As filed with the Securities and Exchange Commission on September 8, 1997.
Registration Statement No. 333-34827
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
PRE-EFFECTIVE AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------------
DAWSON PRODUCTION SERVICES, INC.
(Exact name of Registrant)
TEXAS 74-2231546
(State of incorporation) (I.R.S. Employer
Identification No.)
MICHAEL E. LITTLE, PRESIDENT
DAWSON PRODUCTION SERVICES, INC.
112 E. PECAN STREET, SUITE 1000
SAN ANTONIO, TEXAS 78205
(210) 476-0420
(Address and telephone number of Registrant's executive offices and name,
address and telephone number of agent for service)
COPY TO:
J. ROWLAND COOK
JULIE FREY
JENKENS & GILCHRIST
A PROFESSIONAL CORPORATION
600 CONGRESS AVENUE, SUITE 2200
AUSTIN, TEXAS 78701
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.
---------------------------------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
TITLE OF EACH Amount Maximum Maximum Amount of
CLASS OF SECURITIES to be Offering Aggregate Registration
TO BE REGISTERED Registered Price Per Share(1) Offering Price(1) Fee
<S> <C> <C> <C> <C>
Common Stock, $.01
par value 707,631 $ 18.69 $ 13,225,623 $ 4,008
=================== ============ ================= ================= =============
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee and based
upon the average of the high and low prices reported on the Nasdaq National
Market on August 28, 1997, in reliance on Rule 457(c) under the Securities
Act.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
DAWSON PRODUCTION SERVICES, INC.
CROSS REFERENCE SHEET
PURSUANT TO REGULATION S-K ITEM 501(B)
FORM S-3 ITEM NUMBER AND CAPTION LOCATION/CAPTION IN PROSPECTUS
1. Forepart of the Registration Statement
and Outside Front Cover Pages of
Prospectus............................. Outside Front Cover Page of
Prospectus
2. Inside Front and Outside Back Cover
Pages of Prospectus.................... Inside Front and Outside Back
Cover Pages of Prospectus
3. Summary Information, Risk Factors and
Ratio of Earnings to Fixed Charges..... Risk Factors; The Company
4. Use of Proceeds........................ Not Applicable
5. Determination of Offering Price........ Not Applicable
6. Dilution............................... Not Applicable
7. Selling Security Holders............... Selling Shareholders
8. Plan of Distribution................... Plan of Distribution
9. Description of Securities to be
Registered............................. Incorporation of Certain
Documents by Reference
10. Interests of Named Experts and
Consultants............................ Not Applicable
11. Material Changes....................... Not Applicable
12. Incorporation of Certain Material by
Reference.............................. Incorporation of Certain
Documents by Reference
13. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities............................ Not Applicable
1
<PAGE>
******************************************************************************
* *
* INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A *
* REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED *
* WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT *
* BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE *
* REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT *
* CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR *
* SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH *
* OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR *
* QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. *
* *
******************************************************************************
Subject to Completion; Dated September 8, 1997
707,631 Shares
[LOGO]
DAWSON PRODUCTION SERVICES, INC.
Common Stock
This Prospectus relates to an aggregate of 707,631 shares (the "Shares")
of common stock, par value $.01 per share ("Common Stock"), of Dawson Production
Services, Inc. ("Dawson" or the "Company"). The Common Stock is currently traded
over-the-counter on the Nasdaq National Market ("Nasdaq") under the symbol DPSI.
On August 28, 1997, the closing sale price of the Common Stock on Nasdaq was
$19.00 per share.
The Shares may be offered from time to time by persons (collectively, the
"Selling Shareholders") who acquired the Shares in a transaction or chain of
transactions not involving a public offering. The Selling Shareholders have
indicated that the Shares may be sold in the over-the-counter market or
otherwise at prevailing market prices or negotiated prices or by a combination
of the foregoing methods of sale. No underwriter has been engaged to participate
in the offering of the Shares. The Company will receive no portion of the
proceeds of any sales of Shares by the Selling Shareholders. See "Plan of
Distribution."
THESE SECURITIES INVOLVE CERTAIN RISKS.
SEE "RISK FACTORS" BEGINNING ON PAGE 5.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES ADMINISTRATOR, NOR
HAS THE COMMISSION OR ANY SUCH ADMINISTRATOR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
UNDERWRITING DISCOUNTS PROCEEDS TO SELLING
PRICE TO PUBLIC(A) AND COMMISSIONS SHAREHOLDERS(B)(C)
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
PER SHARE.............. $ $ -- $
TOTAL.................. $ $ -- $
========================================================================================
</TABLE>
(A) SECURITIES WILL BE OFFERED AT THE MARKET PRICE OF THE SHARES ON NASDAQ OR
AT OTHER NEGOTIATED PRICES.
