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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the quarterly period ended June 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the transition period from ______________________ to _______________________
Commission file number 33-6967
HALTER MARINE GROUP, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 75-2656828
- --------------------------------- -------------------
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
3085 Industrial Seaway Road, Gulfport, Mississippi 39503
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (601)896-0029
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Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report
Indicate by check mark whether the registrant:(1) has filed all reports
required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements for the
past 90 days.
Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of the latest practicable date. 18,450,000
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PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
HALTER MARINE GROUP, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
(IN MILLIONS)
JUNE 30 MARCH 31
1997 1997
------- --------
Assets
Current Assets:
Cash $ 3.0 7.1
Contract receivables 50.0 36.1
Due from affiliate - 11.5
Costs and estimated earnings
in excess of billings on
uncompleted contracts 90.5 77.7
Inventories 10.2 10.8
Other current assets 4.4 4.5
------ -----
Total current assets 158.1 147.7
Property, plant and equipment, net 86.5 61.4
Excess of cost over net assets
acquired 26.6 -
Other assets 0.3 0.3
------ -----
$271.5 209.4
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Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable and accrued
liabilities $ 32.9 30.6
Billings in excess of costs and
estimated earnings on
uncompleted contracts 28.1 19.9
Notes payable and current
portion of long-term debt 33.0 8.7
Deferred income taxes 3.4 2.9
------ -----
Total current liabilities 97.4 62.1
Long-term debt, less current portion 73.5 52.0
Other noncurrent liabilities 1.9 2.0
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Total liabilities 172.8 116.1
Stockholders' equity:
Common stock 0.2 0.2
Additional paid-in capital 84.2 84.2
Retained earnings 14.3 8.9
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Total stockholders' equity 98.7 93.3
------ -----
$271.5 209.4
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HALTER MARINE GROUP, INC.
CONSOLIDATED INCOME STATEMENT
(UNAUDITED)
(IN MILLIONS, EXCEPT PER SHARE DATA)
THREE MONTHS
ENDED JUNE 30
--------------
1997 1996
------ ------
Contract revenue earned $149.1 86.0
Cost of revenue earned 130.5 74.7
------ ------
Gross profit 18.6 11.3
Selling, general and
administrative expenses 7.9 4.9
Amortization of excess of
cost over net assets 0.3 -
------ ------
Operating income 10.4 6.4
Other expenses:
Interest expense 1.5 0.9
Other, net 0.1 -
------ ------
1.6 0.9
------ ------
Income before income taxes 8.8 5.5
Income taxes 3.4 2.2
------ ------
Net income $ 5.4 3.3
====== ======
Net income per share
(pro forma for 1996) $ 0.29 0.19
====== =====
Weighted average shares
outstanding (pro forma for 1996) 18.6 18.0
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HALTER MARINE GROUP, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(IN MILLIONS)
THREE MONTHS
ENDED JUNE 30
----------------------
1997 1996
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Net cash provided (required) by
operating activities $ 11.3 (10.4)
Cash flows from investing activities:
Purchase of Texas Drydock, Inc., net
of cash acquired (18.7) -
Capital expenditures (11.9) (2.6)
Proceeds from disposals of equipment - 0.6
---------- ----------
Net cash required by
investing activities (30.6) (2.0)
Cash flows from financing activities:
Net borrowing from parent - 12.4
Payments on short-term debt (2.7) -
Additions to long-term debt 17.9 -
---------- ----------
Net cash provided by
financing activities 15.2 12.4
---------- ----------
Net decrease in cash (4.1) -
Cash at beginning of period 7.1 0.7
---------- ----------
Cash at end of period $ 3.0 0.7
========== ==========
HALTER MARINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 1997
NOTE 1--BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three month period ended June 30, 1997
are not necessarily indicative of the results that may be expected for the year
ended March 31, 1998. For further information, refer to the consolidated
financial statements and footnotes thereto included in
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the Halter Marine Group, Inc. and Subsidiaries' annual report on Form 10-K for
the year ended March 31, 1997.
NOTE 2--PURCHASE OF TEXAS DRYDOCK, INC.
On April 4, 1997, the Company acquired a 51% interest in and obtained an
option to acquire the remaining 49% of Texas Drydock, Inc. (TDI), a company
engaged principally in the construction, conversion and repair of offshore oil
drilling rigs. The purchase price was approximately $19.4 million and
coincident with the acquisition, the Company advanced TDI approximately $4.5
million for working capital and a fixed asset acquisition. All amounts were
paid in cash. On May 16, 1997, the Company acquired the remaining 49% of TDI by
the issuance of promissory notes payable to the sellers in the amount of $27
million bearing interest at the rate of seven and one-tenth percent (7.1%) per
annum, both principal and interest due January 15, 1998. A substantial portion
of the total purchase price was allocated to cost in excess of net assets
acquired. The pro forma unaudited results of operations for three months ended
June 30, 1996, assuming consummation of the purchase as of April 1, 1996, are as
follows:
(000's omitted, except per share data)
Net Sales $ 107,116
Net Income $ 3,108
Net Income per share $ 0.17
Pro forma weighted average
number of shares outstanding 18,000
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Financial Condition
Increases in balance sheet accounts at June 30, 1997 as compared to
March 31, 1997 balances were primarily the result of the acquisition of Texas
Drydock, Inc. (TDI). The balance sheet accounts which had the largest increases
include long-term debt ($21.5 million), short-term debt ($24.3 million) and
excess of cost over net assets acquired ($26.6 million).
