-----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, NVdhIU648jrlYc9Bz4v07M0azzdvYT3G58jxA1thL/gTkq2QlLvUomj1RLazdC4b OIq+jN7ZkTqRNx2EsSq9jA== 0000906280-97-000083.txt : 19970514 0000906280-97-000083.hdr.sgml : 19970514 ACCESSION NUMBER: 0000906280-97-000083 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970314 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970513 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUPERIOR ENERGY SERVICES INC CENTRAL INDEX KEY: 0000886835 STANDARD INDUSTRIAL CLASSIFICATION: OIL, GAS FIELD SERVICES, NBC [1389] IRS NUMBER: 752379388 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-20310 FILM NUMBER: 97602528 BUSINESS ADDRESS: STREET 1: 1503 ENGINEERS ROAD CITY: BELLE CHASSE STATE: LA ZIP: 70037 BUSINESS PHONE: 5043937774 MAIL ADDRESS: STREET 1: PO BOX 6220 CITY: NEW ORLEANS STATE: LA ZIP: 70174 FORMER COMPANY: FORMER CONFORMED NAME: SMALLS OILFIELD SERVICES CORP DATE OF NAME CHANGE: 19930328 8-K/A 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K/A CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 DATE OF REPORT (Date of earliest event reported): March 14, 1997 SUPERIOR ENERGY SERVICES, INC. (Exact name of Registrant as specified in its charter) DELAWARE 0-20310 75-2379388 (State or other jurisdiction of (Commission File Number) (IRS Employer identification incorporation Identification) or organization) 1503 ENGINEERS ROAD, BELLE CHASSE, LOUISIANA 70037 (Address of principal executive offices, Zip Code) Registrant's telephone number, including area code: (504) 393-7774 The undersigned registrant hereby amends the following items, financial statements, exhibits or other portions of its Current Report on Form 8-K dated March 14, 1997, as set forth in the page(s) attached hereto: Item 7. Financial Statements and Exhibits (a) Financial statements of business acquired. The financial statements of the business acquired filed as part of this report are listed in the Financial Information Table of Contents appearing on page 3 hereof. (b) Pro forma financial information. The pro forma financial statements of Superior filed as part of this report are listed in the Financial Information Table of Contents appearing on page 12 hereof. (c) Exhibits. 23.1 Consent of KPMG Peat Marwick LLP 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. Superior Energy Services, Inc. Date: May 13, 1997 By: /s/ Terence E. Hall ---------------------------- Terence E. Hall Chairman of the Board, Chief Executive Officer and President (Principal Executive Officer) Date: May 13, 1997 By: /s/ Robert S. Taylor ---------------------------- Robert S. Taylor Chief Financial Officer (Principal Financial and Accounting Officer) INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page NAUTILUS PIPE & TOOL RENTAL, INC. Independent Auditors Report 3 Balance Sheet at December 31, 1996 4 Statement of Operations and Retained Earnings for the year ended December 31, 1996 5 Statement of Cash Flows for the year ended December 31, 1996 6 Notes to Financial Statements 7 Pro Forma Consolidated Financial Statements Unaudited Pro Forma Condensed Balance Sheet as of December 31, 1996 12 Unaudited Pro Forma Condensed Statement of Earnings for the year ended December 31, 1996 13 Notes to unaudited Pro Forma Condensed Financial Information 14 Independent Auditors' Report The Board of Directors Nautilus Pipe & Rental Tool, Inc. We have audited the accompanying balance sheet of Nautilus Pipe & Rental Tool, Inc. as of December 31, 1996, and the related statements of operations and retained earnings and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements 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 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 audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Nautilus Pipe & Rental Tool, Inc. as of December 31, 1996, and the results of its operations and its cash flows for the year then ended, in conformity with generally accepted accounting principles. KPMG PEAT MARWICK LLP New Orleans, Louisiana April 17, 1997 NAUTILUS PIPE & RENTAL TOOL, INC. BALANCE SHEET DECEMBER 31, 1996 ASSETS Current Assets: Accounts receivable - net allowance for doubtful accounts of $10,000 $1,189,739 Accounts receivable - affiliate 195,491 Other 1,560 ---------- Total current assets 1,386,790 Property and equipment - net 2,446,669 ---------- $3,833,459 ========== LIABILITIES AND SHAREHOLDER'S EQUITY Current liabilities: Notes payable - current $ 827,000 Accounts payable and accrued expenses 78,307 Income taxes payable 86,735 Deferred income taxes 336,043 --------- Total current liabilities 1,328,085 Notes payable 588,681 Due to shareholder 483,541 Deferred income taxes 154,805 Stockholder's equity: Common stock no par value, authorized 1,000 shares; issued -100 shares 168,569 Treasury stock (40,000) Retained earnings 1,149,778 --------- Total stockholder's equity 1,278,347 --------- $3,833,459 ========== NAUTILUS PIPE & RENTAL