-----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, VVNH2flCJ8tptCDK3V1rm9zvFsDW74LTevJyXsfzbtafF/7noCrnF5jN3CvDalsT rGeqkO/yDDswUynMPOS+GQ== 0000950129-97-004617.txt : 20000202 0000950129-97-004617.hdr.sgml : 20000202 ACCESSION NUMBER: 0000950129-97-004617 CONFORMED SUBMISSION TYPE: 424B4 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19971112 DATE AS OF CHANGE: 20000114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EVI INC CENTRAL INDEX KEY: 0000032908 STANDARD INDUSTRIAL CLASSIFICATION: 3533 IRS NUMBER: 042515019 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B4 SEC ACT: SEC FILE NUMBER: 333-39587 FILM NUMBER: 97713255 BUSINESS ADDRESS: STREET 1: 5 POST OAK PARK STREET 2: STE 1760 CITY: HOUSTON STATE: TX ZIP: 77027-3415 BUSINESS PHONE: 7132978428 MAIL ADDRESS: STREET 1: 5 POST OAK PARK STREET 2: STE 1760 CITY: HOUSTON STATE: TX ZIP: 77027-3415 FORMER COMPANY: FORMER CONFORMED NAME: EVI WEATHERFORD INC DATE OF NAME CHANGE: 19980528 FORMER COMPANY: FORMER CONFORMED NAME: EVI INC DATE OF NAME CHANGE: 19980226 FORMER COMPANY: FORMER CONFORMED NAME: ENERGY VENTURES INC /DE/ DATE OF NAME CHANGE: 19920703 424B4 1 424(B)(4) FILING FOR EVI, INC. 1 Filed Pursuant to Rule 424(b)(4) Registration No. 333-39587 PROSPECTUS 944,907 SHARES EVI, INC. COMMON STOCK --------------------- This Prospectus has been prepared for use in connection with the proposed sale by certain stockholders (the "Selling Stockholders") of EVI, Inc., a Delaware corporation (the "Company"), of an aggregate of 944,907 shares (the "Shares") of common stock, $1.00 par value (the "Common Stock"), of the Company. The Shares may be offered and sold by the Selling Stockholders from time to time under this Prospectus from the date hereof until August 25, 1998, directly or through broker-dealers designated from time to time. The Shares may be sold in one or more transactions at a fixed price or prices, which may be changed, at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at prices determined on a negotiated or competitive bid basis. Shares may be sold through a broker-dealer acting as agent or broker for a Selling Stockholder, or to a broker-dealer acting as principal. See "Plan of Distribution". The Common Stock is traded on the New York Stock Exchange (the "NYSE") under the symbol "EVI". On November 10, 1997, the last reported sales price for the Common Stock as reported on the NYSE was $67 1/2 per share. The Company will receive no portion of the proceeds of the sale of the Shares offered hereby and will bear certain of the expenses incident to their registration. The Company has agreed to indemnify the Selling Stockholders against certain civil liabilities, including liabilities under the Securities Act of 1933, or to contribute to payments the Selling Stockholders may be required to make in respect thereof. See "Plan of Distribution" and "Selling Stockholders". The Shares have not been registered for sale under the securities laws of any state or jurisdiction as of the date of this Prospectus. Brokers or dealers effecting transactions in the Shares should confirm the existence of any exemption from registration or the registration thereof under the securities laws of the states in which such transactions occur. --------------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. --------------------- The date of this Prospectus is November 10, 1997. 2 TABLE OF CONTENTS AVAILABLE INFORMATION....................................... 2 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............. 3 FORWARD-LOOKING STATEMENTS.................................. 4 RISK FACTORS................................................ 5 THE COMPANY................................................. 7 SUMMARY HISTORICAL AND PRO FORMA FINANCIAL DATA............. 9 SELLING STOCKHOLDERS........................................ 10 PLAN OF DISTRIBUTION........................................ 11 LEGAL MATTERS............................................... 11 EXPERTS..................................................... 11
--------------------- NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THE PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE SELLING STOCKHOLDERS OR ANY UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY ANY OF THE SHARES BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING THE OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. UNDER NO CIRCUMSTANCES SHALL THE DELIVERY OF THIS PROSPECTUS OR ANY SALE MADE PURSUANT TO THIS PROSPECTUS CREATE ANY IMPLICATION THAT INFORMATION CONTAINED IN THIS PROSPECTUS IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF THIS PROSPECTUS. --------------------- AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance therewith, files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information filed by the Company with the Commission can be inspected at the Public Reference Section of the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and the Regional Offices of the Commission at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511, and 7 World Trade Center, New York, New York 10048. Copies of such material can also be obtained from the Public Reference Section of the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission maintains a World Wide Web site on the Internet at http://www.sec.gov that contains reports, proxy and information statements and other information regarding registrants that file electronically with the Commission. Such reports, proxy and information statements and other information concerning the Company can also be inspected and copied at the offices of the NYSE, 20 Broad Street, New York, New York 10005, on which the Common Stock is listed. The Company has filed with the