AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 30, 1999
REGISTRATION NO. 333-_________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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U S LIQUIDS INC.
(Exact name of Registrant as specified in charter)
<TABLE>
<CAPTION>
<S> <C> <C>
DELAWARE 8980 76-0519797
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
</TABLE>
411 N. SAM HOUSTON PARKWAY EAST, SUITE 400
HOUSTON, TEXAS 77060-3545
(281) 272-4500
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
GARY J. VAN ROOYAN
VICE PRESIDENT AND GENERAL COUNSEL
411 N. SAM HOUSTON PARKWAY EAST, SUITE 400
HOUSTON, TEXAS 77060-3545
(281) 272-4500
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
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COPY TO:
JOHN D. ROBERTSON, ESQ.
HARTZOG CONGER & CASON
201 ROBERT S. KERR, SUITE 1600
OKLAHOMA CITY, OKLAHOMA 73102
(405) 235-7000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after this Registration Statement becomes effective.
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If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. |_|
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. |_|
<PAGE>
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
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. |_|
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) SHARE(2) PRICE(2) FEE(3)
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<S> <C> <C> <C> <C> <C>
Common Stock, $.01 par value... 5,020,161 $20.375 $102,285,781 $28,436
================================================================================================================
</TABLE>
(1) The shares of Common Stock offered by the prospectus include 820,161
shares registered under Registration No. 333-34875 effective September 18,
1997 and included in such prospectus under Rule 429.
(2) Estimated solely for the purpose of calculating the registration fee
computed in accordance with Rule 457(c) on the basis of the average of the
high and low sales prices for the Common Stock on March 25, 1999.
(3) A fee of $22,966 was paid in connection with the filing of Registration
Statement No. 333-34875, of which $3,774 related to the 820,161 shares of
Common Stock included herein under Rule 429.
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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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION: March 31, 1999
5,020,161 Shares
U S LIQUIDS INC.
Common Stock
We may use this prospectus to issue or reserve shares of our common stock
from time to time in connection with the acquisition of various businesses. You
should read this prospectus for more information.
Our common stock is traded on the American Stock Exchange under the symbol
"USL." On March 29, 1999, the closing sale price of the common stock as reported
on the American Stock Exchange was $20 1/2 per share.
Our executive offices are located at 411 N. Sam Houston Parkway East,
Suite 400, Houston, Texas 77060-3545 and our telephone number is (281) 272-4500.
THIS INVESTMENT INVOLVES RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 5. YOU
SHOULD READ THE ENTIRE PROSPECTUS CAREFULLY BEFORE YOU MAKE YOUR INVESTMENT
DECISION.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
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THE DATE OF THIS PROSPECTUS IS MARCH 30, 1999
<PAGE>
ABOUT THIS PROSPECTUS
Under this prospectus, we may offer and issue up to 5,020,161 shares of
our common stock in connection with the acquisition of various businesses. We
may issue the shares in mergers or consolidations or in exchange for shares of
capital stock, partnership interests or other tangible or intangible assets
representing a direct or indirect interest in other companies or enterprises, or
for debt obligations of the acquired businesses. If we issue warrants, options,
convertible debt obligations, equity securities, contingent rights or other
similar instruments in connection with acquisitions, we may reserve shares for
issuance to cover the offering, issuance and sale upon exercise or conversion of
these rights.
For each acquisition, we expect to negotiate the terms with the owners or
controlling persons of the business we plan to acquire. We will value the shares
issued or reserved in each acquisition based on or related to market prices for
our common stock on any national securities exchange or quotation service on
which the shares may be listed or quoted at the time of sale. This valuation may
occur at the time we agree to the terms of an acquisition, the time of delivery
of our shares, during periods ending at or about such times based on average
market prices, or otherwise.
We will not pay underwriting discounts or commissions, although we may pay
brokers' or finders' fees with respect to specific acquisitions--in some cases
we may issue shares under this prospectus in full or partial payment of such
fees. Any person who receives such fees may be deemed to be an underwriter
within the meaning of the Securities Act of 1933.
With our consent, persons who have received or will receive shares under
this prospectus in connection with acquisitions ("Selling Stockholders") may use
this prospectus to sell such shares at a later date.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Securities and Exchange Commission ("SEC") allows us to "incorporate
by reference" the information we file with them, which means that we can
disclose important information to you by referring you to those documents. The
information incorporated by reference is considered to be part of this
prospectus, and information that we file later with the SEC will automatically
update and supersede this information. We incorporate by reference the documents
listed below and any future filings we will make with the SEC under Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until the
termination of this offering.
o Annual Report on Form 10-K for the year ended December 31,
1998;
o Current Report on Form 8-K filed with the SEC on January 29,
1999, as amended on February 16, 1999; and
o The description of our common stock contained in our
registration statement on Form 8-A filed with the SEC on
August 11, 1997 pursuant to Section 12 of the Securities
Exchange Act of 1934.