TOOL, INC. STATEMENT OF OPERATIONS AND RETAINED EARNINGS YEAR ENDED DECEMBER 31, 1996 Revenues $4,424,334 ---------- Expenses: Cost of services 1,401,313 General and administrative 1,559,924 Interest 125,094 Depreciation 556,150 ---------- Income before income taxes 781,853 Provision for income taxes 300,923 ---------- Net income 480,930 Retained earnings at beginning of year 668,848 ---------- Retained earnings at end of year $1,149,778 ========== NAUTILUS PIPE & RENTAL TOOL, INC. STATEMENT OF CASH FLOWS DECEMBER 31, 1996 Cash flows from operating activities Net income $ 480,930 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 556,150 Deferred income taxes 129,748 Allowance for doubtful accounts 10,000 Net change in operating assets and liabilities: Accounts receivable (117,863) Accounts receivable - affiliates 66,762 Other current assets 7,821 Accounts payable (106,182) Income taxes payable 1,639 Other 18,521 ----------- Net cash provided by operating activities 1,047,526 Cash flows used in investing activities: Purchases of property and equipment (1,312,124) ----------- Net cash used in investing activities (1,312,124) Cash flows from (used in) financing activities: Notes payable 322,321 Due to shareholder (69,315) ----------- Net cash provided by financing activities 253,006 Net decrease in cash (11,592) Cash at beginning of year 11,592 ----------- Cash at end of year $ - =========== NAUTILUS PIPE & RENTAL TOOL, INC. Notes to Financial Statements December 31, 1996 (1) Organization and Summary of Significant Accounting Policies (a) Organization Nautilus Pipe & Rental Tool, Inc., rents specialized equipment used in oil and gas well drilling, work-over, completion and production activities. (b) Use of Estimates The preparation of financial statements requires management to make estimates and assumptions that effect the reported amounts in the financial statements and related disclosures. Actual results could differ from these estimates. (c) Property and Equipment Property and equipment is carried at cost. Depreciation is computed using the straight-line method based on the following estimated useful lives: Estimated Description useful lives ----------- ------------ Buildings and improvements 30 years Machinery and equipment 5-15 years Automobiles, trucks, trailers and tractors 3-5 years Furniture and equipment 5-7 years (d) Income Taxes The Company provides for income taxes in accordance with Statement of Financial Accounting Standards (FAS) No. 109, Accounting for Income Taxes. FAS No. 109 requires an asset and liability approach for financial accounting and reporting for income taxes. Deferred income taxes reflect the impact of temporary differences between amounts of assets and liabilities for financial reporting purposes and such amounts as measured by tax laws. (e) Cash Flows For purposes of the statement of cash flows, cash equivalents include demand deposits with original maturities of less than three months. (f) Revenue Recognition The Company recognizes revenues as services are provided. (2) Concentration of Credit Risk The Company's financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents and trade accounts receivable. The Company places cash and temporary cash investments with high quality financial institutions. A majority of the Company's business is conducted with major oil and gas exploration companies with operations in the Gulf of Mexico. The Company continually evaluates the financial strength of their customers but does not require collateral to support the customer receivables. Customers which accounted for 10 percent or more of operating revenue were as follows for the year ended December 31, 1996: Baker Hughes, Inc. 18.2% Chevron USA 11.0% Shell Offshore, Inc. 10.0% (3) Property and Equipment A summary of property and equipment at December 31, 1996 follows: Buildings and improvements $ 262,479 Automobiles, trucks, trailers 211,174 Furniture and equipment 23,828 Machinery and equipment 3,840,725 ------------ 4,338,206 Less accumulated depreciation (1,891,537) ------------ Property and equipment - net $ 2,446,669 ============ (4) Notes Payable The Company's notes payable as of December 31, 1996 consists of the following: Revolving line of credit in the original amount of $670,000 due May, 1997, annual interest rate of 8.25% $ 570,000 Equipment loan due May, 1998, annual interest of 8.35% 361,541 Equipment loan due April, 1998, annual interest of 8.05% 236,442 Equipment loan due December, 1999, annual interest of 9.75% 117,352 Other installment notes payable with interest rates ranging from 7.75% to 10.5% due in monthly installments through 1999 130,346 ---------- 1,415,681 Less current portion 827,000 ---------- Long-term debt $ 588,681 ========== Maturities of long-term debt for the five years ended December 31, 2001 are as follows: $827,000, $544,000, $45,000, none and none, respectively. (5) Commitments and Contingencies The Company leases