Commission a Registration Statement on Form S-3 under the Securities Act of 1933, as amended (the "Securities Act"), with respect to the Common Stock offered hereby. This Prospectus, which constitutes a part of the Registration Statement, does not contain all of the information set forth in the Registration Statement, certain items of which are contained in exhibits to the Registration Statement as permitted by the rules and regulations of the Commission. For further information with respect to the Company and the Common Stock offered hereby, reference is made to the Registration Statement, including the exhibits thereto, which may be inspected without charge at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and at the Regional Offices of the Commission, and copies of which may be obtained from the Commission at prescribed rates. Statements made in this Prospectus concerning the contents of any document referred to herein are not necessarily complete. With respect to each such document filed with the Commission as an exhibit to the Registration Statement, reference is made to the exhibit for a more complete description of the matter involved, and each such statement shall be deemed qualified in its entirety by such reference. 2 3 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents have been filed with the Commission and are incorporated herein by reference: (a) The Company's Annual Report on Form 10-K for the year ended December 31, 1996, as amended by Amendment No. 1 to the Annual Report on Form 10-K on Form 10-K/A; (b) The Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1997; (c) The Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1997; (d) The Company's Current Report on Form 8-K dated December 10, 1996, as amended by Amendment No. 1 to the Current Report on Form 8-K on Form 8-K/A dated January 23, 1997; (e) The Company's Current Report on Form 8-K dated March 17, 1997; (f) The Company's Current Report on Form 8-K dated April 25, 1997; (g) The Company's Current Report on Form 8-K dated May 1, 1997; (h) The Company's Current Report on Form 8-K dated August 25, 1997; (i) The Company's Current Report on Form 8-K dated October 20, 1997, as amended by Amendment No. 1 to the Current Report on Form 8-K on Form 8-K/A dated October 21, 1997; (j) The Company's Current Report on Form 8-K dated October 24, 1997; (k) The Company's Current Report on Form 8-K dated November 5, 1997; and (l) The description of the Common Stock contained in the Company's Registration Statement on Form 8-A (filed May 19, 1994) and as amended by the Company's Registration Statement on Form S-3 (Registration No. 333-12367), including any amendment or report filed for the purpose of updating such description. All documents filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to the termination of the offering of the Common Stock pursuant hereto shall be deemed to be incorporated by reference in this Prospectus and to be a part hereof from the date of the filing of such documents. Any statement contained in this Prospectus or in a document incorporated or deemed to be incorporated by reference in this Prospectus shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained in this Prospectus or in any other subsequently filed document that also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The Company undertakes to provide without charge to each person to whom a copy of this Prospectus has been delivered, upon the written or oral request of any such person, a copy of any or all of the documents incorporated by reference herein, other than the exhibits to such documents, unless such exhibits are specifically incorporated by reference into the information that this Prospectus incorporates. Written or oral requests for such copies should be directed to the Company at 5 Post Oak Park, Suite 1760, Houston, Texas 77027, Attention: Secretary (Telephone number: (713) 297-8400). 3 4 FORWARD-LOOKING STATEMENTS Certain statements made herein and in public filings and releases by the Company contain "forward-looking" information (as defined in the Private Securities Litigation Reform Act of 1995) that involve risk and uncertainty. These forward-looking statements may include, but are not limited to, future sales, earnings, margins, production levels and costs, expected savings from acquisitions, demand for products, product deliveries, market trends in the oil and gas industry and the oilfield service sector thereof, research and development, environmental and other expenditures, currency fluctuations and various business trends. Forward-looking statements may be made by management orally or in writing including, but not limited to, this Management's Discussion and Analysis of Financial Condition and Results of Operations section and other sections of the Company's filings with the Securities and Exchange Commission under the Securities Exchange Act of 1934 and the Securities Act of 1933. Actual results and trends in the future may differ materially depending on a variety of factors including, but not limited to, changes in the price of oil and gas, changes in the domestic and international rig count, global trade policies, domestic and international drilling activities, world-wide political stability and economic growth, including currency fluctuations, government export and import policies, technological advances involving the Company's products, the Company's successful execution of internal operating plans and manufacturing consolidations and restructurings, changes in the market for the Company's drilling tools and other products, performance issues with key suppliers and subcontractors, the ability of the Company to maintain price increases and market shares, raw material costs changes, collective bargaining labor disputes, regulatory uncertainties and legal proceedings. Future results will also be dependent upon the ability of the Company to continue to identify and complete successful acquisitions at acceptable prices, integrate those acquisitions with the Company's other operations and penetrate existing and new markets. Many of these factors are described in greater detail in the Company's Form 10-K, as amended, for the year ended December 31, 1996, Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997 and June 30, 1997, and Current Reports on Form 8-K dated December 10, 1996, as amended on January 23, 1997, March 17, 1997, April 25, 1997, May 1, 1997, August 25, 1997, October 20, 1997, as amended on October 21, 1997, October 24, 1997, and November 5, 1997. 