(B) SHARES REGISTERED ARE TO BE OFFERED SOLELY FOR THE ACCOUNT OF SELLING
SHAREHOLDERS.
(C) EXPENSES OF THE OFFERING, OTHER THAN UNDERWRITING DISCOUNTS AND
COMMISSIONS, WILL BE PAID BY THE COMPANY. SUCH EXPENSES ARE ESTIMATED AT
$26,508.
THE DATE OF THIS PROSPECTUS IS SEPTEMBER 8, 1997.
2
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement (of which this Prospectus is a part)
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Shares. This Prospectus does not contain all the information set
forth in the Registration Statement, certain portions of which have been omitted
as permitted by the rules and regulations of the Commission. For further
information with respect to the Company and the Shares, reference is made to
such Registration Statement and exhibits.
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
Commission. The Registration Statement, the exhibits forming a part thereof, and
the reports, proxy statements and other information can be inspected and copied
at the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549, and at the following regional
offices of the Commission: 7 World Trade Center, 13th Floor, New York, New York
10048 and Northwest Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. The Commission maintains a web site (http:\\www.sec.gov) that
contains reports, proxy and information statements and other information
regarding registrants, such as the Company, that file electronically with the
Commission. The Company's Common Stock is traded on the Nasdaq National Market.
Reports, proxy statements and other information concerning the Company can also
be inspected at the office of the Nasdaq Stock Market, 1735 K Street, N.W.,
Washington, D.C. 20006-1500.
The statements contained in this Prospectus that are not historical facts,
including but not limited to, statements found in the "The Company" and "Risk
Factors," are forward-looking statements as that term is defined in Section 21E
of the Exchange Act that involve a number of risks and uncertainties. The actual
results of the future events described in the forward-looking statements in this
Prospectus could differ materially from those stated in such forward-looking
statements. Among the factors that could cause actual results to differ
materially are: general economic conditions, competition and government
regulations, as well as the risks and uncertainties discussed in this
Prospectus, including without limitation, the matters discussed in "Risk
Factors" and the uncertainties set forth from time to time in the Company's
other public reports, filings, and public statements.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
(1) the Company's Annual Report on Form 10-K for the fiscal year ended
March 31, 1997;
(2) the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1997;
(3) the description of the Common Stock set forth in the Registration
Statement on Form 8-A, filed with the Commission on February 8,
1996, including any amendment or report filed for the purpose of
updating such description; and
(4) all documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to
the date of this Prospectus and
3
<PAGE>
prior to the termination of this offering of the Shares, from the
date of filing of such documents.
Any statement contained in a previously filed document incorporated by
reference shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any
accompanying Prospectus supplement, or in any other subsequently filed document
which also is or is deemed to be incorporated by reference, 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
this Prospectus is delivered, upon written or oral request of such person, a
copy of any or all documents incorporated herein by reference, other than
exhibits. All requests for copies of such documents should be directed to: P.
Mark Stark, Vice President and Chief Financial Officer, Dawson Production
Services, Inc., 112 E. Pecan Street, Suite 1000, San Antonio, Texas 78205,
telephone: (210) 476-0420.
THE COMPANY
The Company is engaged in the business of providing: (i) workover rig
services, including completion of new wells, maintenance and recompletion of
existing wells (including horizontal recompletions) and plugging and abandonment
of wells at the end of their useful lives; (ii) liquid services, including
vacuum truck services, frac tank rental and salt water injection; and (iii)
production services, including well test analysis, pipe testing, slickline
wireline services and fishing and rental tool services. For the fiscal year
ended March 31, 1997, the Company derived approximately 49%, 36% and 15% of its
revenues from its workover rig services, liquid services and production
services, respectively. The Company's services are utilized by major oil and gas
companies as well as independent producers to optimize performance of oil and
gas wells.
The Company commenced operations in 1951. In 1982, the current management
team joined the Company and initiated a strategy to expand and diversify the
Company's workover rig services. Since 1982, the Company has grown from four
workover rigs in a single yard to 496 workover rigs in 10 yards through a series
of strategic acquisitions of businesses and assets. The majority of this growth
has occurred since 1992. The Company formed Dawson WellTech, L.C. (the "LLC") in
1992 as a majority owned and operated subsidiary of the Company, which in
November 1994 acquired substantially all of the assets of Well Solutions, Inc.
for approximately $18.1 million (the "Well Solutions Acquisition"). In 1995, the
Company acquired the remaining interest in the LLC.
In July 1996, the Company acquired 70 vacuum trucks, 314 frac tanks and 11
salt water injection wells for approximately $12.8 million pursuant to the
purchase of all of the issued and outstanding stock of Taylor Companies, Inc.
