<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 12, 2000
FRIEDE GOLDMAN HALTER, INC.
(Exact name of registrant as specified in its charter)
Mississippi 0-22595 64-0900067
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
13085 Industrial Seaway Road
Gulfport, Mississippi 39503
(Address of principal
executive offices
and zip code)
(228) 896-0029
(Registrant's telephone number,
including area code)
<PAGE>
Item 5. Other Events
On January 12, 2000, the Company issued a press release (the "Press
Release") announcing that it was taking certain steps to minimize the financial
and operational impact of problems resulting from four rig construction
contracts with two customers and plans to aggressively evaluate all
non-strategic assets and operations for divestiture opportunities.
The Company also announced that Vice Chairman, President and Chief
Operating Officer, John Dane III, has resigned his management positions with the
Company and that J.L. Holloway will assume the additional title of President of
the Company.
For additional information, reference is made to the Press Release, a
copy of which is attached as an exhibit hereto.
Item 7. Financial Statements and Exhibits
( c )
Exhibit 99.1 Press Release of Registrant dated January 12, 2000
<PAGE>
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 hereunto duly authorized.
FRIEDE GOLDMAN HALTER, INC.
Date: January 12, 2000
By: /s/Rick S. Rees
--------------------------------------
Rick S. Rees
Executive Vice President and
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
*99.1 Press Release of Registrant dated January 12, 2000
- -------------------
* Filed herewith.
<PAGE>
FRIEDE GOLDMAN HALTER, INC.
PRESS RELEASE
For immediate release
FRIEDE GOLDMAN HALTER ANNOUNCES RECENT DEVELOPMENTS
GULFPORT, MS, JANUARY 12, 2000 - Friede Goldman Halter, Inc. (NYSE: FGH) today
announced that the Company was taking certain steps to minimize the financial
and operational impact of problems resulting from four rig construction
contracts with two customers and plans to aggressively evaluate all
non-strategic assets and operations for divestiture opportunities.
The four rig contracts affected by these developments are the two rig contracts
for Ocean Rig ASA and two rig contracts for Petrodrill.
The Company has notified Ocean Rig ASA regarding additional construction delays
on the Bingo 9000 1 & 2 semisubmersible drilling rigs. Deficiencies in the
owner's design and late deliveries of owner-furnished equipment and
owner-furnished information have caused FGH additional delays and cost overruns.
The Company has not determined feasible delivery dates due to the delays in
Ocean Rig's delivery of owner-furnished equipment and owner-furnished
information as well as unresolved critical issues regarding Ocean Rig's
contractual obligation to commission the rigs. As a result of Ocean Rig's
failure to meet its obligations, the Company will not meet the scheduled
delivery dates of March 31 and June 30, 2000. The Company has previously
announced that it will make a claim for $75 million in compensation for
additional costs and delays in an arbitration proceeding that will begin January
27; the Company has subsequently increased its claim in the arbitration
proceeding to $95 million. The Company anticipates an arbitration decision by
the end of March. The Company believes that it has additional claims for
substantial amounts, in excess of the claims made in the pending arbitration,
for additional costs and delay damages relating to the construction of the two
rigs. These additional claims will not be considered as part of the arbitration
commencing at the end of January. The Company will assert such additional claims
in a subsequent arbitration proceeding, which was initiated by Ocean Rig on
January 11, 2000. Ocean Rig has asserted claims against the Company based on the
Company's failure to deliver the rigs on or prior to the contractual delivery
dates.
The Company has also notified Petrodrill that, as a result of ongoing delay,
deficiencies and other material defects in work by engineering subcontractors
chosen by Petrodrill, FGH is entitled to extensions of the contractual delivery
dates. The Company believes that the delays by these subcontractors constitute
permissible delay under the contracts. Petrodrill has consistently refused to
grant extensions in the delivery dates.
These factors are causing, and are expected to continue to cause, the Company to
-more-
<PAGE>
Friede Goldman Halter
January 12, 2000
Page 2
incur significant additional costs in excess of the Company's original
anticipated costs. The Company has responded by deferring additional fabrication
efforts on these projects, and is proceeding with detailed engineering only in
order to re-establish proper sequencing. Without the requested time extensions,
the Company has notified Petrodrill that the existing contract delivery dates
cannot be met. In addition, the Company has informed Petrodrill that it is
entitled to compensation for additional costs and delay damages. The Company
anticipates that Petrodrill will disagree with the Company's actions.