4 5 RISK FACTORS This Prospectus contains certain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Actual results could differ materially from those projected or contemplated in the forward-looking statements as a result of certain of the risk factors set forth below and incorporated by reference in this Prospectus. In addition to the other information contained and incorporated by reference in this Prospectus, the following risk factors should be considered carefully in evaluating the Company and its business before purchasing the Shares. DEPENDENCE ON VOLATILE OIL AND GAS INDUSTRY The demand for and pricing of the Company's products and services are substantially dependent upon domestic and worldwide levels of exploration and production, including the number of oil and gas wells being drilled, the depth and drilling conditions of the wells, the number of well completions and the level of workover activity. Exploration and development activity is largely dependent on prevailing oil and natural gas prices. Prices for oil and natural gas have historically been extremely volatile and have reacted to actual and perceived changes in demand and supply of oil and natural gas, domestic and worldwide economic conditions and political instabilities in oil producing countries. The demand for the Company's drilling products are particularly affected by the price of natural gas and the level of oil and gas exploration activity, while the demand for the Company's artificial lift equipment is directly dependent on oil production activity. Sales of the Company's artificial lift products are currently primarily concentrated in North America and are affected by the level of oil production from older wells in addition to oil prices. Exploration and production activity is also affected by worldwide economic conditions, supply and demand for oil and natural gas, seasonal trends and the political stability of oil producing countries. The Company's results have benefitted in recent periods from improved market conditions for the Company's products, including a substantial increase in the demand for the Company's drilling tools, in particular, drill pipe. This increase in demand has been associated with an increase in domestic and international drilling activity, a general reduction in the worldwide supply of used drill pipe and a trend toward the drilling of deeper wells in harsher environments. There can be no assurance that the current market conditions will continue. Any material decline in the current level of drilling activity or demand could have a material adverse impact on the Company's future results. Prices for oil and natural gas are expected to continue to be volatile and to affect the demand for and pricing of the Company's products and services. A material decline in natural gas or crude oil prices could materially adversely affect the demand for, and sales of, the Company's products and services. Industry conditions will continue to be influenced by numerous factors over which the Company has no control. RISKS OF FOREIGN OPERATIONS During 1996, 1995 and 1994, approximately 51%, 46% and 46%, respectively, of the Company's total revenues were earned outside the United States based upon the ultimate destination in which products or services were sold, shipped or provided to the customer by the Company. Operations and sales in foreign markets are subject to substantial competition from large multi-national corporations and government-owned entities and to a variety of local laws and regulations requiring qualifications, use of local labor, the provision of financial assurances or other restrictions and conditions on operations. Foreign operations are also subject to risks associated with doing business outside the United States, including risk of war, civil disturbances and governmental activities that may limit or disrupt markets, restrict the movement of funds or result in the deprivation of contract rights or the taking of property without fair compensation. Foreign operations may also subject the Company to risks relating to fluctuations in currency exchange rates. However, to date, currency fluctuations have not had a material adverse impact on the Company. In addition to the Company's manufacturing operations in the United States and Canada, the Company has manufacturing operations in various locations throughout the world, including Mexico, Brazil, China, India, Singapore and Argentina. Operations in many of these countries are subject to various political and 5 6 economic conditions existing in them which could disrupt operations. The Company generally seeks to obtain, where economical, insurance against certain political risks and attempts to structure its contracts and arrangements in the foreign countries in which it operates in a manner that would minimize the exposure of its assets to losses in those countries. Such efforts include structuring