You may request a copy of any of these filings, at no cost, by writing or
telephoning us at the following address:
Mr. Gary J. Van Rooyan
Vice President and General Counsel
U S Liquids Inc.
411 N. Sam Houston Parkway East, Suite 400
Houston, Texas 77060-3545
Tel: (281) 272-4500
TO INSURE TIMELY DELIVERY OF ANY FILING, YOU MUST REQUEST THE FILING NO
LATER THAN FIVE BUSINESS DAYS BEFORE THE DATE THAT YOU MUST MAKE YOUR INVESTMENT
DECISION.
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AVAILABLE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549.
You may obtain information on the operation of the public reference room by
calling the SEC at 1-800-SEC-0330. Our SEC filings are also available on the
SEC's web site at "http://www.sec.gov."
We have filed with the SEC a registration statement on Form S-4 under the
Securities Act of 1933 with respect to the shares of common stock offered
hereby. As permitted by the SEC, this prospectus, which constitutes a part of
the registration statement, does not contain all of the information included in
the registration statement. Such additional information may be obtained from the
locations described above. Statements contained in this prospectus as to the
contents of any contract or other document are not necessarily complete. You
should refer to the contract or other document for all of the details.
THE COMPANY
GENERAL
We are a rapidly growing provider of liquid waste management services,
including collection, processing, recovery and disposal services. Our primary
focus of operations is industrial and commercial wastewater treatment, although
we also collect, process and dispose of oilfield waste. We operate 38 processing
facilities located in eleven states and serve over 40,000 customers. The
services that we provide to any particular customer vary depending on the type
of liquid waste generated, local regulations and the treatment capabilities of
local publicly-operated treatment works.
We provide liquid waste management services through a number of
subsidiaries that are organized into two divisions. The Wastewater Division
collects, processes and disposes of liquid waste (such as industrial wastewater,
grease and grit trap waste, bulk liquids and dated beverages, and certain
hazardous wastes) and recovers saleable by-products (such as fats, oils, feed
proteins, ethanol and solvents) from certain of the waste streams. Typically, we
process the liquid waste using a variety of physical, chemical, thermal and
biological techniques. Saleable by-products are recovered and sold, and any
remaining materials are sent to independent disposal sites. The Oilfield Waste
Division collects, processes and disposes of waste generated in oil and gas
exploration and production. The Wastewater Division generated $104.1 million, or
85.7%, of our revenues for the year ended December 31, 1998 and the Oilfield
Waste Division generated the remaining $17.4 million, or 14.3%, of such
revenues.
STRATEGY
Our objective is to be the largest and most profitable liquid waste
management company in each of the markets in which we operate. Our management
team, which has significant operating and consolidation experience in the waste
management industry, intends to continue pursuing a focused growth strategy
based on the following key elements:
o ACQUISITIONS. We pursue acquisitions of liquid waste management
businesses in existing and new geographic markets. We also make
smaller "tuck-in" acquisitions in our existing markets in order to
increase our facility and equipment utilization and expand our market
penetration and range of services. We believe that the liquid waste
management industry is highly fragmented and that substantial
acquisition opportunities exist throughout North America. From our
inception in November 1996 through March 19, 1999, we have acquired
43 businesses.
o INTERNAL GROWTH. In order to further expand our customer base, we
have positioned ourselves as a multi-city, single source provider of
liquid waste management services for national and regional generators
of liquid waste. We also intend to expand the capacity and processing
capabilities of our existing liquid waste facilities, and to amend
our permits for certain facilities in order to receive additional
liquid waste streams.
o OPERATIONAL ENHANCEMENTS. We intend to continue to improve our
operations through collection route densification and consolidation
and increased facility and equipment utilization. We also expect to
realize economies of scale and cost savings by consolidating certain
administrative functions at our corporate offices.
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o DECENTRALIZED MANAGEMENT. We manage our various businesses on a
decentralized basis, with local management maintaining responsibility
for the day-to-day operations, profitability and growth of the
business. We believe that this structure allows us to capitalize on
the considerable local and regional market knowledge and customer
relationships possessed by local management.
RECENT DEVELOPMENTS
From January 1, 1999 through March 19, 1999, we acquired six additional
businesses engaged in the collection, processing, recovery and disposal of
liquid waste, including Romic Environmental Technologies Corporation. Romic
operates liquid waste processing, and chemical and solvent recovery facilities
in California and Arizona. It also operates collection and transfer facilities
in California, Oregon and Washington. Romic had approximately $46.8 million of
revenues during 1998. The five other businesses acquired during this time period
collectively had approximately $8.2 million of annual revenues during 1998.
John N. Hatsopoulos became a director of the Company in December 1998. Mr.
Hatsopoulos is the retired president of Thermo Electron Corporation. Roger A.
Ramsey became a director of the Company in January 1999. Mr. Ramsey is the
retired chairman and chief executive officer of Allied Waste Industries, Inc.
