINGENCIES One of the Companies' suppliers is currently in dispute with the Mexican government as to whether or not the supplier is subject to value added taxes. The Companies have not paid value added taxes on invoices from the supplier. In the event that the supplier is considered to be subject to value added taxes in Mexico, the Companies would be required to pay the supplier value added taxes on past invoices at rates of 10% or 15% depending on the date of the invoice. These taxes would be recoverable by the Companies against value added tax charged on invoices issued to its customers or by requesting a refund. The Company has a dispute, and may be threatened by litigation, in connection with certain agreements into by Geoevaluaciones with Capilano International Inc., a Canadian company ("Capilano"). The dispute concerns a certain Letter of Intent and a Technical Assistance Agreement, dated June 1, 1991 and June 3, 1992, respectively (the "Capilano Agreements"). Geoevaluaciones maintains that it is not obligated to compensate Capilano for certain services Geoevaluaciones believes were either inadequately provided or not provided at all by Capilano. The parties also disagree upon how certain profits and losses should be allocated under the Capilano Agreements. While the parties have had discussions in the past to attempt to resolve the dispute, the most recent discussions were in February 1995 and there have been no further developments since that time. Under the agreement pursuant to which 3-D Geophysical, Inc. ("D-D") acquires Geoevaluaciones, a portion of the purchase price amounting to $1,000,000 will be withheld and will be applied to amounts paid by the Company, if any, in settlement or otherwise in connection with the dispute with Capilano. 14. Subsequent Events On February 9, 1996, the stockholders of Geoevaluaciones (the "Geoevaluaciones Stockholders") sold all of the issued and outstanding shares of capital stock of GEO to 3-D. Pursuant to the Geoevaluaciones stock purchase agreement, the aggregate consideration which was paid to the Geoevaluaciones Stockholders by 3-D was: (i) $2.45 million paid in cash at closing; and (ii) $1.0 million paid by delivery at closing of four promissory notes, payable in installments at six, 12 and 24 months after the - 25 - closing in the following aggregate amounts (which amounts include interest at 8% per annum): $290,000, $280,000 and $260,000, respectively. In connection with this acquisition, each of the Geoevaluaciones Stockholders entered into a separate non-competition agreement with 3-D pursuant to which 3-D paid to the Geoevaluaciones Stockholders: (i) 100,000 shares of 3-D common stock, par value $.01 ("the Common Stock") issued at closing to trusts with Mexican banks for the benefit of Geoevaluaciones Stockholders and to be released two years after the consummation of the Offering; and (ii) $2.0 million, reduced by the amount of any liabilities Geoevaluaciones has not disclosed to 3-D and by any amount paid by Geoevaluaciones to settle or otherwise in connection with Geoevaluaciones' dispute with Capilano, such portion of the consideration consisting of (a) $1.0 million in cash deposited at the closing in a bank account, and which, subject to any such reduction, may be disbursed only upon the approval of certain individuals; and (b) 117,647 shares of Common Stock delivered at closing to trusts with Mexican banks for the benefit of the Geoevaluaciones Stockholders, and which may not be released until June 30, 1997 and then only upon the approval of certain individuals. Pursuant to such stock purchase agreement, 3-D agreed to assume up to an aggregate of $600,000 of the obligations under any borrowings of Geoevaluaciones from a bank or other financial institution for working capital purposes. On February 6, 1996, the stockholders of PIASA, pursuant to a stock purchase agreement dated November 7, 1995, sold all of the shares of capital stock of PIASA to 3-D. The aggregate consideration paid by 3-D was approximately $300,000 consisting of $60,000 in cash and approximately 28,235 shares of Common Stock. -26- SIGNATURES Pursuant to the requirements of 15(d) 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. 3-D GEOPHYSICAL, INC. Date: May 6, 1996 By: /s/Richard D. Davis ------------------- Richard D. Davis, President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. SIGNATURE TITLE DATE /s/Richard D. Davis - - ------------------------ Richard D. Davis President and Chief May 6, 1996 Executive Officer (principal executive officer), Director /s/John D. White, Jr. - - ------------------------ Treasurer and Chief May 6, 1996 John D. White, Jr. Financial Officer (principal financial and accounting officer), Director /s/Luis Ferran - - ------------------------ Luis Ferran Director May 6, 1996 /s/Ralph M. Bahna - - ------------------------ Ralph M. Bahna Director May 6, 1996 /s/Douglas W. Brandrup - - ------------------------ Douglas W. Brandrup Director May 6, 1996 /s/P. Dennis O'Brien - - ------------------------ P. Dennis O'Brien Director May 6, 1996 /s/Arthur D. Emil - - ------------------------ Arthur D. Emil Director May 6, 1996 /s/Robert Pace Andrews - - ----------------------- Robert Pace Andrews Director May 6, 1996 /s/Joel Friedman - - ----------------------- Joel Friedman Director May 6, 1996 /s/Emir L Tavella - - ----------------------- Emir L Tavella Director May 6, 1996 - 26 - -----END PRIVACY-ENHANCED MESSAGE-----