substantially all of its sales and service contracts to be in United States dollars and utilizing lease arrangements and joint ventures for manufacturing facilities, such as its arrangement with Oil Country Tubular Limited in India and a joint venture arrangement for sales in the Far East, so as not to require substantial investment of funds in fixed assets in foreign countries. Although the Company believes that its exposure to foreign risks is not materially greater than that of its competitors, there can be no assurance that disruptions will not occur in the Company's foreign operations or that any losses that do occur will be covered by insurance. OPERATING RISKS AND INSURANCE The Company's products are used for the exploration and production of oil and natural gas. Such operations are subject to hazards inherent in the oil and gas industry, such as fires, explosions, craterings, blowouts and oil spills, that can cause personal injury or loss of life, damage to or destruction of property, equipment, the environment and marine life, and suspension of operations. Litigation arising from an occurrence at a location where the Company's products or services are used or provided may in the future result in the Company being named as a defendant in lawsuits asserting potentially large claims. The Company maintains insurance coverage that it believes to be customary in the industry against these hazards and, whenever possible, obtains agreements from customers providing for indemnification against liability to others. However, insurance and indemnification agreements may not provide complete protection against casualty losses. There can be no assurance that the Company will be able to maintain adequate insurance in the future at rates it considers reasonable. Further, there can be no assurance that insurance will continue to be available on terms as favorable as those for its existing arrangements. The occurrence of an adverse claim in excess of the coverage limits maintained by the Company could have a material adverse effect on the Company's financial condition and results of operations. RISKS OF ENVIRONMENTAL COSTS AND LIABILITIES The Company's operations are subject to governmental laws and regulations relating to the protection of the environment and to public health and safety. The regulations applicable to the Company's operations include certain regulations controlling the discharge of materials into the environment, requiring removal or remediation of pollutants and imposing civil and criminal penalties for violations. Some of the statutory and regulatory programs that apply to the Company's operations also authorize private suits, the recovery of natural resource damages by the government, injunctive relief and cease and desist orders. Laws and regulations protecting the environment have generally become more stringent in recent years and could become more stringent in the future. Some environmental statutes impose strict liability, rendering a person or entity liable for environmental damage without regard to negligence or fault on the part of such person or entity. As a result, the Company could be liable, under certain circumstances, for environmental damage caused by others or for acts of the Company that were in compliance with all applicable laws at the time such acts were performed. SUBSTANTIAL COMPETITION Competition in the oilfield service and equipment segments of the oil and gas industry is intense and, in certain markets, is dominated by a small number of large competitors, many of which have greater financial and other resources than the Company. DIVIDEND POLICY The Company has not paid any dividends on the Common Stock since 1984 and currently anticipates that, for the foreseeable future, any earnings will be retained for the development of the Company's business. Accordingly, no dividends are contemplated to be declared or paid on the Common Stock. 6 7 THE COMPANY EVI, Inc. is an international manufacturer and supplier of engineered oilfield tools and equipment. The Company's products are used both for the drilling and production phases of oil and natural gas wells. The Company has achieved significant growth in recent years through a consistent strategy of synergistic acquisitions and internal development. The Company's acquisitions have focused on consolidation and vertical integration, development of complete product lines and technology. The Company's internal growth has focused on technology, product development, manufacturing efficiencies and productivity enhancements. The Company's principal products consist of drill pipe and other drilling tools, premium connectors and associated high grade tubulars, marine connectors, artificial lift systems, packers and completion tools. The Company's growth strategy has resulted in the Company becoming the largest manufacturer of drill pipe, drill collars and heavyweight drill pipe in the world, the largest provider of premium tubular connectors in North America and one of the largest providers of artificial lift equipment in the world. The Company's revenues and income from continuing operations increased to $478.0 million and $24.5 million, respectively, for 1996 from $271.7 million and $2.6 million, respectively, for 1995. The Company's product lines are divided into the drilling products segment consisting of drill pipe, premium tubulars and marine connectors, and the production equipment segment consisting of artificial lift and completion equipment. DRILLING PRODUCTS The Company's drilling products are comprised of drill pipe and other drilling tools, premium connectors and associated high grade tubulars and marine connectors. Drill pipe as well as drill collars, heavy weights and