To accommodate the growth in our business, we increased the size of our
credit facility in February 1999 from $100.0 million to $225.0 million.
On March 17, 1999, we completed a public offering of 3,000,000 shares of
our common stock. The $56.8 million of net proceeds that we received from the
2,875,000 shares that we sold in this offering will be applied against the
outstanding balance of our credit facility, the vast majority of which
indebtedness was incurred in connection with acquisitions completed in 1998 and
1999.
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RISK FACTORS
Before you invest in our common stock, you should be aware that there are
various risks, including those described below. You should carefully consider
these risk factors, together with all the other information included or
incorporated by reference in this prospectus, before you decide whether to
purchase shares of our common stock.
Some of the information in this prospectus contains forward-looking
statements that involve substantial risks and uncertainties. You can identify
these statements by forward-looking words such as "may," "will," "expect,"
"anticipate," "believe," "estimate," and "continue" or similar words. You should
read statements that contain these words carefully because they (i) discuss our
future expectations; (ii) contain projections of our future results of
operations or of our financial condition; or (iii) state other "forward-looking"
information. We believe it is important to communicate our expectations to our
investors. However, there may be events in the future that we are not able to
accurately predict or over which we have no control. The risk factors listed in
this section, as well as any cautionary language in this prospectus, provide
examples of risks, uncertainties and events that may cause our actual results to
differ materially from the expectations we describe in our forward-looking
statements. Before you invest in our common stock, you should be aware that the
occurrence of the events described in these risk factors and elsewhere in this
prospectus could have a material adverse effect on our business, results of
operations and financial condition.
RISKS RELATED TO OPERATING AND INTERNAL GROWTH STRATEGY
Key elements of our strategy are to improve the profitability and increase
the revenues of our existing operations and any subsequently acquired
businesses. We intend to improve the profitability of our existing operations
and any subsequently acquired businesses by various means, including achieving
operating efficiencies and economies of scale. Our ability to increase the
revenues of our existing operations and any subsequently acquired businesses
will be affected by various factors, including:
o The demand for liquid waste collection, processing and disposal
services;
o Our ability to expand the range of services offered to
customers;
o Our ability to develop national and regional accounts for our
liquid waste management services and other marketing programs;
and
o The demand for by-products we recover from certain liquid waste
streams.
Many of these factors are beyond our control, and there can be no
assurance that our operating and internal growth strategies will be successful
or that we will be able to generate cash flows adequate for our operations and
to support internal growth.
MANAGEMENT OF GROWTH
To manage our growth effectively, we must implement and improve our
operational, financial and management information systems and controls, and
train, motivate and manage our employees. We periodically review and upgrade our
management information systems, as well as hire additional management and other
personnel in order to maintain the adequacy of our operational, financial and
management controls. If we fail to manage our growth effectively, our business,
results of operations and financial condition could be materially and adversely
affected.
RISKS RELATED TO OUR ACQUISITION STRATEGY AND ACQUISITION FINANCING
The Company was organized in November 1996. Since that time, we have
experienced rapid growth, primarily through acquisitions, and we intend to
acquire additional liquid waste management businesses. We expect to face
competition for acquisition candidates, which may limit the number of
acquisition opportunities and may lead to higher acquisition prices. We may not
be able to identify, acquire or manage additional businesses profitably or to
integrate successfully any acquired businesses without material costs, delays or
other operational or financial problems. Businesses
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that we acquire may have liabilities that we underestimate or do not discover
during our pre-acquisition investigations. These liabilities may include those
arising from environmental contamination or non-compliance by prior owners with
environmental laws or regulatory requirements, and for which we, as a successor
owner or operator, may be responsible. Certain environmental liabilities, even
if not expressly assumed by us, may be imposed on us under certain legal
principles of successor liability, including those under the Comprehensive
Environmental Response Compensation and Liability Act, as amended. Further, each
acquisition involves a number of other special risks that could cause the
acquired business to fail to meet our expectations. For example:
o The acquired business may not achieve expected results.
o We may not be able to retain key personnel of the acquired
business.
o We may not be able to successfully integrate the acquired
business in a timely manner or we may incur substantial costs,
delays or other operational or financial problems during the
integration process.
o It may be difficult to integrate a business with personnel who
have different business backgrounds and corporate cultures than
ours.
o Our management group may not be able to effectively manage the
combined entity or to effectively implement our acquisition
program and internal growth strategy simultaneously.