Results of Operations
Contract revenue earned increased by $63.1 million or 73.4% in fiscal 1998
over fiscal 1997. This increase was primarily the result of increased revenue
from construction and repair of energy related products ($56.4 million), which
category also includes all of TDI's revenue for the quarter.
The gross profit margin decreased slightly from 13.1% in fiscal 1997 to
12.5% in fiscal 1998. This decrease was primarily
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due to lower than normal margins reflecting the Company's efforts to regain
entry into the previously dormant market of offshore support vessels. These
lower margins were partially offset by higher margins in the rig repair
business.
Selling, general and administrative expenses increased by $3.0 million in
fiscal 1998 as compared to fiscal 1997. As a percent of contract revenue
earned, these expenses decreased to 5.3% for the three months ended June 30,
1997 from 5.7% for the same period a year ago. The dollar increase resulted
from inclusion of TDI's selling, general and administrative expenses for the
quarter and from increased activities related to the overall growth of the
Company.
Interest expense increased $0.6 million in fiscal 1998 as compared to
fiscal 1997 principally from the additional borrowings incurred by the Company
in connection with the acquisition of TDI.
The tax rate of 38.6% in fiscal 1998 as compared to 40.0% in fiscal 1997
reflects the fact that the Company generated income from it's Texas operations
during fiscal 1998 which income is not subject to state income taxes.
The Company's construction backlog increased to $569.7 million at June 30,
1997, an increase of $139.7 million from June 30, 1996 and $90.9 million from
March 31, 1997. This increase in backlog generally reflects the growth of the
Company's energy backlog which includes that of TDI at June 30, 1997.
Liquidity and Sources of Capital
The Company's principal need for capital for the three month period ending
June 30, 1997 resulted from the acquisition of Texas Drydock, Inc. This need
was funded by borrowing from the Company's existing credit facility and the
issuance of promissory notes. The Company believes that the cash flow from
operations, the remaining funds available under the existing credit facility and
the various alternative long-term financing options under consideration will be
sufficient to fund its requirements for working capital, capital expenditures,
acquisitions and other capital needs for at least the next twelve months.
ITEM 3. QUALITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not Applicable.
PART II
OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
At the Registrant's Annual Meeting of Stockholders held on July 15, 1997,
Messrs. John Dane, III and Daniel J. Mortimer were elected as directors of the
Registrant to hold office until the Annual Meeting of Stockholders in the year
2000. There were 13,786,353 votes cast for and 1,990,804 votes withheld for the
election of Mr. Dane, and 13,786,769 cast for and 1,990,388 votes withheld for
the election of Mr. Mortimer.
At that meeting, the stockholders also voted to approve the Amended and
Restated 1996 Stock Option and Incentive Plan by a vote of 7,933,253 for
approval of the plan, 2,682,374 against approval of the plan, 66,105 abstentions
and 2,711,672 broker no-votes.
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
10.1 Consent of Banks and First Amendment to Amended and Restated
Revolving Credit Agreement dated April 4, 1997.
10.2 Amended and Restated Consent of Banks and First Amendment to
Amended and Restated Revolving Credit Agreement dated
May 15, 1997.
10.3 Second Amendment to Amended and Restated Revolving Credit
Agreement dated June 30, 1997.
11.1 Statement re computation of per share earnings.
27.1 Financial Data Schedule.
(b) Reports on Form 8-K. The Registrant filed the following reports on
Form 8-K during the quarter ended June 30, 1997:
Date of Report Item Number and Subject Matter
- -------------- ------------------------------
March 31, 1997 Item 5 - reporting that Trinity Industries, Inc. had
distributed to its stockholders 15,000,000 shares of common
stock of Registrant.
April 1, 1997 Item 5 - reporting the appointment of Messrs. Angus H.
Cooper, II, Burt H. Keenan and Daniel J. Mortimer as members
of the Board of Directors of the Registrant to succeed the
four officers of Trinity Industries, Inc. who resigned after
the distribution by Trinity Industries, Inc. to its
stockholders on March 31, 1997 of 15,000,000 shares of the
Registrant.
April 4, 1997 Item 2 - reporting the purchase of fifty-one percent of the
stock of Maritime Holdings, Inc., the primary asset of which
is eighty percent of the stock of Texas Drydock, Inc., and
the simultaneous purchase of fifty-one percent of the other
twenty percent of the issued and outstanding capital stock of
Texas Drydock, Inc.
April 23, 1997 Item 5 - reporting a press release announcing that TDI-
Halter, Inc. and Preforadora Central S.A. de C.V. had signed
a contract for the construction of a Le Tourneau Super 116
mobile
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offshore drilling unit having a contract value expected to
approach $80 million.
May 16, 1997 Item 2 - reporting the purchase of the remaining forty-nine
(49%) of the issued and outstanding stock of Maritime
Holdings, Inc. and the remaining forty-nine percent (49%) of
the other twenty percent (20%) of Texas Drydock (the name of
which had been changed to TDI-Halter, Inc.).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: August 14, 1997 HALTER MARINE GROUP, INC.