kellys serve as the principal drilling tools used to drill an oil or natural gas well. Drilling tools must be designed and manufactured to provide a reliable connection from the drilling rig to the drill bit thousands of feet below the surface. The demand for the Company's drilling tools is dependent on the level of domestic and international drilling activity. In recent years, demand for these products has substantially increased as a result of a reduction in worldwide inventory of drill pipe and related drilling tools. Demand has also grown due to the increase in directional, deep and horizontal drilling activity. Such methods of drilling increase the wear on drill pipe and related tools. This trend has resulted in increasing the demand for products with greater performance and technological specifications. Premium connectors and associated high grade tubulars consist of the tubing, liner, casing and accessories that are used for the production of oil and natural gas in harsh downhole environments, typically offshore and deep natural gas wells, where pressure, temperature and corrosive elements are extreme. The need for premium products particularly applies to deep water oil and natural gas wells. The term "premium" refers to seamless tubulars with high alloy chemistry, specific molecular structure and highly engineered connections. The engineered connections have the most critical technological criteria. Marine connectors principally consist of downhole conductors for offshore applications. Conductors are used to define the original architecture of an offshore well and support subsea wellhead equipment. The Company believes that its XLS(TM) and XLC(TM) technologies have unique technological capabilities for reliability and cost effectiveness. The market for marine connectors, like the market for the Company's premium tubular product lines, has benefited from the improvement in offshore drilling activity, in particular, deep water drilling. PRODUCTION EQUIPMENT The Company designs, manufactures and services artificial lift and completion tools. The Company's artificial lift product line consists of rod lift, progressing cavity lift and gas lift. This product line utilizes patented and proprietary technology and is fully integrated from the downhole tools to the above ground equipment. To the Company's knowledge, none of its competitors has as broad a product line of rod lift and progressing cavity pumps. 7 8 Demand for the Company's artificial lift products is dependent on worldwide demand for oil and the production requirements of the world's producing oil reservoirs. The Company's artificial lift products are designed to maximize production of oil wells of different depths and production levels. The need for artificial lift products typically increases with the maturation of the producing reservoirs. The need for artificial lift also is substantially greater with heavier grades of crude oil. The Company believes its breadth of artificial lift products and technology provides it with the ability to maximize reservoir production for its customers. The Company's completion products are used in the completion phase and throughout the production life of oil and gas wells. The Company's completion line includes packers, completion systems, flow control equipment, inflatable packers and service tools. The Company's completion product line has been significantly expanded with the Company's recent addition of the Arrow and McAllister lines of completion products. The scope of the Company's product line allows it to cover a large range of complex completion and production needs. The Company was incorporated in 1972 as a Massachusetts corporation and was reincorporated in Delaware in 1980. The Company's corporate office is located at 5 Post Oak Park, Suite 1760, Houston, Texas 77027-3415, and its telephone number is (713) 297-8400. 8 9 SUMMARY HISTORICAL AND PRO FORMA FINANCIAL DATA The following table sets forth certain summary historical and pro forma condensed consolidated financial data of the Company. The pro forma condensed consolidated statements of income give effect to (i) the Company's 1996 acquisition of Tubular Corporation of America ("TCA"), (ii) the Company's 1997 acquisition of GulfMark International, Inc. ("GulfMark") and the assets thereof (the "GulfMark Retained Assets") and (iii) the sale of $402.5 million principal amount of 5% Convertible Subordinated Preferred Equivalent Debentures due 2027 (the "Debentures") issued on November 3, 1997, as if these transactions had occurred on January 1, 1996. The as adjusted balance sheet data gives effect to the sale of Debentures as if such sale had occurred on June 30, 1997. The operating data for the six months ended June 30, 1997 is not necessarily indicative of results that may be expected for the year ending December 31, 1997. The pro forma information set forth below is not necessarily indicative of the results that actually would have been achieved had such transactions been consummated as of January 1, 1996, or that may be achieved in the future. The pro forma and as adjusted financial data also does not give effect to the proposed acquisitions of Trico Industries, Inc., BMW Monarch (Lloydminster) Ltd. or BMW Pump, Inc. or various smaller acquisitions effected by the Company during 1997. This information should be read in conjunction with the Company's Management's Discussion and Analysis of Financial Condition and Results of Operations, the Selected Consolidated Financial Data, the Pro Forma Condensed Consolidated Statements of Income and the Company's, TCA's and the GulfMark Retained Assets' Consolidated Financial Statements and the related notes thereto incorporated herein by reference.