We cannot readily predict the timing, size or success of our future
acquisitions or the associated capital requirements. We currently intend to
finance future acquisitions by using a combination of common stock and cash. If
shares of common stock are issued in connection with future acquisitions or
earn-out provisions of completed acquisitions, you may experience dilution in
the net tangible book value of your stock. If the common stock does not maintain
a sufficient market value, or potential acquisition candidates are not willing
to accept common stock as part of the consideration for the sale of their
businesses, we may be required to use more of our cash resources, if available,
or incur indebtedness in order to continue our acquisition program. We have a
$225.0 million credit facility with a group of banks under which we may borrow
to fund acquisitions and working capital requirements; however, under the credit
facility, the banks' consent is required for us to make certain acquisitions or
incur significant indebtedness (including, without limitation, debt assumed in
connection with acquisitions). As of March 19, 1999, the outstanding principal
balance of the credit facility was approximately $105.0 million. If we do not
have sufficient cash resources to fund our acquisition plans, our growth could
be limited unless we are able to obtain additional capital through debt or
equity financings. We may not be able to obtain such financing when required or
such financing may only be available on terms and conditions that are
unacceptable to us.
COMPETITION
The liquid waste management industry is highly fragmented and very
competitive. We compete with other liquid waste processing facilities and
alternative methods of disposal of certain waste streams provided by area
landfills and injection wells, as well as the alternative of illegal disposal.
In addition, competitive products and services have been and are likely to
continue to be developed and marketed by others. Furthermore, future
technological change and innovation may result in a reduction in the amount of
liquid waste being generated or alternative methods of processing and disposal
being developed. The markets for the various by-products that we sell are also
very competitive. With respect to our oilfield waste operations, we must compete
with alternative methods of off-site disposal of oilfield waste. We also face
competition from customers who develop or enhance their own methods of disposal
instead of using the services of liquid waste management companies. Future
technological change and innovation may increase the amount of internal oilfield
waste processing and disposal as well as the number of competitors in this
market. Increased use of internal processing and disposal methods and other
competitive factors could have a material adverse effect on our business,
results of operations and financial condition.
Our competitors may be better capitalized, have greater name recognition
or be able to provide services or products at a lower cost. In addition, as the
liquid waste market matures, competition can be expected to increase. As a
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result of these and other competitive factors, our strategy may not be
successful and we may not be able to generate adequate cash flows to fund our
operations.
FAILURE TO COMPLY WITH GOVERNMENTAL REGULATIONS
Our business is subject to numerous federal, state and local laws,
regulations and policies that govern environmental protection, zoning and other
matters. These laws and regulations have changed frequently in the past and it
is reasonable to expect additional changes in the future. If existing regulatory
requirements change, we may be required to make significant capital and
operating expenditures. Although we believe that we are presently in material
compliance with applicable laws and regulations, our operations may not continue
to comply with future laws and regulations. Governmental authorities may seek to
impose fines and penalties on us or seek to revoke or deny the issuance or
renewal of operating permits for failure to comply with applicable laws and
regulations. Under these circumstances, we might be required to curtail or cease
operations or conduct site remediation until a particular problem is remedied,
which could have a material adverse effect on our business, results of
operations and financial condition.
IMPACT OF FAILURE TO OBTAIN OR MAINTAIN NECESSARY GOVERNMENTAL APPROVALS
We operate in a highly regulated environment and are required to have
permits and approvals from federal, state and local governments. Any of these
permits or approvals or applications could be denied, revoked or modified under
various circumstances. In addition, if new environmental legislation or
regulations are enacted or existing legislation or regulations are amended or
are enforced differently, we might be required to obtain additional operating
permits or approvals. The process of obtaining or renewing a required permit or
approval can be lengthy and expensive and our efforts to obtain permits,
renewals or approvals may be opposed by citizens groups, adjacent landowners or
others. Our City Environmental facility in Detroit, Michigan has never been
granted a permit under the Resource Conservation and Recovery Act of 1976
("RCRA") and is continuing to operate under interim status, as allowed by RCRA.
In addition, our Romic facility in East Palo Alto, California is operating under
a RCRA permit that expired in 1991, but that allows for ongoing operations. With
respect to both facilities, all necessary applications, renewal applications and
other documentation were timely filed and applicable regulations allow the
facilities to continue to operate. However, we may not be successful in
obtaining or maintaining these and other required permits and approvals and that
failure could have a material adverse effect on our business, results of
operations and financial condition.
POTENTIAL ENVIRONMENTAL LIABILITY
We may be subject to liability for environmental damage that our
processing facilities and collection operations may have caused or may cause
nearby landowners, particularly as a result of the contamination of drinking
water sources or soil, including damage resulting from conditions existing prior
to our acquisition of the facilities or operations. Liability may also arise
from any off-site environmental contamination caused by hazardous substances,
the transportation, treatment or disposal of which we arranged or which was
arranged by the owners of businesses that we have acquired. Any substantial
liabilities for environmental damage could have a material adverse effect on our
business, results of operations and financial condition. During the ordinary
course of our business, we may become involved in a variety of legal and
administrative proceedings relating to land use and environmental laws and
regulations, including actions or proceedings:
o By governmental agencies seeking to impose civil or criminal
penalties on us;
o By governmental agencies seeking to revoke or deny renewal of one or
more of our permits;
o By citizens groups, adjacent landowners or governmental agencies
opposing the issuance of a permit or approval to us or alleging
violations of the permits under which we operate; or
o By citizens groups and adjacent landowners seeking to impose
liability on us for environmental damage at any of our facilities (or
facilities formerly owned by us or any acquired business) or damage
that those facilities or other properties may have caused.