(the "Taylor Acquisition"). During 1996, the Company also acquired 18 additional
vacuum trucks, six workover rigs and one production testing unit.
In March 1996, the Company completed an initial public offering (the
"IPO") of 2,616,250 shares of Common Stock at $10.00 per share, with net
proceeds to the Company of approximately $23.5 million. Simultaneously with the
IPO, the Common Stock began trading on the Nasdaq National Market under the
symbol "DPSI."
On January 20, 1997, the Company acquired the liquid services assets of
Mobley Environmental Services, Inc. for approximately $5.0 million in cash and a
$0.5 million five-year subordinated note.
4
<PAGE>
On February 20, 1997, the Company acquired the U.S. land-based well
servicing operations of Pride Petroleum Services, Inc., which included 407
workover rigs, 10 vacuum trucks and ancillary equipment, for approximately
$135.9 million.
The Company's principal executive office is located at 112 E. Pecan
Street, Suite 1000, San Antonio, Texas 78205, and its telephone number is (210)
476-0420.
RISK FACTORS
THE STATEMENTS INCLUDED IN THIS REPORT REGARDING FUTURE FINANCIAL
PERFORMANCE AND RESULTS AND THE OTHER STATEMENTS THAT ARE NOT HISTORICAL FACTS
ARE FORWARD-LOOKING STATEMENTS. THE WORDS "EXPECT," "PROJECT," "ESTIMATE,"
"PREDICT" AND SIMILAR EXPRESSIONS ALSO ARE INTENDED TO IDENTIFY FORWARD-LOOKING
STATEMENTS. SUCH STATEMENTS INVOLVE RISKS, UNCERTAINTIES AND ASSUMPTIONS,
INCLUDING BUT NOT LIMITED TO, INDUSTRY CONDITIONS, PRICES OF CRUDE OIL AND
NATURAL GAS, AND OTHER FACTORS DISCUSSED IN THIS REPORT (INCLUDING THOSE
SPECIFICALLY DISCUSSED BELOW) AND IN THE COMPANY'S OTHER FILINGS WITH THE
SECURITIES AND EXCHANGE COMMISSION. SHOULD ONE OR MORE OF THESE RISKS OR
UNCERTAINTIES MATERIALIZE, OR SHOULD UNDERLYING ASSUMPTIONS PROVE INCORRECT,
ACTUAL OUTCOMES MAY VARY MATERIALLY FROM THOSE INDICATED.
INCURRENCE OF SUBSTANTIAL INDEBTEDNESS
At March 31, 1997, the Company had approximately $144.0 million in total
indebtedness, including $140 million of Senior Notes due February 1, 2007 (the
"Senior Notes"). The Company historically has operated at substantially lower
levels of debt. The Company's level of indebtedness has several important
effects on its future operations, including, without limitation, that (i) a
substantial portion of the Company's cash flow from operations must be dedicated
to the payment of interest and principal on its indebtedness, (ii) the Company's
leveraged position substantially increases its vulnerability to adverse changes
in general economic and industry conditions, as well as to competitive pressure,
and (iii) the Company's ability to obtain additional financing for working
capital, capital expenditures, acquisitions, general corporate and other
purposes may be limited. The Company's ability to meet its debt service
obligations and to reduce its total indebtedness will be dependent upon the
Company's future performance, which will be subject to general economic
conditions, industry cycles and financial, business and other factors affecting
the operations of the Company, many of which are beyond its control. There can
be no assurance that the Company's business will continue to generate cash flow
at or above current levels. If the Company is unable to generate sufficient cash
flow from operations in the future to service its debt, it may be required,
among other things, to seek additional financing in the debt or equity markets,
to refinance or restructure all or a portion of its indebtedness, including the
Senior Notes, or to sell selected assets or reduce or delay planned capital
expenditures. There can be no assurance that any such measures would be
sufficient to enable the Company to service its debt or that any such financing,
refinancing or sale of assets would be available on economically favorable
terms.
DEPENDENCE ON VOLATILE OIL AND GAS INDUSTRY
Demand for the Company's services depends substantially upon the level of
activity in the oil and gas industry, which in turn depends in part on oil and
gas prices, expectations about future prices, the cost of exploring for,
producing and delivering oil and gas, the discovery rate of new oil and gas
reserves in land areas, the level of drilling and workover activity, domestic
and international political, military, regulatory and economic conditions and
the ability of oil and gas companies to raise capital. Prices for oil and gas
historically
5
<PAGE>
have been extremely volatile and have reacted to changes in the supply of and
demand for oil and natural gas, domestic and worldwide economic conditions and
political instability in oil producing countries. No assurance can be given that
current levels of oil and gas activities will be maintained or that demand for
the Company's services will reflect the level of such activities. Prices for oil
and natural gas are expected to continue to be volatile and affect the demand
for and pricing of the Company's services. A material decline in oil or natural
gas prices or activities could materially adversely affect the demand for the
Company's services and the Company's results of operations. Industry conditions
will continue to be influenced by numerous factors over which the Company has no
control.