PRO FORMA -------- HISTORICAL PRO FORMA HISTORICAL SIX ------------------------------ ------------ ------------------- MONTHS YEAR ENDED YEAR ENDED SIX MONTHS ENDED ENDED DECEMBER 31, DECEMBER 31, JUNE 30, JUNE 30, ------------------------------ ------------ ------------------- -------- 1994 1995 1996 1996 1996 1997 1997 -------- -------- -------- ------------ -------- -------- -------- (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) OPERATING DATA: Revenues.............................. $185,285 $271,675 $478,020 $513,274 $189,263 $376,108 $376,926 Cost of sales......................... 139,901 205,230 373,509 402,391 144,183 281,318 281,996 Selling, general and administrative expenses............................ 41,746 48,480 58,224 61,495 26,618 42,581 43,269 -------- -------- -------- -------- -------- -------- -------- Operating income...................... 3,638 17,965 46,287 49,388 18,462 52,209 51,661 Interest expense...................... (13,537) (16,287) (16,454) (36,974) (8,120) (8,166) (18,426) Other income, net..................... 412 684 1,713 1,846 108 7,523 7,523 Income tax provision (benefit)........ (3,795) (240) 7,041 418 3,657 18,159 14,668 -------- -------- -------- -------- -------- -------- -------- Income (loss) from continuing operations.......................... $ (5,692) $ 2,602 $ 24,505 $ 13,842 $ 6,793 $ 33,407 $ 26,090 ======== ======== ======== ======== ======== ======== ======== Earnings (loss) per share from continuing operations(a)............ $ (0.23) $ 0.09 $ 0.60 $ 0.34 $ 0.18 $ 0.73 $ 0.57 Weighted average shares outstanding(a)...................... 25,258 29,448 40,706 41,298 37,050 45,711 45,711 OTHER DATA: Capital expenditures.................. $ 7,869 $ 11,132 $ 25,890 $ 25,890 $ 8,054 $ 23,710 $ 23,710
JUNE 30, 1997 ------------------------- HISTORICAL AS ADJUSTED ---------- ----------- (IN THOUSANDS) BALANCE SHEET DATA: Cash and cash equivalents................................... $ 54,973 $ 445,573 Total assets................................................ 896,345 1,298,845 Long-term debt.............................................. 138,468 138,468 5% Convertible Subordinated Preferred Equivalent Debentures................................................ -- 402,500 Stockholders' investment.................................... 485,840 485,840
- - - - - - - - - - - - - - - --------------- (a) All share and per share amounts have been restated for the May 1997 two-for-one stock split. 9 10 SELLING STOCKHOLDERS This Prospectus constitutes a part of the Registration Statement filed by the Company pursuant to registration rights granted to the Selling Stockholders in the Agreement and Plan of Merger dated as of July 16, 1997, as amended (the "Agreement"), by and among XLS Holding, Inc., a Texas corporation ("XLS"), the Company, GPXL, Inc., a Texas corporation and wholly owned subsidiary of the Company ("GPXL"), and the Selling Stockholders. The Agreement was entered in conjunction with the Company's acquisition of XLS through a merger (the "Merger") of GPXL with and into XLS. Pursuant to the terms of the Agreement, the Company will pay all expenses of registering the Shares under the Securities Act, including, without limitation, all registration and filing fees, printing expenses and the fees and disbursements of the counsel and accountants for the Company. The Agreement also provides that the Company will indemnify the Selling Stockholders against certain civil liabilities, including liabilities under the Securities Act, or to contribute to payments the Selling Stockholders may be required to make in respect thereof. The Selling Stockholders will pay all fees and disbursements of their counsel and all brokerage fees, commissions and expenses, if any, applicable to the Shares sold by them. The following table sets forth certain information with respect to the shares of Common Stock beneficially owned by each Selling Stockholder as of November 10, 1997, all of which may be sold pursuant to this Prospectus:
NAME OF NUMBER OF PERCENT OF SELLING STOCKHOLDER SHARES OWNED(1) OUTSTANDING SHARES ------------------- --------------- ------------------ Paul A. Pigue....................................... 23,623 * Marvin E. Odum, Jr.................................. 188,981 * Brian Jennings Odum "S" Corp. Trusts................ 23,623 * John Paul Preston "S" Corp. Trusts.................. 188,980 * W. A. Taylor........................................ 47,246 * Hydril Company...................................... 472,454 *
