SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 2
TO
SCHEDULE 14D-9
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SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO
SECTION 14(D)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
3-D GEOPHYSICAL, INC.
(Name of Subject Company)
3-D GEOPHYSICAL, INC.
(Name of Person(s) Filing Statement)
Common Stock, par value $.01 per share
(Title of Class of Securities)
88553V107
(CUSIP Number of Class of Securities)
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JOEL FRIEDMAN
CHAIRMAN
3-D GEOPHYSICAL, INC.
599 Lexington Avenue
New York, New York 10022
(212) 317-1234
(Name, Address and Telephone Number of Person
Authorized to Receive Notice and Communications on Behalf of
the person(s) filing statement)
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This Amendment No. 2 amends and supplements the information set forth
in the Solicitation/Recommendation Statement Pursuant to Section 14(d)(4) of the
Securities Exchange Act of 1934 on Schedule 14D-9, as amended (the "Schedule
14D-9") filed by 3-D Geophysical, Inc. (the "Company") on March 13, 1998 with
respect to a tender offer by WAI Acquisition Corp., a Delaware corporation
("Purchaser"), a wholly-owned subsidiary of Western Atlas Inc., a Delaware
corporation ("Western"), disclosed in a Tender Offer Statement on Schedule
14D-1, dated March 13, 1998, to purchase all outstanding Shares at a purchase
price of $9.65 per share, net to the seller in cash, without interest, upon the
terms and subject to the conditions set forth in an Offer to Purchase dated
March 13, 1998 and pursuant to the Agreement and Plan of Merger dated as of
March 8, 1998, among Western, Purchaser and the Company. Unless otherwise
indicated, the capitalized terms used herein shall have the meanings specified
in the Schedule 14D-9.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
The Company issued a press release on March 25, 1998 with respect to
its earnings for the quarter and year ended December 31, 1997. A copy of such
press release is attached hereto as Exhibit (c)(14) and is incorporated herein
by reference.
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ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
Item 9 is hereby amended and supplemented by adding thereto the
following:
EXHIBIT NO. DESCRIPTION
- ----------- -----------
(c)(14) Press Release issued by the Company on March 25, 1998 with
respect to fourth quarter earnings.
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<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: March 25, 1998
3-D GEOPHYSICAL, INC.
By: /s/ Joel Friedman
-----------------
Name: Joel Friedman
Title: Chairman
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<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
(c)(14) Press Release issued by the Company on March 25, 1998 with
respect to fourth quarter earnings.
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<PAGE>
Exhibit (c)(14)
3-D Geophysical Inc. Announces Results for Three
Months and Twelve Months Ended December 31, 1997
LITTLETON, Colo.--March 25, 1998--3-D Geophysical, Inc. (NASDAQ:TDGO) today
announced results of operations for the three and twelve months ended December
31, 1997.
The Company's net revenues increased to $31.4 million for the three months ended
December 31, 1997 from $15.6 million for the three months ended December 31,
1996. Net income increased to $247,000 for the three months ended December 31,
1997 from a net loss of $1.2 million for the three months ended December 31,
1996. Earnings per share was $.02 for the three months ended December 31, 1997
compared to ($.15) for the three months ended December 31, 1996.
For the year ended December 31, 1997, the Company's net sales increased to
$101.0 million from $51.8 million in the prior year. Net income after
extraordinary items decreased to $.1 million or $.01 per basic share from $.9
million or $.12 per basic share for 1996.
Revenues increased by $15.8 million in the fourth quarter of 1997 compared to
the fourth quarter of 1996 primarily due to the inclusion of $3.4 million in
revenues for the Company's operations in Canada which were acquired in January
1997, an $8.9 million increase in revenues in Mexico where the Company worked on
three projects during the 1997 quarter and $1.5 million in the U.S. due to
increased activity in Texas and Alaska.
Gross profit as a percent of net revenues (gross profit equals net revenues
minus cost of data acquisition) was 22.4% in the fourth quarter of 1997 compared
to 13.7% in the fourth quarter of 1996. Excluding the impact of a $740,000
charge in the fourth quarter of 1996 which resulted from the cancellation of a
large contract in Peru, gross profit was 18.4% in the fourth quarter of 1996.
This increase was primarily due to improved performance in Mexico.