By:/s/ Keith L. Voights
-------------------------------
Keith L. Voigts
Senior Vice President-Finance
As a Duly Authorized Officer
and Principal Financial Officer
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EXHIBIT 10.1
CONSENT OF BANKS AND FIRST AMENDMENT TO AMENDED AND
RESTATED REVOLVING CREDIT AGREEMENT
This Consent of Banks and First Amendment to Amended and Restated
Revolving Credit Agreement, is effective the 4th day of April, 1997, and is made
and entered into by and among HALTER MARINE GROUP, INC., a Delaware corporation
("Borrower") and the undersigned Banks, including Whitney National Bank in its
capacity as a Bank and as Agent for the Banks under the Amended and Restated
Revolving Credit Agreement (which is hereinafter described).
WHEREAS, the parties hereto entered into an Amended and Restated
Revolving Credit Agreement, effective December 31, 1996 (the "Revolving Credit
Agreement");
WHEREAS, the parties hereto desire to amend the Revolving Credit
Agreement;
WHEREAS, Borrower has requested the Banks to consent to Borrower
obtaining a Loan for the acquisition of an interest in additional Subsidiaries
and the Banks are willing to consent thereto subject to the provisions hereof;
and
WHEREAS, Borrower intends to approach the Banks in the future about
the incurrence of a Loan or other Indebtedness in order to purchase the balance
of the outstanding capital stock of such Subsidiaries but Borrower recognizes
that further consents of the Required Banks are required in order for Borrower
to incur any such Loan or other Indebtedness and/or to purchase such additional
stock.
NOW THEREFORE, for good and adequate consideration the receipt of
which is hereby acknowledged, the parties hereto do hereby agree as follows:
1. As used herein, capitalized terms not defined herein shall have
the meanings attributed to them in the Revolving Credit Agreement.
2. The Banks do hereby consent to the purchase by Halter Marine, Inc.
("Halter-Nevada"), a Nevada Corporation and wholly owned Subsidiary of Borrower,
and consent to the use of Nineteen Million Three Hundred Seventy-Two Thousand
Five Hundred Dollars ($19,372,500.00) in Loan proceeds (the "$19,372,500.00
Loan") obtained by Borrower for the purchase of (a) Fifty-One Thousand (51,000)
shares of capital stock of Maritime Holdings, Inc.("MHI"), a Delaware
Corporation, for the price and sum of Fifteen Million Four Hundred Ninety-Eight
Thousand Dollars ($15,498,000.00) and (b) One Hundred Two (102) shares of the
capital stock of Texas Drydock, Inc. ("TDI"), a Texas Corporation, for the price
and sum of Three Million Eight Hundred Seventy-Four Thousand Five Hundred
Dollars ($3,874,500.00) (collectively, the "MHI and Texas Drydock Acquisition").
3. The consent of the Banks to the MHI and Texas Drydock Acquisition
is subject to Borrower paying and Borrower agrees to pay, within three (3)
months after the effective date of this Consent of Banks and First Amendment to
Amended and Restated Revolving Credit Agreement, the $19,372,500.00 Loan
incurred for the MHI and Texas Drydock Acquisition through the incurrence of a
future Loan or other Indebtedness (in each case, in accordance with the terms of
the Revolving Credit Agreement). Borrower acknowledges and agrees that the
further consent of the Required Banks is required in order
<PAGE>
for Borrower to incur any such future Loan or other Indebtedness described in
this Paragraph 3 which consent shall not be unreasonably withheld.
4. The parties hereto do hereby amend and restate the definition of
"Company Business" in the Revolving Credit Agreement to read as follows:
Company Business shall mean (i) the construction, repair and
conversion of ocean-going and inland vessels, (ii) the construction,
repair and conversion of drilling rigs, barges and vessels, (iii) the
production of any component of or accessory to any such ocean-going or
inland vessel or drilling rig, barge or vessel, (iv) any other similar
type of production, construction or manufacturing, (v) any financing
related to the sale of any of the Borrower's or any Subsidiary's
products, and (vi) any other activities ancillary to the foregoing.
5. The parties hereto do hereby amend and restate the definition of
"Subsidiary" in the Revolving Credit Agreement to read as follows:
Subsidiary shall mean (a) any corporation of which more than fifty
percent (50%) of the issued and outstanding capital stock entitled to
vote for the election of directors (other than by reason of default in
the payment of dividends) is at the time owned directly or indirectly
by Borrower and/or any one or more Subsidiary of Borrower, or (b) any
partnership, limited liability company, business trust, or any other
similar entity of which more than fifty percent (50%) of the voting
interests is at the time owned directly or indirectly by Borrower
and/or any one or more Subsidiary of Borrower, and specifically
including, but not limited to, each of the entities described on
Schedule 7.8 hereto.