- - - - - - - - - - - - - - - --------------- * Less than 1% (1) Because the Selling Stockholders may offer all or a portion of the Shares pursuant to this Prospectus, no estimate can be given as to the number of shares of Common Stock that will be held by the Selling Stockholders upon termination of any such sales. Prior to the Merger, all of the Selling Stockholders were stockholders of XLS, and Paul A. Pigue, Marvin E. Odum, Jr., Brian J. Odum, the trustee and beneficiary of the Brian Jennings Odum "S" Corp. Trusts, John P. Preston, the trustee and beneficiary of the "S" Corp. Trusts, and W. A. Taylor were officers of XLS. Additionally, Messrs. Pigue, Marvin Odum and Christopher T. Seaver, President of Hydril Company, were directors of XLS. Following the Merger, all of such persons ceased to be officers and directors of XLS. Messrs. Marvin Odum, Brian Odum, Preston and Taylor are continuing to be employed by the Company at annual base salaries of $164,880, $84,960, $132,000 and $132,000, respectively. None of the Selling Stockholders have, within the past three years, held any position, office or other material relationship with the Company or any of its predecessors or affiliates, except as noted above. 10 11 PLAN OF DISTRIBUTION The Shares may be sold under this Prospectus pursuant to the methods described below from time to time from the date hereof until August 25, 1998, by or for the account of the Selling Stockholders on the NYSE or otherwise in one or more transactions at a fixed price or prices, which may be changed, at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at prices determined on a negotiated or competitive bid basis. The Shares may be sold by any one or more of the following methods: (a) a block trade (which may involve crosses) in which the broker or dealer so engaged will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction; (b) purchases by a broker or dealer as principal; (c) ordinary brokerage transactions and transactions in which the broker solicits purchasers; and (d) privately negotiated transactions. The Selling Stockholders may effect such transactions by selling Shares through broker-dealers, and such broker-dealers may receive compensation in the form of commissions from the Selling Stockholders (which commissions will not exceed those customary in the types of transactions involved). The Selling Stockholders and any broker-dealers that participate in the distribution of the Shares may be deemed to be "underwriters" within the meaning of the Securities Act in connection with such sales, and any profit on the sale of Shares by it and any fees and commissions received by any such broker-dealers may be deemed to be underwriting discounts and commissions. At the time a particular offering of Common Stock is made hereunder, to the extent required by law, a Prospectus Supplement will be distributed which will set forth the amount of Common Stock being offered and the terms of the offering, including the purchase price, the name or names of any dealers or agents, the purchase price paid for Common Stock purchased from the Selling Stockholders and any items constituting compensation from the Selling Stockholders. The Company will receive no portion of the proceeds of the sale of the Shares offered hereby. LEGAL MATTERS In connection with the Common Stock offered hereby, the validity of the shares being offered will be passed upon for the Company by Fulbright & Jaworski L.L.P., Houston, Texas. Uriel E. Dutton, a director of the Company, is a partner of Fulbright & Jaworski L.L.P. Mr. Dutton currently holds options to purchase 70,000 shares of Common Stock, which options were granted to him pursuant to the Company's Amended and Restated Non-Employee Director Stock Option Plan. EXPERTS The Company's consolidated financial statements and the Company's related consolidated financial statement schedules as of December 31, 1996 and 1995 and for each of the three years in the period ended December 31, 1996, incorporated by reference into this Prospectus and the Registration Statement have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their reports with respect thereto, and are incorporated by reference herein in reliance upon the authority of said firm as experts in accounting and auditing in giving said report. The historical balance sheets of TCA, as of December 31, 1995 and 1994, and the consolidated statements of income, retained earnings and cash flows for the fiscal years ended December 31, 1995 and 1994, incorporated by reference into this Prospectus and the Registration Statement have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their reports with respect thereto, and are incorporated by reference herein in reliance upon the authority of said firm as experts in accounting and auditing in giving said report. GulfMark Retained Assets financial statements as of December 31, 1996 and 1995, and for each of the three years in the period ended December 31, 1996, incorporated by reference in this Prospectus and the Registration Statement have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their reports with respect thereto, and are incorporated by reference herein in reliance upon the authority of said firm as experts in accounting and auditing in giving said report. 11 -----END PRIVACY-ENHANCED MESSAGE-----