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The adverse outcome of one or more of these proceedings could have a
material adverse effect on our business, results of operations and financial
condition.
During the ordinary course of our operations, we have from time to time
received, and expect that we may in the future receive, citations or notices
from governmental authorities that our operations are not in compliance with our
permits or certain applicable environmental or land use laws and regulations. We
generally seek to work with the authorities to resolve the issues raised by
these citations or notices. However, we may not always be successful in this
regard and future citations or notices could have a material adverse effect on
our business, results of operations and financial condition.
Our subsidiary, Romic Environmental Technologies Corporation, has entered
into an administrative consent order with the United States Environmental
Protection Agency ("EPA") relating to the cleanup of soil and groundwater
contamination at its facility in East Palo Alto, California. A study to
determine the nature of the contamination has been completed and Romic submitted
a corrective measures study to the EPA in March 1999. Based upon the information
gathered from these studies, as of December 31, 1998, Romic had reserved
approximately $2.2 million to cover its estimated costs at this facility.
However, the ultimate cost may exceed this reserve. Romic has also entered into
administrative consent orders and agreements with the EPA and the California
Department of Toxic Substances Control relating to three drum reconditioning or
disposal sites to which it delivered waste. Based upon the studies and remedial
actions completed, as of December 31, 1998, Romic had reserved approximately
$775,000 to cover its share of the estimated costs for these sites. However, the
ultimate cost may exceed this reserve.
INSUFFICIENCY OF INSURANCE
While we maintain liability insurance, it is subject to coverage limits
and certain policies exclude coverage for damages resulting from environmental
contamination. Although there are currently numerous sources from which such
coverage may be obtained, it may not continue to be available to us on
commercially reasonable terms or the possible types of liabilities that may be
incurred by us may not be covered by our insurance. In addition, our insurance
carriers may not be able to meet their obligations under the policies or the
dollar amount of the liabilities may exceed our policy limits. Even a partially
uninsured claim, if successful and of significant magnitude, could have a
material adverse effect on our business, results of operations and financial
condition.
DEPENDENCE UPON OILFIELD WASTE EXEMPTION UNDER RCRA AND OTHER ENVIRONMENTAL
REGULATIONS
Oilfield waste is currently exempt from the requirements of RCRA, which is
the principal federal statute governing the handling and disposal of waste. In
recent years, proposals have been made to rescind or modify this exemption. The
repeal or modification of the exemption covering oilfield waste or modification
of applicable regulations or interpretations regarding the processing and
disposal of oilfield waste would require us to alter our method of processing
and disposing of oilfield waste. This could have a material adverse effect on
our business, results of operations and financial condition.
Each of our operations is also dependent to varying degrees on the
existence and enforcement of local, state and federal environmental regulations.
Any repeal or relaxation of those regulations, or a failure of governmental
authorities to enforce the regulations, could result in decreased demand for our
services and, therefore, could have a material adverse effect on our business,
results of operations and financial condition. Our operations may also be
adversely affected by new regulations or changes in other applicable
regulations.
DEPENDENCE ON OIL AND GAS INDUSTRY
Demand for our oilfield waste processing and disposal services depends in
large part upon the level of exploration for and production of oil and gas,
particularly in the Gulf Coast region. This demand, in turn, depends on, among
other things, 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 and the ability of oil and gas companies to raise capital.
Historically, prices for oil and gas 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. Current levels of oil and gas exploration and production activities
may not be maintained. Prices for oil and
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natural gas are expected to continue to be volatile and affect demand for our
oilfield waste services. A material decline in oil or natural gas prices or
exploration activities could materially affect the demand for our oilfield waste
services and, therefore, our business, results of operations and financial
condition.
RELIANCE ON KEY PERSONNEL
We are highly dependent on our executive officers and senior management,
and we likely will depend on the senior management of any significant business
we acquire in the future. The loss of the services of any of our current
executive officers or key employees or any member of senior management of any
acquired business could have a material adverse effect on our business, results
of operations and financial condition. In addition, debt outstanding under our
credit facility may be accelerated by the lenders if, among other things,
Michael P. Lawlor, W. Gregory Orr or Earl J. Blackwell ceases to serve as an
executive officer of the Company and is not replaced within 60 days by an
individual reasonably satisfactory to the lenders. We have tried to reduce some
of this risk by maintaining key man life insurance in the amount of $5.0 million
on each of Messrs. Lawlor, Orr and Blackwell.