6. The parties hereto do hereby amend and restate Section 7.8 of the
Revolving Credit Agreement to read as follows:
7.8 Subsidiaries. There are no Subsidiaries other than as identified
on Schedule 7.8 attached hereto, as the same may from time to time be
amended, modified or supplemented as provided herein. The capital
stock of each Subsidiary is duly authorized, validly issued and fully
paid and nonassessable and, except for Maritime Holdings, Inc. and
Texas Drydock, Inc., is owned solely by Borrower and/or any one or
more Subsidiaries. Except as disclosed on Schedule 7.8 attached
hereto, neither Borrower nor any of its Subsidiaries, individually or
collectively, owns or holds, directly or indirectly, any capital stock
or equity security of, or any equity interest in, any corporation or
business. Borrower may at any time amend, modify or supplement
Schedule 7.8 by notifying the Agent in writing of any changes thereto,
including any formation, acquisition, merger or liquidation of
Subsidiaries or any change in the capitalization of any Subsidiary, in
each case, in accordance with the terms of this Agreement and provided
that any such new Subsidiary shall, within thirty (30) days of the
creation or acquisition of such Subsidiary, execute and deliver to
Agent for the benefit of all the Banks a Continuing Guarantee in form
of Exhibit C annexed hereto and made a part hereof.
7. Notwithstanding Sections 7.8 and 8.1(p) of the Revolving Credit
Agreement and the definition of "Continuing Guarantee" in the Revolving Credit
Agreement, MHI, TDI,
2
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and TDI International, Ltd. ("TDI International"), a Cayman Islands corporation,
shall not be required to execute a Continuing Guarantee unless and until MHI or
TDI become wholly owned Subsidiaries of Borrower and/or any one or more
Subsidiaries.
8. Advances or loans from Borrower and/or any one or more
Subsidiaries to MHI, TDI and/or TDI International shall not be considered a
Restricted Investment so long as (a) such advances and loans are represented by
a promissory note, (b) such advances and loans do not in the aggregate at any
one time exceed the MHI Borrowing Base and (c) the advances and loans to TDI
International do not in the aggregate at any one time exceed Five Million
Dollars ($5,000,000.00). The "MHI Borrowing Base" shall mean the sum of Thirty
Million Dollars ($30,000,000.00) less the sum of (a) the aggregate amount of all
loans and advances outstanding from Borrower and/or any one or more Subsidiaries
to MHI, TDI and/or TDI International (including principal, interest and any
fees) plus (b) the aggregate principal amount of all outstanding Letter of
Credit Loans arising out of Letter(s) of Credit securing or guaranteeing
obligations of or performance by MHI, TDI and/or TDI International plus (c) the
aggregate undrawn face amount of all outstanding Letter(s) of Credit securing or
guaranteeing obligations of or performance by MHI, TDI and/or TDI International.
9. The parties hereto do hereby amend Section 4.1(a) of the Revolving
Credit Agreement to add the following additional restrictions regarding the
issuance of Letters of Credit:
(viii) the sum of (A) the aggregate undrawn face amount of all
outstanding Letter(s) of Credit securing or guaranteeing
obligations of or performance by MHI, TDI and/or TDI
International plus (B) the aggregate principal amount of all
outstanding Letter of Credit Loans arising out of Letter(s) of
Credit securing or guaranteeing obligations of or performance
by MHI, TDI and/or TDI International shall not at any one time
exceed the sum of Thirty Million Dollars ($30,000,000.00); and
(ix) the sum of (A) the aggregate undrawn face amount of all
outstanding Letter(s) of Credit securing or guaranteeing
obligations of or performance by TDI International plus (B) the
aggregate principal amount of all outstanding Letter of Credit
Loans arising out of Letter(s) of Credit securing or
guaranteeing obligations of or performance by TDI International
shall not at any one time exceed the sum of Five Million
Dollars ($5,000,000.00).
10. The parties hereto do hereby amend and restate Section
4.1(a)(vii) of the Revolving Credit Agreement to read as follows:
(vii) the sum of (A) the aggregate undrawn face amount of all
outstanding Letter(s) of Credit securing or guaranteeing
obligations of or performance by Offshore plus (B) the
aggregate principal amount of all outstanding Letter of Credit
Loans arising out of Letter(s) of Credit securing or
guaranteeing obligations of or performance by Offshore shall
not at any one time exceed the Offshore Commitment.
11. Within ten (10) of the effective date hereof Borrower shall
furnish Agent with the following:
3
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(a) A Stock Pledge Agreement (the "Stock Pledge Agreement") by
Halter-Nevada whereby Halter-Nevada grants Agent for the benefit
of the Banks a first pledge and security interest in the stock of
MHI and TDI owned by Halter-Nevada, which Stock Pledge Agreement
shall be in such form as Agent may reasonably require;
(b) Such resolutions and certificates of Halter-Nevada and its
officers and such opinions of McGlinchey Stafford, a Professional
Limited Liability Company, or other counsel acceptable to Agent,
relating to the execution, delivery and performance by Halter-
Nevada of the Stock Pledge Agreement and the perfection and
priority of the security interest created thereby as may be
required by Agent and satisfactory in form and substance to the
Agent;
(c) Such resolutions and certificates of Borrower and its officers
relating to the execution, delivery and performance by Borrower
of this Consent of Banks and First Amendment to Amended and
Restated Revolving Credit Agreement as may be required by Agent
and satisfactory in form and substance to the Agent; and
(d) An agreement by the Subsidiaries which executed Continuing
Guarantees in such form as Agent may require consenting to the
execution of this Consent of Banks and First Amendment to Amended
and Restated Revolving Credit Agreement together with such
resolutions and certificates of such Subsidiaries and its
officers relating thereto as may be required by Agent and
satisfactory in form and substance to the Agent.