facilities in Houma and Lafayette, Louisiana under operating leases. Total rent expense in 1996 was $30,000. Future minimum lease payments under these non-cancelable leases for the five year's ended December 31, 2001 are as follows: $26,000, $14,000, $3,000, $3,000 and $3,000, respectively. From time to time the Company is involved in litigation arising out of operations in the normal course of business. In management's opinion, the Company is not involved in any litigation, the outcome of which would have a material effect on its business operations. (6) Income Taxes The components of income tax expense for the year ended December 31, 1996 are as follows: Current - Federal $ 171,175 Deferred - Federal 129,748 ---------- $ 300,923 ========== The significant components of deferred tax assets and liabilities at December 31, 1996 are as follows: Deferred tax assets: Alternative Minimum Tax Carry Forward $ 46,709 Other 25,159 --------- 71,868 --------- Deferred tax liabilities: Accounts receivable (407,911) Property and equipment (154,805) --------- (562,716) --------- $(490,848) ========= The deferred tax assets reflect management's estimate of the amount which will be realized from future profitability which can be predicted with reasonable certainty. A reconciliation between the statutory federal income tax rate and the Company's effective tax rate on pre-tax income for the year ended December 31, 1996 is as follows: Federal income tax rate 34.0% Entertainment expense 3.3 Officers life insurance 1.3 Other (.1) ----------- Effective income tax rate 38.5% =========== (7) Subsequent Event On February 28, 1997, the Company was merged with Superior Energy Services, Inc. and the former shareholder's of the Company received cash of $4,000,000, a promissory note of $2,150,000 and 420,000 shares of Superior Energy Services, Inc.'s common stock. The Company's obligation to pay under the promissory note having an aggregate value of $2,150,000 is subject to the Company meeting specified earnings levels through December 31, 1999. b) Pro Forma Financial Information: The following unaudited pro forma condensed financial information is derived from the historical financial statements of Superior Energy Services, Inc., Baytron, Inc., Dimensional Oilfield Services, Inc. and Nautilus Pipe and Rental Tool, Inc. Adjustments have been made to reflect the financial impact of purchase accounting for the Baytron, Dimensional and Nautilus acquisitions which would have been effected had the acquisitions taken place on January 1, 1996 with respect to operating data and December 31, 1996 with respect to balance sheet data. The acquisitions of Baytron, Inc. and Dimensional Oil Field Services, Inc. have been previsously report. The pro forma adjustments are described in the accompanying notes and are based upon preliminary estimates and certain assumptions that management of the companies believe reasonable in the circumstances. This pro forma information is not necessarily indicative of the results of the operations had the acquisitions been effected on the assumed date. As part of the acquisition of Nautilus, the Company also acquired Superior Bearing & Machine Works, Inc. The financial information for Superior Bearing & Machine Works, Inc. is considered immaterial and is not reflected in the pro forma information. SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES Unaudited Pro Forma Condensed Balance Sheet December 31, 1996 (in thousands)
Historical Historical Pro Forma Superior Nautilus Adjustments Pro Forma Assets Cash $ 433 $ - $ - $ 433 Accounts Receivable Trade 6,966 1,191 - 8,157 Other - 195 - 195 Deferred Tax Asset 137 - - 137 Inventories 1,197 2 - 1,199 Other 345 - - 345 -------- -------- --------- --------- Total Current 9,078 1,388 - 10,466 Assets Property, Plant & Equipment - Net 9,894 2,447 (A)2,007 14,348 Goodwill 8,239 - (A)2,770 11,009 Other Assets 1,126 - - 1,126 -------- -------- --------- --------- Total Assets $ 28,337 $ 3,835 $ 4,777 $ 36,949 ======== ======== ========= ========
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES Unaudited Pro Forma Condensed Balance Sheet December 31, 1996 (in thousands)
Historical Historical Pro Forma Superior Nautilus Adjustments Pro Forma --------- -------- ----------- --------- Liabilities & Stockholders' Equity Current liabilities: Notes Payable $ 351 $ 827 $ - $ 1,178 Trade Accounts Payable 1,801 78 - 1,879 Due to Shareholder 1,171 484 (A) 484 1,171 Unearned Income 392 - - 392 Accrued Expenses 1,362 - - 1,362 Income Taxes Payable 1,208 87 - 1,295 Deferred Income Taxes - 336 - 336 Other 200 - - 200 --------- -------- ---------- --------- Total Current Liabilities 6,485 1,812 484 7,813 Notes Payable 250 589 (A)(4,000) 4,839 Deferred Taxes 1,254 155 (A)(703) 2,112 --------- -------- ---------- --------- Total Long-Term Liabilities 1,504 744 (4,703) 6,951 --------- -------- ---------- --------- Total Liabilities 7,989 2,556 (4,219) 14,764 Stockholders' Equity: Common Stock 19 129 (A) 129 19 Additional Paid in Capital 19,551 (A)(1,837) 21,388 Retained Earnings 778 1,150 (A) 1,150 778 --------- -------- ---------- --------- Total Stockholders' Equity 20,348 1,279 (558) 22,185 --------- -------- ---------- --------- Total Liabilities and Stockholders' Equity $ 28,337 $ 3,835 $ (4,777) $ 36,949 ========= ======= ========== =========