VARIABILITY OF QUARTERLY OPERATING RESULTS
Variations in our revenues and operating results can occur from quarter to
quarter as a result of a number of factors, including:
o The consummation of acquisitions;
o The demand for our services by our customers;
o Weather conditions;
o The level of oil and gas exploration and production activity in the
Gulf Coast;
o The number of business days in a quarter; and
o General economic conditions.
Because a significant portion of our expenses are relatively fixed, a variation
in revenues could cause a significant variation in our quarterly operating
results and could result in losses.
VOLATILITY OF OUR STOCK PRICE
Our common stock was first publicly traded on August 20, 1997 and has
traded from a low of $12 5/8 per share to a high of $26 3/8 per share. The
market price of our common stock could continue to fluctuate substantially due
to a variety of factors, including:
o Quarterly fluctuations in results of operations;
o Changes in the regulatory environment or market conditions affecting
the liquid waste management industry;
o Announcement and market acceptance of acquisitions;
o Changes in earnings estimates by analysts;
o Loss of key personnel;
o Changes in accounting principles or policies;
o Sales of common stock by existing stockholders;
9
<PAGE>
o Announcements of key developments by competitors; and
o Economic and political conditions.
The market price for our common stock may also be affected by our ability
to meet analysts' expectations. Any failure to meet such expectations, even
slightly, could have an adverse effect on the market price of our common stock.
In addition, the stock market is subject to extreme price and volume
fluctuations. This volatility has had a significant effect on the market prices
of securities issued by many companies for reasons unrelated to the operating
performance of these companies. In the past, following periods of volatility in
the market price of a company's securities, securities class action litigation
has often been instituted against the company. If similar litigation were
instituted against us, it could result in substantial costs and a diversion of
our management's attention and resources, which could have an adverse effect on
our business, results of operations and financial condition.
LACK OF DIVIDENDS
We have not paid dividends on our common stock and we do not anticipate
paying dividends in the foreseeable future. We intend to retain future earnings,
if any, to finance the expansion of our operations and for general corporate
purposes, including future acquisitions. In addition, our credit facility
prohibits us from paying dividends on our capital stock.
POTENTIAL ANTI-TAKEOVER EFFECT OF CERTAIN CHARTER PROVISIONS
Our Board of Directors is divided into three classes, with each class
serving a staggered three-year term. This classification system makes it more
difficult for stockholders to replace directors and may tend to discourage a
third party from making a tender offer or otherwise attempting to obtain control
of the Company. In addition, our Board of Directors is authorized to issue,
without further stockholder action, up to 5,000,000 shares of Preferred Stock
with rights that could adversely affect the rights of holders of common stock.
No shares of Preferred Stock are presently outstanding, and we have no present
plans to issue any such shares. The issuance of shares of Preferred Stock under
certain circumstances could have the effect of delaying, deterring or preventing
a change in control of the Company or other corporate action and of discouraging
bids for our common stock.
RESALES OF SHARES
With our consent, this prospectus may be used by Selling Stockholders who
may wish to sell shares of common stock. We may consent to the use of this
prospectus by Selling Stockholders for a limited period of time and subject to
limitations and conditions which may be varied by agreement between us and one
or more Selling Stockholders. Selling Stockholders may agree that:
o an offering of shares under this prospectus will be effected in an
orderly manner through securities dealers, acting as broker or
dealer, selected by us;
o they will enter into custody agreements with one or more banks with
respect to such shares; or
o that they make sales only by one or more of the methods described in
this prospectus, as appropriately supplemented or amended when
required.
We will not receive any of the proceeds from any sale of shares offered by a
Selling Stockholder.
A Selling Stockholder may sell shares:
o on any national securities exchange or quotation service on which
our common stock is listed or quoted at the time of sale;
o in the over-the-counter market;
10
<PAGE>
o in transactions other than on an exchange or in the over-the-counter
market;
o in connection with short sales of shares;
o by pledge to secure debts and obligations;
o in connection with the writing of call options, in hedging
transactions and in settlement of other transactions in standardized
or over-the-counter options; or
o in a combination of any of the above transactions.
Shares may be sold at a fixed offering price, which may be changed, at the
prevailing market price at the time of sale, at prices related to such
prevailing market price or at negotiated prices. Selling Stockholders may use
underwriters, brokers, dealers or agents to sell their shares. Any underwriters,
brokers, dealers or agents may arrange for others to participate in any such
transaction and may receive compensation in the form of discounts, commissions
of concessions from Selling Stockholders and/or the purchasers of shares.
If required at the time that a particular offer of shares is made, a
supplement to this prospectus will be delivered that describes any material
arrangements for the distribution of shares and the terms of the offering
including, without limitation, the names of any underwriters, brokers, dealers
or agents and any discounts, commissions or concessions and other items
constituting compensation from the Selling Stockholder or otherwise.