12. An amended and restated Schedule 7.8 to the Revolving Credit
Agreement is annexed hereto.
13. An amended and restated Schedule 7.12 to the Revolving Credit
Agreement is annexed hereto.
14. In connection with the foregoing and only in connection with the
foregoing, the Revolving Credit Agreement is hereby amended, but in all other
respects all of the terms, conditions and provisions of the Revolving Credit
Agreement remain unaffected.
15. This Consent of Banks and First Amendment to Amended and Restated
Revolving Credit Agreement may be executed in two or more counterparts, and it
shall not be necessary that the signatures of all parties hereto be contained on
any one counterpart hereof; each counterpart shall be deemed an original, but
all of which together shall constitute one and the same instrument.
TO THE END OF PAGE INTENTIONALLY LEFT BLANK
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
duly executed.
HALTER MARINE GROUP, INC. THE FIRST NATIONAL BANK OF CHICAGO
BY: _________________________ BY: _________________________
ITS: _________________________ ITS: _________________________
13085 Seaway Road One First National Plaza
Gulfport, MS 39503 Suite 0324
Telecopy number: (601) 897-4888 10th Floor
Chicago, IL 60670
Telecopy number: (312) 732-3055
WHITNEY NATIONAL BANK
THE BANK OF NOVA SCOTIA
BY: _________________________
ITS: _________________________
228 St. Charles Avenue BY: _________________________
New Orleans, LA 70130 ITS: _________________________
Telecopy number: (504) 552-4622 600 Peachtree Street NE
Suite 2700
Atlanta, GA 30308
FIRST NATIONAL BANK OF COMMERCE Telecopy number: (404) 888-8998
BY: _________________________ BANK ONE, LOUISIANA, N.A.
ITS: _________________________
Energy Services Dept., 2nd Fl.
210 Baronne Street BY: _________________________
New Orleans, LA 70112 ITS: _________________________
Telecopy number: (504) 561-1316 201 St. Charles Avenue
Suite 1410
New Orleans, LA 70170
HIBERNIA NATIONAL BANK Telecopy number:
BY: _________________________ THE BANK OF TOKYO -MITSUBISHI, LTD.
ITS: _________________________
313 Carondelet Street
New Orleans, LA 70130 BY: _________________________
Telecopy number: (504) 533-5434 ITS: _________________________
2001 Ross Avenue, LB118
3150 Trammel Crow Center
Dallas, TX 75201
Telecopy number: (214) 954-1007
5
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THE SUMITOMO BANK LIMITED
BY: _________________________
ITS: _________________________
BY: _________________________
ITS: _________________________
909 Fannin, Suite 3750
Houston, TX 77010
Telecopy number: (713) 759-1419
6
<PAGE>
EXHIBIT 10.2
AMENDED AND RESTATED CONSENT OF BANKS AND FIRST AMENDMENT
TO AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
This Amended and Restated Consent of Banks and First Amendment to Amended
and Restated Revolving Credit Agreement is entered into on this 15th day of
May, 1997, effective the 4th day of April, 1997, and is made and entered into by
and among HALTER MARINE GROUP, INC., a Delaware corporation ("Borrower") and the
undersigned Banks, including Whitney National Bank in its capacity as a Bank and
as Agent for the Banks under the Amended and Restated Revolving Credit Agreement
(which is hereinafter described) and constitutes an amendment and restatement of
the Consent of Banks and First Amendment to Amended and Restated Revolving
Credit Agreement, effective April 4, 1997.
WHEREAS, the parties hereto entered into an Amended and Restated Revolving
Credit Agreement, effective December 31, 1996 (the "Revolving Credit
Agreement");
WHEREAS, Borrower has requested the Banks to consent to one of its
Subsidiaries purchasing additional Subsidiaries and to the incurrence of
Indebtedness in connection therewith.
NOW THEREFORE, for good and adequate consideration the receipt of which is
hereby acknowledged, the parties hereto do hereby agree as follows:
1. As used herein, capitalized terms not defined herein shall have the
meanings attributed to them in the Revolving Credit Agreement.
2. The Banks do hereby consent to the purchase by Halter Marine, Inc.
("Halter-Nevada"), a Nevada Corporation and wholly owned Subsidiary of Borrower,
and consent to the use of Nineteen Million Three Hundred Seventy-Two Thousand
Five Hundred Dollars ($19,372,500.00) in Loan proceeds (the "$19,372,500.00
Loan") obtained by Borrower for the purchase of (a) Fifty-One Thousand (51,000)
shares of capital stock of Maritime Holdings, Inc.("MHI"), a Delaware
Corporation, for the price and sum of Fifteen Million Four Hundred Ninety-Eight
Thousand Dollars ($15,498,000.00) and (b) One Hundred Two (102) shares of the
capital stock of Texas Drydock, Inc. ("TDI"), a Texas Corporation, for the price
and sum of Three Million Eight Hundred Seventy-Four Thousand Five Hundred
Dollars ($3,874,500.00) (collectively, the "MHI and Texas Drydock Acquisition").