The volatility of the oil and gas industry and the consequent impact
thereof on exploration activity could adversely impact certain of the Company's
customers. The Company, therefore, could be subject to special credit risks as
to certain of its customers. While the Company endeavors not to take unjustified
credit risks, it is necessary from time to time to extend trade credit to
long-term customers and others where some risks of nonpayment or late payment
could exist.
ACQUISITION RISKS
The Company completed the Pride Acquisition in February 1997 and the
Taylor Acquisition in July 1996. Pursuant to the Pride Acquisition the Company
acquired 407 workover rigs, which is more than four times the number of workover
rigs it previously operated. No assurance can be given that the Company will be
successful in managing and incorporating the businesses and assets acquired in
the Pride Acquisition or the Taylor Acquisition into its existing operations or
that such activities will not require a disproportionate amount of management's
attention. The Company's failure to incorporate the acquired businesses and
assets into its existing operations successfully, or the occurrence of
unexpected costs or liabilities in the acquired businesses, could have a
material adverse effect on the Company.
LIQUIDITY NEEDS; ABILITY TO REPAY NOTES
The Company may from time to time fund a portion of its working capital
needs and capital expenditure requirements from external financing. In addition,
the Company expects that in order to repay the principal amount of the Senior
Notes at maturity or upon acceleration, or to purchase the Senior Notes upon a
Change of Control (as defined in the Indenture relating to the Senior Notes (the
"Indenture")), it will likely be required to seek additional financing or engage
in asset sales or similar transactions. These can be no assurance that
sufficient funds for any of the foregoing purposes would be available to the
Company at the time they are required on favorable terms.
RISKS RELATING TO INJECTION WELLS
The Company's injection operations pose certain environmental liability
risks to the Company. Although the Company monitors the injection process, any
leakage from the subsurface portions of the wells could cause degradation of
fresh groundwater resources, potentially resulting in cancellation of operation
of the well, fines and penalties from governmental agencies, expenditures for
redemption of the affected resource, and liability to third parties for property
damages and personal injuries. In addition, the sale by the Company of residual
crude oil collected as part of the saltwater injection process could impose
liability on the Company in the event the transferee of the oil fails to manage
the material in accordance with applicable environmental health and safety laws.
6
<PAGE>
SUBSTANTIAL COMPETITION
The workover rig and production services industry is highly competitive
and fragmented and includes several large companies and a number of small
companies capable of competing effectively with the Company on a local basis.
OPERATING RISKS AND INSURANCE
The Company's operations are subject to hazards inherent in the oil and
gas industry, such as blowouts, explosions, craterings, fires and oil spills,
that can cause personal injury or death, damage to or destruction of property,
equipment, the environment and marine life and suspension of operations. In
addition, claims for loss of oil and gas production and damage to formations can
occur in the workover business. Litigation arising from a catastrophic
occurrence at a location where the Company's equipment and services are used may
in the future result in the Company being named as a defendant in lawsuits
asserting potentially large claims.
The Company maintains insurance coverage against these hazards that it
believes to be customary in the industry. However, there can be no assurance
that the Company will be able to maintain adequate insurance in the future at
rates it considers reasonable, or that insurance will continue to be available
on terms as favorable as the Company's existing arrangements. The occurrence of
a significant event or adverse claim in excess of the insurance coverage limits
maintained by the Company could have a materially adverse effect on the
Company's financial condition and results of operations.
RISK OF ENVIRONMENTAL COSTS AND LIABILITIES
The Company's operations are subject to governmental laws and regulations
governing the management and disposal of waste materials, otherwise relating to
environmental protection or public health and safety. Many of the Company's
operations take place in or near ecologically sensitive areas, such as the Texas
Gulf Coast and Louisiana inland waters. Numerous local, state and federal
environmental laws impose liability for causing pollution in inland and coastal
waters. State and federal legislation also provide special protection to water
quality and animal and marine life that could be affected by some of the
Company's activities. The Company's operations also take place in states that
stringently regulate environmental matters, such as California. In general, the
regulations applicable to the Company's operations include certain regulations
controlling the discharge of hazardous or toxic 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.
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.
The clear trend in environmental regulation has been to impose more
restrictions and limitations on activities that may impact the environment,
including the generation and disposal of wastes and the use and handling of
chemical substances. These restrictions and limitations have increased operating
costs for both the Company and its customers. Any regulatory changes that impose
additional environmental restrictions or requirements on the Company and its
customers could adversely affect the Company through increased operating costs
and potential decreased demand for the Company's services.