Selling Stockholders and any underwriters, brokers, dealers or agents that
participate with a Selling Stockholder in the distribution of shares may be
deemed to be "underwriters" within the meaning of the Securities Act of 1933, in
which event any discounts, commissions or concessions received by such
underwriters, brokers, dealers or agents and any profit on the resale of shares
purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act of 1933.
We may agree to indemnify Selling Stockholders or any participating
underwriters, brokers, dealers or agents against certain civil liabilities,
including liabilities under the Securities Act of 1933, and to reimburse them
for certain expenses in connection with the offering and sale of shares.
Selling Stockholders may also offer shares of common stock covered by this
prospectus under exemptions from the registration requirements of the Securities
Act of 1933, including sales which meet the requirements of Rule 145(d) under
the Securities Act of 1933.
USE OF PROCEEDS
This prospectus relates to shares of our common stock that we may offer
and issue from time to time in connection with the acquisition of other
businesses and properties and interests therein, and upon exercise or conversion
of warrants, options, convertible debt obligations, equity securities,
contingent rights, or other similar instruments issued by us in connection with
such acquisitions. Other than the businesses or properties acquired, we will
generally not receive any proceeds from the issuance of shares under this
prospectus. However, in situations where we issue warrants or options to
purchase common stock in connection with an acquisition, any proceeds that we
receive upon the exercise of the warrants or options will be used for general
corporate purposes. When this prospectus is used by a Selling Stockholder in a
public reoffering or resale of common stock acquired pursuant to this
prospectus, we will not receive any proceeds from such sale by the Selling
Stockholder.
11
<PAGE>
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY
Our common stock has been listed on the American Stock Exchange since
August 20, 1997. The trading symbol for our common stock is "USL." The following
table sets forth, for the periods indicated, the high and low sales prices for
the common stock as reported on the American Stock Exchange.
PRICE RANGE
OF COMMON STOCK
--------------------
Year Ended December 31, 1997 HIGH LOW
Third Quarter (beginning August 20) ............ $18 3/16 $13 1/8
Fourth Quarter ................................. 19 3/8 12 5/8
Year Ended December 31, 1998
First Quarter .................................. $20 3/4 $14 1/4
Second Quarter ................................. 25 1/4 19
Third Quarter .................................. 23 1/8 14 5/8
Fourth Quarter ................................. 23 14
Year Ended December 31, 1999
First Quarter (through March 29, 1999) ......... $26 3/8 $19 1/2
We have not paid dividends on our common stock and do not anticipate paying
dividends in the foreseeable future. We intend to retain future earnings, if
any, to finance the expansion of our operations and for general corporate
purposes, including future acquisitions. Furthermore, we are prohibited from
declaring or paying cash dividends on our capital stock under the terms of our
credit facility.
LEGAL MATTERS
Our counsel, Hartzog Conger & Cason, Oklahoma City, Oklahoma, will give an
opinion that the shares of common stock covered by this prospectus are valid.
EXPERTS
The audited financial statements incorporated by reference in this
prospectus have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
incorporated by reference herein in reliance upon the authority of said firm as
experts in giving these reports.
12
<PAGE>
You should rely only on the information contained in this document or that we
have referred to you. We have not authorized anyone to provide you with
different information. You should not assume that the information in this
prospectus is accurate as of any date other than the date on the front of the
document.
<PAGE>
INDEX TO FINANCIAL STATEMENTS
U S LIQUIDS INC. PRO FORMA
Introduction to Unaudited Pro Forma Financial Statements.... F-2
Pro Forma Balance Sheet (Unaudited)......................... F-3
Notes to Pro Forma Balance Sheet (Unaudited) ............... F-4
Pro Forma Statement of Operations (Unaudited) .............. F-5
Notes to Pro Forma Statement of Operations (Unaudited) ..... F-6
<PAGE>
U S LIQUIDS INC.
INTRODUCTION TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS
The following unaudited pro forma financial statements present the balance
sheet and statement of operations data from the consolidated financial
statements of U S Liquids Inc. (U S Liquids or the Company) combined with the
historical financial data of companies acquired by the Company from January 1,
1998 through March 19, 1999 (the "Acquired Companies") as follows: (i) the
unaudited pro forma balance sheet includes the historical consolidated balance
sheet data of U S Liquids at December 31, 1998 combined with those of the
Acquired Companies acquired after December 31, 1998 as if each had been acquired
on December 31, 1998 and (ii) the unaudited pro forma statement of operations
for the year ended December 31, 1998 includes the historical consolidated
statement of operations of U S Liquids for the year ended December 31, 1998
combined with those of all Acquired Companies, as if each had been acquired on
January 1, 1998. Additionally, the effects of the Company's public offering of
3,450,000 shares in June 1998 and its public offering of 2,875,000 shares in
March 1999 and the application of the net proceeds from these offerings are
included in the unaudited pro forma financial statements as if they had each
occurred on January 1, 1998.