3. The consent of the Banks to the MHI and Texas Drydock Acquisition is
subject to Borrower paying and Borrower agrees to pay, within six (6) months
after the effective date of this Amended and Restated Consent of Banks and First
Amendment to Amended and Restated Revolving Credit Agreement, the $19,372,500.00
Loan incurred for the MHI and Texas Drydock Acquisition through the incurrence
of a future Loan or other Indebtedness (in each case, in accordance with the
terms of the Revolving Credit Agreement). Borrower acknowledges and agrees that
the further consent of the Required Banks is required in order for Borrower to
incur any such future Loan or other Indebtedness described in this Paragraph 3
which consent shall not be unreasonably withheld.
4. The Banks do hereby further consent to the purchase by Halter-Nevada of
Forty-Nine Thousand (49,000) shares of capital stock of MHI and Ninety-Eight
(98) shares of capital stock of TDI, for the total price and sum of Twenty-Seven
Million Dollars ($27,000,000.00). The Banks do hereby further consent to Halter-
Nevada incurring Indebtedness in favor of the
<PAGE>
sellers (including the note payable to the escrow agent) of such shares of MHI
and TDI set forth in this paragraph 4 in the amount of Twenty-Seven Million
Dollars ($27,000,000.00) bearing interest at the rate of seven and one-tenth (7
1/10%) percent per annum and due and payable on January 15, 1998 (such
Indebtedness, as it may be amended, renewed, replaced or refinanced, other than
through a Loan, shall be referred to as the "Seller Indebtedness"). Borrower
represents and warrants that after the purchases of MHI and TDI stock set forth
in paragraphs 2 and 4 hereof, Halter-Nevada will be the holder and owner of all
of the issued and outstanding stock of MHI and TDI. Borrower acknowledges and
agrees that the further consent of the Required Banks is required in order for
Borrower to incur any future Loan or other Indebtedness to pay off the Seller
Indebtedness which consent shall not be unreasonably withheld.
5. The parties hereto do hereby amend and restate the definition of
"Company Business" in the Revolving Credit Agreement to read as follows:
Company Business shall mean (i) the construction, repair and conversion of
ocean-going and inland vessels, (ii) the construction, repair and
conversion of drilling rigs, barges and vessels, (iii) the production of
any component of or accessory to any such ocean-going or inland vessel or
drilling rig, barge or vessel, (iv) any other similar type of production,
construction or manufacturing, (v) any financing related to the sale of any
of the Borrower's or any Subsidiary's products, and (vi) any other
activities ancillary to the foregoing.
6. The parties hereto do hereby amend and restate the definition of
"Subsidiary" in the Revolving Credit Agreement to read as follows:
Subsidiary shall mean (a) any corporation of which more than fifty percent
(50%) of the issued and outstanding capital stock entitled to vote for the
election of directors (other than by reason of default in the payment of
dividends) is at the time owned directly or indirectly by Borrower and/or
any one or more Subsidiary of Borrower, or (b) any partnership, limited
liability company, business trust, or any other similar entity of which
more than fifty percent (50%) of the voting interests is at the time owned
directly or indirectly by Borrower and/or any one or more Subsidiary of
Borrower, and specifically including, but not limited to, each of the
entities described on Schedule 7.8 hereto.
7. The parties hereto do hereby amend and restate Section 7.8 of the
Revolving Credit Agreement to read as follows:
7.8 Subsidiaries. There are no Subsidiaries other than as identified on
Schedule 7.8 attached hereto, as the same may from time to time be amended,
modified or supplemented as provided herein. The capital stock of each
Subsidiary is duly authorized, validly issued and fully paid and
nonassessable and is owned solely by Borrower and/or any one or more
Subsidiaries. Except as disclosed on Schedule 7.8 attached hereto and TDI
International, Ltd.'s interest in TDI Nass International, W.L.L., neither
Borrower nor any of its Subsidiaries, individually or collectively, owns or
holds, directly or indirectly, any capital stock or equity security of, or
any equity interest in, any corporation or business. Borrower may at any
time amend, modify or supplement Schedule 7.8 by notifying the Agent in
writing of any changes thereto,
2
<PAGE>
including any formation, acquisition, merger or liquidation of Subsidiaries
or any change in the capitalization of any Subsidiary, in each case, in
accordance with the terms of this Agreement and provided that any such new
Subsidiary shall, within thirty (30) days of the creation or acquisition of
such Subsidiary, execute and deliver to Agent for the benefit of all the
Banks a Continuing Guarantee in form of Exhibit C annexed hereto and made a
part hereof.
8. Borrower represents and warrants that TDI International, Ltd. owns
Forty-Nine (49%) percent of TDI Nass International, W.L.L., a limited liability
company organized under the laws of Bahrain. Investments by Borrower and/or any
one or more Subsidiaries in TDI Nass International, W.L.L. shall not be
considered Restricted Investments so long as the amount of such Investments in
TDI Nass International, W.W.L. made after the effective date hereof does not in
the aggregate exceed Five Million Dollars ($5,000,000.00).