7
<PAGE>
In this regard, the Resource Conservation and Recovery Act ("RCRA"), the
principal federal statute governing the disposal of solid and hazardous wastes,
includes a statutory exemption that allows oil and gas exploration and
production wastes to be classified as non-hazardous waste. A similar exemption
is contained in many of the state counterparts to RCRA, including the state
statutes in Texas, New Mexico, and Louisiana; however, there is no such
exemption in the California statutes. If oil and gas exploration and production
wastes were required to be managed and disposed of as hazardous waste, either as
a result of changes in RCRA or the imposition of more stringent state
regulations, domestic oil and gas producers, including many of the Company's
customers, could be required to incur substantial obligations with respect to
such waste. Because of the potential impact on the Company's customers, any
regulatory changes that impose additional restrictions or requirements on the
disposal of oil and gas wastes could adversely affect demand for the Company's
services.
DEPENDENCE ON KEY PERSONNEL
The Company believes that its success will depend to a significant extent
upon the continued services of certain key individuals, particularly Michael E.
Little, Chairman of the Board, President and Chief Executive Officer, and James
J. Byerlotzer, Vice President of Operations and Chief Operating Officer. The
loss of the services of either of these individuals could have a material
adverse effect on the Company.
DEPENDENCE ON MAJOR CUSTOMERS
During the fiscal year ended March 31, 1997, the Company derived
approximately 20.00% of its revenues from its largest customer. The loss of this
customer could have a material adverse effect on the Company's financial
condition and results of operations.
DIVIDEND POLICY
The Company has never paid cash dividends on the Common Stock and does not
anticipate that cash dividends will be paid in the foreseeable future. The
Company currently intends to retain any future earnings to finance the expansion
and continuing development of the Company's business. The declaration and
payment in the future of any cash dividends will be at the election of the
Company's Board of Directors and will depend upon the earnings, capital
requirements and financial position of the Company, future loan covenants,
general economic conditions and other pertinent factors. Furthermore, certain
provisions of the Credit Facility (as defined in the Indenture) and the
Indenture will restrict the Company's ability to pay cash dividends on the
Common Stock.
SUBSTANTIAL AMOUNT OF SECURITIES SUBJECT TO REGISTRATION RIGHTS
Pursuant to a registration rights agreement (the "Registration Rights
Agreement"), shareholders (the "Rights Holders") that beneficially own
approximately 2.4 million shares of Common Stock (the "Registrable Securities"),
or approximately 22% of the currently issued and outstanding shares of Common
Stock, are entitled to registration of such shares under the Securities Act,
subject to certain exceptions and limitations. The Registration Statement of
which this Prospectus is a part is filed pursuant to the Registration Rights
Agreement (the "Shelf Registration Statement"). The holders of a majority of the
Registrable Securities can require that the Shelf Registration Statement be in
the form of an underwritten offering. Additionally, if the Company proposes to
register any of its securities under the Securities Act for its own account or
for the account of the other security holders, the Rights Holders are entitled
to notice of such registration and are entitled to include all or a portion of
the Registrable Securities in such registration, subject to certain exceptions
and limitations, including the right of the underwriters (if any) of any such
offering to exclude for marketing reasons some or all of the Registrable
Securities from such registration. The Company generally is required
8
<PAGE>
to pay all of the expenses relating to the registration of the Registrable
Securities, except for the Rights Holders' share of any underwriting discounts
and commissions. The Registration Rights Agreement prohibits the Company from
granting any new registration rights under the Securities Act that would
adversely impact the rights of the Rights Holders. Sales of substantial amounts
of the Common Stock in the public market pursuant to this Prospectus could
adversely affect prevailing market prices and the ability of the Company to
raise equity capital in the future.
ANTI-TAKEOVER EFFECT OF CERTAIN PROVISIONS
The Company's Articles of Incorporation and Bylaws include certain
provisions that may have the effect of discouraging potential unsolicited offers
or other efforts to obtain control of the Company that are not approved by the
Board. Upon a change of control of the Company, holders of the Senior Notes will
have the right to require the Company to purchase such Senior Notes at a price
equal to 101% of the aggregate principal amount thereof, together with accrued
and unpaid interest to the date of purchase. Such provisions may adversely
affect the market price of the Common Stock and may also deprive the
shareholders of opportunities to sell shares of Common Stock at prices higher
than prevailing market prices. Such provisions include the requirement that all
shareholder action must be taken at a duly called annual or special meeting of
shareholders unless a majority of the entire Board provides its prior approval
for shareholder action to be taken by written consent of shareholders. The Board
has the authority, without further action by the shareholders, to issue up to
560,600 shares of the Company's preferred stock in one or more series and to fix
the rights, preferences, privileges and restrictions thereof, and to issue over
9,000,000 additional shares of Common Stock. The issuance of the Company's
preferred stock or additional shares of Common Stock could adversely affect the
voting power of the purchasers of Common Stock and could have the effect of
delaying, deferring or preventing a Change in Control of the Company.