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES Unaudited Pro Forma Condensed Statement of Earnings For the year ended December 31, 1996 (in thousands, except per share data)
Historical Historical Historical Superior Historical Superior Baytron Dimensional Adjustments Pre Acquisition Nautilus ---------- ---------- ----------- ----------- --------------- ---------- Revenues $ 23,638 $ 1,277 $ 4,053 $ - $ 28,968 $ 4,424 ---------- ---------- ---------- --------- ---------- ---------- Costs and expenses: Cost of Services 11,040 367 2,982 - 14,389 1,401 Depreciation and amortization 1,323 40 26 (E)18 1,577 556 (F)39 (G)37 (H)94 General and administrative 5,737 773 584 - 7,094 1,560 ---------- ---------- ---------- --------- ---------- ---------- Total costs and expenses 18,100 1,180 3,592 188 23,060 3,517 ---------- ---------- ---------- --------- ---------- ---------- Income from operations 5,538 97 461 (188) 5,908 907 Other income (expense): Interest expense (127) (8) (45) - (180) (125) Other 206 (16) - - 190 - ---------- ---------- ---------- --------- ---------- ---------- Income before income taxes 5,617 73 416 (188) 5,918 782 Provision for income taxes 1,685 - - (I)(20) 1,665 301 ---------- ---------- ---------- --------- ---------- ---------- Net income $ 3,932 $ 73 $ 416 $ (168) $ 4,253 $ 481 ========== ========== ========== ========= ========== ========== Net income per common share and common share equivalent $ 0.22 $ 0.23 ========== ========== Weighted average shares outstanding 17,616,468 18,644,362 ========== ==========
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES Unaudited Pro Forma Condensed Statement of Earnings For the year ended December 31, 1996 (in thousands, except per share data) (Table continued) Adjustments Pro Forma ----------- --------- Revenues $ - $ 33,392 ---------- ---------- Costs and expenses: Cost of Services $ - $ 15,790 Depreciation and amortization (C)131 2,154 (B)(110) General and administrative - 8,654 ---------- ---------- Total costs and expenses 21 26,598 ---------- ---------- Income from operations (21) 6,794 Other income (expense): Interest expense - (305) Other - 190 ---------- ---------- Income before income taxes (21) 6,679 Provision for income taxes (D)(39) 1,927 ---------- ---------- Net income $ 18 $ 4,752 ========== ========== Net income per common share and common share equivalent $ 0.25 ========== Weighted average shares outstanding 19,064,362 ========== NOTES TO UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION A. To reflect the purchase price adjustments related to the acquisition of Nautilus Pipe & Tool Rental, Inc. The purchase price is the sum of $4,000,000 cash, a promissory note of $2,150,000 and 420,000 shares of common stock at the current approximate $4 3/8 market price at the date of purchase. Amounts to be paid under the promissory note is subject to certain minimum earnings requirements and is not reflected in the purchase price which approximates $5,838,000. The property and equipment were valued at their approximate fair value of approximately $4,454,000. Deferred taxes have been provided for the difference between the book and tax basis of the property, plant and equipment acquired. The excess purchase price over the fair value of net assets of Nautilus at February 28, 1997 of approximately $2,770,000 was allocated to goodwill amortized over 20 years. B. To reflect the adjustment to depreciation associated with the application of purchase accounting to Nautilus. C. To reflect the amortization of goodwill associated with Nautilus. D. To adjust the provision for income tax for Nautilus. E. To reflect the additional depreciation associated with the application of purchase accounting to Baytron fixed assets. F. To reflect the additional depreciation associated with the application of purchase accounting to Dimensional's fixed assets. G. To reflect the amortization of goodwill associated with Baytron. H. To reflect the amortization of goodwill associated with Dimensional. I. To adjust the provision for income tax associated with Baytron and Dimensional. EX-23 2 EXHIBIT 23.1 The Board of Directors and Shareholders Nautilus Pipe & Rental Tool, Inc.: We consent to the use of our report included herein dated April 17, 1997, with respect to the balance sheet of Nautilus Pipe & Rental Tool, Inc. as of December 31, 1996, and the related statments of operations and related earnings and cash flows for the year then ended. KPMG PEAT MARWICK LLP New Orleans, Louisiana May 12, 1997 -----END PRIVACY-ENHANCED MESSAGE-----