9. The parties hereto do hereby amend and restate Section 4.1(a)(vii) of
the Revolving Credit Agreement to read as follows:
(vii) the sum of (A) the aggregate undrawn face amount of all outstanding
Letter(s) of Credit securing or guaranteeing obligations of or
performance by Offshore plus (B) the aggregate principal amount of
all outstanding Letter of Credit Loans arising out of Letter(s) of
Credit securing or guaranteeing obligations of or performance by
Offshore shall not at any one time exceed the Offshore Commitment.
10. Within ten (10) days of the execution date hereof Borrower shall
furnish Agent with the following:
(a) Continuing Guarantees executed by MHI, TDI and TDI International, Ltd.
(b) Such resolutions and certificates of MHI, TDI and TDI International,
Ltd. and their officers relating to the execution, delivery and
performance by MHI, TDI and TDI International, Ltd. of Continuing
Guarantees and such opinions of McGlinchey Stafford, a Professional
Limited Liability Company, or other counsel acceptable to Agent,
relating to the execution, delivery and performance by MHI and TDI of
Continuing Guarantees as may be required by Agent and satisfactory in
form and substance to the Agent;
(c) Such resolutions and certificates of Borrower and its officers
relating to the execution, delivery and performance by Borrower of
this Amended and Restated Consent of Banks and First Amendment to
Amended and Restated Revolving Credit Agreement as may be required by
Agent and satisfactory in form and substance to the Agent; and
(d) An agreement by the Subsidiaries (except MHI, TDI and TDI
International, Ltd.) in such form as Agent may require consenting to
the execution of this Amended and Restated Consent of Banks and First
Amendment to Amended and Restated Revolving Credit Agreement together
with such resolutions and certificates of such Subsidiaries and their
officers relating thereto as may be required by Agent and satisfactory
in form and substance to the Agent.
3
<PAGE>
10. An amended and restated Schedule 7.8 to the Revolving Credit Agreement
is annexed hereto.
11. An amended and restated Schedule 7.12 to the Revolving Credit
Agreement is annexed hereto.
12. In connection with the foregoing and only in connection with the
foregoing, the Revolving Credit Agreement is hereby amended, but in all other
respects all of the terms, conditions and provisions of the Revolving Credit
Agreement remain unaffected.
13. This Amended and Restated Consent of Banks and First Amendment to
Amended and Restated Revolving Credit Agreement may be executed in two or more
counterparts, and it shall not be necessary that the signatures of all parties
hereto be contained on any one counterpart hereof; each counterpart shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
TO THE END OF PAGE INTENTIONALLY LEFT BLANK
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be duly
executed.
HALTER MARINE GROUP, INC.
BY: _________________________ THE FIRST NATIONAL BANK OF CHICAGO
ITS: _________________________
13085 Seaway Road
Gulfport, MS 39503 BY: _________________________
Telecopy number: (601) 897-4888 ITS: _________________________
One First National Plaza
Suite 0324
WHITNEY NATIONAL BANK 10th Floor
Chicago, IL 60670
Telecopy number: (312) 732-3055
BY: _________________________
ITS: _________________________
228 St. Charles Avenue THE BANK OF NOVA SCOTIA
New Orleans, LA 70130
Telecopy number: (504) 552-4622
BY: _________________________
ITS: _________________________
FIRST NATIONAL BANK OF COMMERCE 600 Peachtree Street NE
Suite 2700
Atlanta, GA 30308
BY: _________________________ Telecopy number: (404) 888-8998
ITS: _________________________
Energy Services Dept., 2nd Fl.
210 Baronne Street BANK ONE, LOUISIANA, N.A.
New Orleans, LA 70112
Telecopy number: (504) 561-1316
BY: _________________________
ITS: _________________________
HIBERNIA NATIONAL BANK 201 St. Charles Avenue
Suite 1410
New Orleans, LA 70170
BY: _________________________ Telecopy number:
ITS: _________________________
313 Carondelet Street
New Orleans, LA 70130 THE BANK OF TOKYO -MITSUBISHI, LTD.
Telecopy number: (504) 533-5434
BY: _________________________
ITS: _________________________
2001 Ross Avenue, LB118
3150 Trammel Crow Center
Dallas, TX 75201
Telecopy number: (214) 954-1007
5
<PAGE>
THE SUMITOMO BANK LIMITED
BY: _________________________
ITS: _________________________
BY: _________________________
ITS: _________________________
909 Fannin, Suite 3750
Houston, TX 77010
Telecopy number: (713) 759-1419
6
<PAGE>
EXHIBIT 10.3
SECOND AMENDMENT
TO
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
This Second Amendment to Amended and Restated Revolving Credit Agreement is
effective as of June 30, 1997 by and among HALTER MARINE GROUP, INC., a Delaware
corporation ("Borrower") and the undersigned Banks, including Whitney National
Bank in its capacity as a Bank and as Agent for the Banks under the Revolving
Credit Agreement (which is hereinafter described).
WHEREAS, the parties hereto entered into an Amended and Restated Revolving
Credit Agreement, effective December 31, 1996, as amended by an Amended and
Restated Consent of Banks and First Amendment to Amended and Restated Revolving
Credit Agreement, dated May 15, 1997 but effective as of April 4, 1997 (the
"Revolving Credit Agreement"); and
WHEREAS, the parties hereto desire to amend the Revolving Credit Agreement
to modify the minimum Consolidated Tangible Net Worth financial covenant.