For the year ended December 31, 1997, the Company's net revenues increased by
$49.2 million to $101.0 million. The increase was primarily due to the inclusion
of $11.9 million in revenues for the Company's operations in Canada, an increase
of $12.5 million in Latin America due to additional contracts and an increase of
$24.8 million in the U.S. from growth in seismic activity.
Gross profit as a percent of net revenues was 20.8% for the year ended December
31, 1997 compared to 22.6% for the year ended December 31, 1996. Excluding the
impact of the Peruvian contract cancellation in 1996, gross profit was 24.1% for
the year ended December 31, 1996. The decrease was primarily due to lower
margins than anticipated in Alaska and in the Rocky Mountain region.
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At March 16, 1998, the Company's backlog was approximately $80.3 million,
including approximately $56.3 million that is expected to be completed in 1998;
however, these commitments are subject to cancellation at the option of the
Company's customers, on short notice and generally without penalty. Of this
backlog expected to be completed during 1998, $32.2 million relate to services
to be performed in the U.S., $22.3 million to Latin America and $1.8 million to
Canada.
Headquartered in Littleton, Colorado, 3-D Geophysical is a leading provider of
land-based seismic data acquisition services in the United States, Canada and
Latin America.
On March 8, 1998, the Company entered into a definitive Agreement and Plan of
Merger with Western Atlas Inc. and WAI Acquisition Corp., a wholly-owned
subsidiary of Western, pursuant to which the Company will be come a wholly-owned
subsidiary of Western. Pursuant to the agreement, which was unanimously approved
by the Company's Board of Directors, Western Atlas, through WAI Acquisition, has
commenced a tender offer for all outstanding shares of 3-D common stock at a
purchase price of $9.65 per share in cash. The tender offer is subject to the
satisfaction of a number of customary conditions including among others,
expiration of the applicable waiting periods under the Hart-Scott Rodino
Antitrust Improvements Act.
This press release includes forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934. These forward-looking
statements reflect numerous assumptions, involve a number of risks and
uncertainties, and actual results may vary materially. Among the factors that
could cause actual results to differ materially are: a failure to consummate the
tender offer and merger transaction with Western Atlas Inc; unanticipated
adverse weather conditions; the level of activity in the oil and gas industry;
inflationary trends; interest and exchange rates, and the other risks detailed
from time to time in the Company's filings with the Securities and Exchange
Commission.
<PAGE>
3-D Geophysical, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
in thousands (except share amounts)
For the Three For the Twelve
Months ended Months ended
December 31 December 31
1997 1996 1997 1996
---- ---- ---- ----
Net revenues 31,447 15,603 101,016 51,754
Expenses
Cost of data
acquisition 24,406 13,469 80,029 40,032
Depreciation and
amortization 2,586 1,318 9,868 4,106
General and
administrative
expenses 2,645 2,095 9,470 6,002
Total operating
expenses 29,637 16,882 99,367 50,140
Operating income 1,810 (1,279) 1,649 1,614
Other income
(expenses):
Interest income 111 92 611 461
Interest expense (775) (353) (1,836) (1,021)
Foreign currency
losses (289) (98) (68) (91)
Miscellaneous (118) 268 344 336
Total other income
(expense) (1,071) (91) (949) (315)
Income before provision
for income taxes
and extraordinary
items 739 (1,370) 700 1,299
Provision (benefit)
for income taxes 353 (175) 420 470
Income (loss) before
extraordinary items 386 (1,195) 280 829
Extraordinary item,
net of tax benefit
of $85 and tax
expense of $36 (139) - (139) 57
Net income (loss) 247 (1,195) 141 886
Income (loss) per
share before
extraordinary item
Basic 0.03 (0.15) 0.02 0.12
Dilutive 0.03 (0.15) 0.02 0.11
Extraordinary item
per share, net of tax
benefit of 0.01 and
tax expense of 0.00
Basic (0.01) - (0.01) 0.01
Dilutive (0.01) - (0.01) 0.01
Net earnings (loss)
per share
Basic 0.02 (0.15) 0.01 0.12
Dilutive 0.02 (0.15) 0.01 0.12
Weighted average
common shares
outstanding
Basic 11,917 7,904 11,917 7,097
Dilutive 11,978 8,031 11,978 7,224
CONTACT: 3-D Geophysical, Inc.
Ronald L. Koons, CFO
(303) 645-0549