SELLING SHAREHOLDERS
The following table sets forth information, as of August 27, 1997,
regarding the Selling Shareholders, their recent relationships with the Company
and its affiliates, their ownership of Common Stock before and after this
offering, and the number of Shares to be offered for the account of each.
<TABLE>
<CAPTION>
Material Relationships Amount of
Selling with Company Amount of Common Number of Shares Common Stock
Shareholder or Affiliates Stock Owned to be Offered Owned at Offering(1)(2)
- ----------- ---------------------- ---------------- ---------------- -----------------
<S> <C> <C> <C>
Dol & Co. f/b/o Belmont
Capital Partners II, L.P. 608,321 608,321 0
George Konomos 1,229 1,229 0
Kevin P. Collins Director of the Company
from September 1994
to April 1996 10,354 6,054 4,300
Jupiter Management
Company, Inc. 14,641 14,641 0
Nathalie B. Thompson
Defined Benefit Pension Plan 4,231 4,231 0
Ingrid Morsman 4,347 4,347 0
Kristin Morsman 1,844 1,844 0
Whitney Morsman 1,844 1,844 0
Douglas B. Thompson 15,910 15,910 0
Ell & Co. f/b/o Newell Co. 31,800 600 31,200
PITT & Co. f/b/o 9,050 850 8,200
Tracor, Inc.
PITT & Co. f/b/o GCIU
Employer Retirement Fund 17,600 500 17,100
Ell & Co. f/b/o NCR Corp. 78,778 27,136 51,642
J. W. Beavers, Jr., Trustee
of the William Herbert Hunt
Trust Estate 20,124 20,124 0
</TABLE>
(1) Assumes that all Shares are sold pursuant to this offering and that no
additional Common Stock is sold or acquired by Selling Shareholders.
(2) In each case, represents less than 1% of issued and outstanding Common
Stock.
9
<PAGE>
PLAN OF DISTRIBUTION
The Company has been advised by the Selling Shareholders that all or a
pportion of the Shares may be sold from time to time (i) on the Nasdaq National
Market at prevailing market prices, (ii) otherwise than on such market at
prevailing market prices or negotiated prices, or (iii) by a combination of the
foregoing methods of sale. The Company will receive no portion of the proceeds
of any sales of Shares by the Selling Shareholders, but will bear all expenses
of registering the Shares under the Securities Act, except as provided below.
Pursuant to the terms of that Registration Rights Agreement dated November
1, 1995 between the Company and the Selling Shareholders (or their predecessors
in interest) (the "Registration Rights Agreement"), the Company has agreed to
file the Registration Statement of which this Prospectus forms a part for the
purpose of registering the potential resale of the Shares and to maintain the
effectiveness of such Registration Statement for three years, as contemplated by
the Registration Rights Agreement. In addition, the Company and the Selling
Shareholders listed therein agreed to indemnify each other and certain
affiliated parties from and against any losses or claims arising out of, among
other things, (1) any untrue statement of a material fact or (2) any material
omission contained or referred to in the Registration Statement. Insofar as
indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers or persons controlling the Company, pursuant to
the foregoing provisions, the Company has been informed that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable.
Except as specifically set forth herein, none of the Selling Shareholders
has, or within the past three years has had, any position, office or other
material relationship with the Company or any of its predecessors or affiliates.
The Company has been advised by the Selling Shareholders that they (or,
subject to applicable law, their pledgees, donees, distributees, transferees or
other successors in interest) intend to sell all or a portion of the Shares
offered by this Prospectus from time to time (i) on the Nasdaq National Market,
(ii) otherwise than on the Nasdaq National Market, in negotiated transactions at
fixed prices which may be changed, at market prices prevailing at the time of
sale or at prices reasonably related thereto or at negotiated prices, or (iii)
by a combination of the foregoing methods of sale (any of which may involve
crosses and block transactions). The Selling Shareholders may effect such
transactions by selling the Shares to or through broker-dealers, and such
broker-dealers may receive compensation in the form of discounts, concessions or
commissions from the Selling Shareholders and/or the purchasers of the Shares
for which such broker-dealers may act as agent or to whom they may sell as
principal, or both. The Company is not aware as of the date of this Prospectus
of any agreements between any of the Selling Shareholders and any broker-dealers
with respect to the sale of the Shares offered by this Prospectus. In connection
with distributions of the Shares or otherwise, the Selling Shareholders may
enter into hedging transactions with broker-dealers. In connection with such
transactions, broker-dealers may engage in short sales of the Shares registered
hereunder in the course of hedging the positions they assume with Selling
Shareholders. The Selling Shareholders may also sell Shares short and deliver
the Shares to close out such short positions. The Selling Shareholders may also
enter into option or other transactions with broker-dealers which require the
delivery to the broker-dealer of the Shares registered hereunder, which the
broker-dealer may resell pursuant to this Prospectus. The Selling Shareholders
may also pledge the Shares registered hereunder to a broker or dealer and upon a
default, the broker or dealer may effect sales of the pledged Shares pursuant to
this Prospectus.