As a result of the continued sluggish market conditions through the fourth
quarter, merger related costs and the impacts of the Ocean Rig contracts, the
Company anticipates that it will report a loss for the quarter ended December
31, 1999. The amount of the loss has not been determined and is dependent, in
large part, upon the results of the Ocean Rig arbitration proceedings. The
results of those proceedings could materially impact the Company's financial
results for the fourth quarter. However, any costs incurred by the Company in
excess of the original contract price on the Petrodrill contracts will not
materially affect the Company's income statement because such amounts will be
reflected in the purchase accounting treatment of the acquisition by Friede
Goldman of Halter Marine Group, Inc. Under such accounting treatment, any such
excess amount will have the impact of increasing goodwill, which will be
amortized over a 25-year period.
The board of directors approved the Company's actions with regard to the Ocean
Rig and Petrodrill projects and also strongly endorsed the Company's ongoing
efforts to strengthen its position in the marketplace by aggressively evaluating
all non-strategic assets and operations for divestiture opportunities. The board
approved the retention of an investment banking firm to facilitate the process.
"Our decision to become more proactive in protecting our rights and interests on
both the Ocean Rig and Petrodrill projects was not arrived at easily," said J.
L. Holloway, Friede Goldman Halter's chairman and chief executive officer. "The
Friede Goldman Halter companies have a long history of meeting commitments for
virtually every established operator in the offshore energy industry. We are
pleased with the status of other projects in our vessel, engineered products and
offshore segments."
Separately, the Company announced that Vice Chairman, President and Chief
Operating Officer John Dane III has resigned his management positions with the
Company. J.L. Holloway will assume the additional title of President of the
Company, and the Company does not currently anticipate filling the office of
chief operating officer.
-more-
<PAGE>
Friede Goldman Halter
January 12, 2000
Page 3
Finally, the Company announced several new construction contracts with a total
value of $199 million. The recent contract signings were:
o A $110 million derrick/pipelay barge for the China National Offshore Oil
Company (CNOOC). The vessel will incorporate a 3,800 metric ton AmClyde
Model 60 crane and an AmClyde 8-point mooring system. The barge and many of
the AmClyde components will be built at the Yantai Raffles shipyard in
Yantai, China with Friede Goldman Offshore serving as prime contractor.
This contract is contingent upon the Company providing a financial
guarantee bond in the amount of 10% of the contract value.
o A $70 million car carrier for Pasha Hawaii Transport Lines, a joint venture
between The Pasha Group and Van Ommeren Shipping USA. The 580-foot vessel
will be constructed at the Company's Pascagoula, MS facility. Construction
is subject to U.S. Maritime Administration financing, an application for
which was applied for in December 1999.
o A $10 million contract to build an ocean-going tank barge for Express
Marine.
o A $9 million contract to build 30 deck barges for Ingram Industries.
Friede Goldman Halter is a world leader in the design and manufacture of
equipment for the maritime and offshore energy industries. Its operating units
are Friede Goldman Offshore (construction, upgrade and repair of drilling units,
mobile production units and offshore construction equipment), Halter Marine
(construction and repair of ocean-going vessels for commercial and governmental
markets), FGH Engineered Products Group (design and manufacture of cranes,
winches, mooring systems and marine deck equipment), and Friede & Goldman Ltd.
(naval architecture and marine engineering).
The statements contained in this press release that are not historical in nature
are forward-looking statements. The forward-looking statements contained here-in
are based on current expectations and are not guarantees since there are
inherent difficulties in predicting future results, and actual results could
differ materially from those expressed or implied in the forward-looking
statements. These factors include, without limitation, those disclosed in the
Form 10-Q, Form S-4 and other filings with the Securities and Exchange
Commission for Friede Goldman Halter, Inc.
# # #
- --------------------------------------------------------------------------------
For information regarding this or any of our press releases, contact:
John S. Hastings
Investor Relations and Corporate Communications
(228) 897-4987
*Note: This press release includes certain statements that may be deemed to be
"forward-looking statements" within the meaning of Section 27A of The Securities
Act of 1933, as amended, and Section 21 E of the Securities Exchange Act of
1934, as amended. All statements, other than statements of historical facts,
included in this press release that address activities, events or developments
that Friede Goldman Halter expects, believes or anticipates will or may occur in
the future, are forward-looking
<PAGE>
statements. These statements are based on certain assumptions and analyses made
by Friede Goldman Halter in light of its experience and its perception of
historical trends, current conditions, expected future developments and other
factors it believes are appropriate in the circumstances. Such statements are
subject to a number of assumptions, risks and uncertainties, many of which are
beyond the control of Friede Goldman Halter and which are discussed in Friede
Goldman Halter.'s Registration Statement on Form S-4 and the Annual Report on
Form 10-K. Investors are cautioned that any such statements are not guarantees
of future performance and that actual results or developments may differ
materially from those projected in the forward-looking statements.