NOW THEREFORE, for good and adequate consideration the receipt of which is
hereby acknowledged, the parties hereto do hereby agree as follows:
1. As used herein, capitalized terms not defined herein shall have the
meanings attributed to them in the Revolving Credit Agreement.
2. The parties hereto do hereby amend and restate Section 8.1(m)(v) of the
Revolving Credit Agreement to read as follows:
(v) Minimum Consolidated Tangible Net Worth. Borrower will not
permit Consolidated Tangible Net Worth at the end of any fiscal quarter to
be less than $65,000,000.00 plus 50% of Consolidated Net Income (without
giving any effect to any losses), excluding any Consolidated Net Income due
to non-cash accounting adjustments, for each fiscal quarter ending after
June 30, 1997 plus 50% of the net cash proceeds received by the Borrower
from any sale of stock of the Borrower or any Subsidiary (other than the
Initial Offering) through any public offering within the meaning of the
Securities Act of 1933.
3. In connection with the foregoing and only in connection with the
foregoing, the Revolving Credit Agreement is hereby amended, but in all other
respects all of the terms, conditions and provisions of the Revolving Credit
Agreement remain unaffected.
4. This Second Amendment to Amended and Restated Revolving Credit
Agreement may be executed in two or more counterparts, and it shall not be
necessary that the signatures of all parties hereto be contained on any one
counterpart hereof; each counterpart shall be deemed an original, but all of
which together shall constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be duly
executed.
HALTER MARINE GROUP, INC.
BY: _________________________ THE FIRST NATIONAL BANK OF CHICAGO
ITS: _________________________
13085 Seaway Road
Gulfport, MS 39503 BY: _________________________
Telecopy number: (601) 897-4888 ITS: _________________________
One First National Plaza
Suite 0324
WHITNEY NATIONAL BANK 10th Floor
Chicago, IL 60670
Telecopy number: (312) 732-3055
BY: _________________________
ITS: _________________________
228 St. Charles Avenue THE BANK OF NOVA SCOTIA
New Orleans, LA 70130
Telecopy number: (504) 552-4622
BY: _________________________
ITS: _________________________
FIRST NATIONAL BANK OF COMMERCE 600 Peachtree Street NE
Suite 2700
Atlanta, GA 30308
BY: _________________________ Telecopy number: (404) 888-8998
ITS: _________________________
Energy Services Dept., 2nd Fl.
210 Baronne Street BANK ONE, LOUISIANA, N.A.
New Orleans, LA 70112
Telecopy number: (504) 561-1316
BY: _________________________
ITS: _________________________
HIBERNIA NATIONAL BANK 201 St. Charles Avenue
Suite 1410
New Orleans, LA 70170
BY: _________________________ Telecopy number:
ITS: _________________________
313 Carondelet Street
New Orleans, LA 70130 THE BANK OF TOKYO -MITSUBISHI, LTD.
Telecopy number: (504) 533-5434
BY: _________________________
ITS: _________________________
2001 Ross Avenue, LB118
3150 Trammel Crow Center
Dallas, TX 75201
Telecopy number: (214) 954-1007
2
<PAGE>
THE SUMITOMO BANK LIMITED
BY: _________________________
ITS: _________________________
BY: _________________________
ITS: _________________________
909 Fannin, Suite 3750
Houston, TX 77010
Telecopy number: (713) 759-1419
3
<PAGE>
Exhibit 11.1
HALTER MARINE GROUP, INC.
NET INCOME PER SHARE CALCULATION
FOR THREE MONTHS ENDING JUNE 30, 1997
CALCULATION OF COMMON STOCK EQUIVALENTS
Number of options outstanding 245,000
Option price 11.00
Average market price 21.25
Common stock equivalents
((market-exercise)/market) x number of shares = 118,176
CALCULATION OF EARNINGS PER SHARE
Number of shares outstanding 18,450,000
Add common stock equivalents 118,176
Total common and equivalents 18,568,176
Net income for the quarter 5,410,948
Net income per share $ 0.291
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM HALTER
MARINE GROUP INC. AND SUBSIDIARIES FINANCIAL STATEMENT JUNE 30, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> APR-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 3,022
<SECURITIES> 0
<RECEIVABLES> 49,972
<ALLOWANCES> 0
<INVENTORY> 100,733
<CURRENT-ASSETS> 158,101
<PP&E> 132,708
<DEPRECIATION> 46,215
<TOTAL-ASSETS> 271,541
<CURRENT-LIABILITIES> 97,430
<BONDS> 0
0
0
<COMMON> 185
<OTHER-SE> 98,527
<TOTAL-LIABILITY-AND-EQUITY> 271,541
<SALES> 149,069
<TOTAL-REVENUES> 149,069
<CGS> 130,503
<TOTAL-COSTS> 130,503
<OTHER-EXPENSES> 8,222
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,436
<INCOME-PRETAX> 8,769
<INCOME-TAX> 3,358
<INCOME-CONTINUING> 5,411
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,411
<EPS-PRIMARY> .29
<EPS-DILUTED> .29
</TABLE>