The Selling Shareholders and any broker, dealer or other agent executing
sell orders on behalf of the Selling Shareholders may be deemed to be
"underwriters" within the meaning of the Securities Act, in which
10
<PAGE>
event commissions received by any such broker, dealer or agent and profit on any
resale of the Shares may be deemed to be underwriting commissions under the
Securities Act. Such commissions received by a broker, dealer or agent may be in
excess of customary compensation. The Shares may also be sold in accordance with
Section 4(1) of the Securities Act or Rule 144 and Rule 145 under the Securities
Act.
Information as to whether underwriters who may be selected by the Selling
Shareholders, or any other broker-dealer, is acting as principal or agent for
the Selling Shareholders, the compensation to be received by underwriters who
may be selected by the Selling Shareholders, or any broker-dealer, acting as
principal or agent for the Selling Shareholders and the compensation to be
received by other broker-dealers, will, to the extent required, be set forth in
a supplement to this Prospectus (the "Prospectus Supplement"). Any dealer or
broker participating in any distribution of the Shares may be required to
deliver a copy of this Prospectus, including the Prospectus Supplement, if any,
to any person who purchases any of the Shares from or through such dealer or
broker.
All expenses of registration incurred in connection with the offering will
be borne by the Company. All selling and other expenses incurred by the Selling
Shareholders will be borne by the Selling Shareholders.
The Selling Shareholders will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, including without
limitation, Rule 102 under Regulation M, which provisions may limit the timing
of purchases and sales of any of the Common Stock by the Selling Shareholders.
Rule 102 under Regulation M provides, with certain exceptions, that it is
unlawful for a selling shareholder or its affiliated purchaser to, directly or
indirectly, bid for or purchase or attempt to induce any person to bid for or
purchase, for an account in which the selling shareholder or affiliated
purchaser has a beneficial interest in any securities that are the subject of
the distribution during the applicable restricted period under Regulation M. All
of the foregoing may affect the marketability of the Common Stock. The Company
will require each Selling Shareholder and his or her broker if applicable, to
provide a letter that acknowledges his compliance with Regulation M under the
Exchange Act before authorizing the transfer of such Selling Shareholder's
Shares.
It is anticipated that the Selling Shareholders may offer all of the
Shares for sale. Further, because it is possible that a significant number of
Shares could be sold at the same time hereunder, such sales, or the possibility
thereof, may have a depressive effect on the market price of the Company's
Common Stock.
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon for the
Company by Jenkens & Gilchrist, A Professional Corporation, Austin, Texas.
EXPERTS
The consolidated financial statements of Dawson Production Services, Inc.
and subsidiaries as of March 31, 1997 and 1996, and for each of the years in the
three-year period ended March 31, 1997, have been incorporated by reference from
the Company's Annual Report on Form 10-K for the fiscal year ended March 31,
1997, in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
11
<PAGE>
No dealer, salesman, or other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus and, if given or made, such information or representations must not
be relied upon as having been authorized by the Company or the Selling
Shareholders. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any securities other than the Shares nor does it
constitute an offer or solicitation by anyone in any jurisdiction in which such
offer or solicitation would be unlawful or to any person to whom it is unlawful
to make such offer or solicitation. Neither the delivery of this Prospectus nor
any offer or sale made hereunder at any time shall imply that information herein
is correct as of any time subsequent to the date hereof.
---------------
TABLE OF CONTENTS
Available Information........................................................ 3
Incorporation of Certain Documents
by Reference ............................................................. 3
The Company ................................................................. 4
Risk Factors ................................................................ 5
Selling Shareholders ........................................................ 9
Plan of Distribution ........................................................10
Legal Matters ...............................................................11
Experts .....................................................................11
707,631 Shares
DAWSON PRODUCTION
SERVICES, INC.
Common Stock
----------------
PROSPECTUS
----------------
September 8, 1997
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses in connection with the issuance and distribution of
the securities being registered, all of which will be borne by the Company, are
set forth in the following itemized table:
SEC Registration Fee.................................... $ 4,008
Transfer Agent's Fees................................... $ 2,000
Blue Sky Fees and Expenses.............................. $ 2,500
Accounting Fees......................................... $ 5,000
Legal Fees.............................................. $ 10,000
Miscellaneous........................................... $ 3,000
Total............................................. $ 26,508
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article 2.02-1 of the Texas Business Corporation Act provides that a
corporation may indemnify its officers, directors, employees and agents for
expenses and costs incurred in certain proceedings arising out of actions taken
in their official capacity only if such persons were acting in good faith and in
a manner reasonably believed to be in or not opposed to the best interests of
the corporation, except in relation to matters in which they have been found
liable (i) to the corporation, or (ii) on the basis that personal benefit was
improperly received regardless of whether or not the benefit resulted from
action taken in their official capacity. In the case of any criminal proceeding,
such persons must also have had no reasonable cause to believe such conduct was
unlawful. Article 2.02-1 further provides that a corporation shall indemnify its
officers and directors against reasonable expenses incurred in connection with
proceedings arising out of actions taken in their official capacity in which
such persons have been wholly successful, on the merits or otherwise, in the
defense of such actions. The Bylaws of the Company, as amended, provide for
indemnification of the Company's directors, officers, and employees to the
fullest extent permitted by Article 2.02-1. Additionally, the Company amended
its Articles of Incorporation, with shareholder approval, to confirm that the
Company has the power to indemnify certain persons in such circumstances as are
provided in its Bylaws. The amendment further enables the Company to enter into
additional insurance and indemnity arrangements at the discretion of the board
of directors. The Company has entered into Indemnification Agreements with each
of its officers and directors, the form of which was approved by the
shareholders of the Company, that essentially indemnify such individuals to the
fullest extent permitted by law.
Article 7.06 of the Texas Miscellaneous Corporation Laws Act provides that
a corporation's articles of incorporation may provide for the elimination or
limitation of a director's liability. The Company's Articles of Incorporation to
eliminate the liability of directors to the corporation or its shareholders for
monetary damages for an act or omission in his capacity as a director, with
certain specified exceptions to the Company and its shareholders to the fullest
extent permitted by Article 7.06 of the Texas Miscellaneous Corporation Laws
Act.
The Company maintains insurance, the general effect of which is to provide
coverage for the Company with respect to amounts that it is required to pay
officers and directors under the indemnity
II-1
<PAGE>
provisions described above and coverage for officers and directors against
certain liabilities, including certain liabilities under the federal securities
law.
ITEM 16. EXHIBITS.
4 Specimen share certificates (incorporated by reference to the
Company's Registration Statement No. 333-00452 on Form S-1 filed on
January 18, 1996)
*5 Opinion of Jenkens & Gilchrist, A Professional Corporation,
regarding legality
*24(a) Consent of Jenkens & Gilchrist, A Professional Corporation
(contained in its opinion filed as Exhibit 5)
*24(b) Consent of KPMG Peat Marwick LLP (contained in Part II of this
Registration Statement)
*25 Power of Attorney (included on the signature pages hereof)
- --------
*Previously filed
ITEM 17. UNDERTAKINGS.
A. The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration
Statement to include any material information with respect to
the plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
(2) that, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
B. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of
the registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Exchange Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of
the Exchange Act) that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions
described under Item 15 above, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant
in
II-2
<PAGE>
the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Pre-effective
Amendment No. 1 to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of San Antonio, State of
Texas, on September 8, 1997.
DAWSON PRODUCTION SERVICES, INC.
By: /s/MICHAEL E LITTLE
Michael E. Little,
Chairman of the Board, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act, this Pre-effective
Amendment No. 1 to Registration Statement has been signed below in multiple
counterparts with the effect of one original by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ MICHAEL E. LITTLE Chairman of the Board, President, September 8, 1997
Michael E. Little Chief Executive Officer and Director
(Principal Executive Officer)
/s/ P. MARK STARK Chief Financial Officer (Principal September 8, 1997
P. Mark Stark Financial and Accounting Officer)
*
/s/ -------------------- Director September 8, 1997
Wm. Ward Greenwood
/s/ * Director September 8, 1997
--------------------
J. Michael Bell
/s/ * Director September 8, 1997
--------------------
Douglas D. Lewis
/s/ * Director September 8, 1997
--------------------
Paul E. McCollam
/s/ * Director September 8, 1997
--------------------
Stephen F. Oakes
/s/ * Director September 8, 1997
--------------------
Russell Banks
/s/ * Director September 8, 1997
--------------------
Lawrence C. Petrucci
*By /s/ MICHAEL E. LITTLE
Michael E. Little,
as attorney-in-fact
II-4