The pro forma financial statements include certain adjustments to the
historical financial statements of the Acquired Companies, including adjustments
to depreciation and amortization expenses to reflect purchase price allocations,
adjustments to interest expense to reflect debt issued in connection with the
acquisitions, and certain reductions of salaries and benefits payable to the
previous owners of the Acquired Companies. With respect to these reductions in
salaries and benefits payable to previous owners, the Company has preliminarily
analyzed the savings that it expects to be realized. To the extent the former
owners of the Acquired Companies have agreed prospectively to reductions in
salary, bonuses and benefits, these reductions have been reflected in the pro
forma statement of operations. With respect to other expected potential cost
savings, U S Liquids has not and cannot quantify these savings and, accordingly,
they have not been included in the pro forma financial information of the
Company.
The pro forma adjustments are based on preliminary estimates, available
information and certain assumptions and may be revised as additional information
becomes available. The pro forma financial statements do not purport to
represent what the Company's financial position or results of operations would
actually have been if such transactions in fact occurred on those dates or
project the Company's financial position or results of operations for any future
period. Since the Company and the Acquired Companies were not under common
control or management for all periods, the pro forma financial results may not
be comparable to, or indicative of, future performance.
F-2
<PAGE>
U S LIQUIDS INC.
PRO FORMA BALANCE SHEET (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, 1998
------------------------------------------------------
HISTORICAL ACQUIRED PRO FORMA
CONSOLIDATED COMPANIES ADJUSTMENTS PRO FORMA
------------ --------- --------------- ---------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents.......... $ 3,285 $ 3 $ $ 3,288
Accounts receivable, net of
allowance....................... 29,123 6,059 156 (a) 35,338
Inventories........................ 672 542 167 1,381
Prepaid expenses and other current
assets.......................... 5,416 1,834 (214)(a) 7,036
------------ --------- --------------- ---------
Total current assets....... 38,496 8,438 109 47,043
PROPERTY, PLANT AND EQUIPMENT, net... 85,958 15,347 2,567 (a) 103,872
INTANGIBLE ASSETS, net............... 125,871 -- 29,444 (a) 155,315
OTHER ASSETS, net.................... 1,840 1,236 (1,225)(a) 1,851
------------ --------- --------------- ---------
Total assets............... $252,165 $25,021 $ 30,895 $ 308,081
============ ========= =============== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term
obligations..................... $ 4,004 $ 1,925 $ (1,040)(a) $ 4,889
Accounts payable................... 11,611 2,905 (154) 14,362
Accrued liabilities................ 15,445 2,572 (91)(a) 17,926
Current portion of contract reserve 4,500 -- 4,500
------------ --------- --------------- ---------
Total current
liabilities............ 35,560 7,402 (1,285) 41,677
LONG-TERM OBLIGATIONS, net of current
maturities......................... 64,390 3,782 33,324 (a) 44,740
(56,756)(c)
PROCESSING RESERVE................... 5,747 -- 5,747
CLOSURE AND REMEDIATION RESERVES..... 4,952 3,887 (652)(a) 8,187
CONTRACT RESERVE..................... 14,421 -- 14,421
DEFERRED INCOME TAXES................ 2,151 -- 450 (a) 2,601
------------ --------- --------------- ---------
Total liabilities.......... 127,221 15,071 (24,919) 117,373
------------ --------- --------------- ---------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock....................... 125 19 (15)(a) 158
29 (b)
Additional paid-in capital......... 110,404 -- 9,004 (a) 176,135
56,727 (b)
Retained earnings.................. 14,415 9,931 (9,931)(a) 14,415
---------- --------- --------------- ---------
Total stockholders'
equity.................. 124,944 9,950 55,814 190,708
------------ --------- --------------- ---------
Total liabilities and
stockholders' equity.... $252,165 $25,021 $ 30,895 $ 308,081
============ ========= =============== =========
</TABLE>
The accompanying notes are an integral part of this pro forma financial
statement.
F-3
<PAGE>
U S LIQUIDS INC.
NOTES TO PRO FORMA BALANCE SHEET (UNAUDITED)
(a) These adjustments reflect the acquisition of those Acquired Companies
that were acquired subsequent to December 31, 1998 through March 19,
1999, including approximately 431,588 shares issued. These adjustments
also reflect preliminary purchase price allocations with respect to
these Acquired Companies, including allocating the deferred income tax
liability attributable to the temporary differences between the
financial reporting and income tax bases on assets and liabilities
previously held as S Corporations.
(b) Reflects the proceeds from the issuance of 2,875,000 shares of common
stock from the March 1999 offering, net of estimated offering costs.
(c) Reflects the repayment of certain debt obligations with proceeds from
the March 1999 offering.
F-4
<PAGE>
U S LIQUIDS INC.
PRO FORMA STATEMENT OF OPERATIONS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1998
---------------------------------------------------------
HISTORICAL ACQUIRED PRO FORMA
CONSOLIDATED COMPANIES ADJUSTMENTS PRO FORMA
------------- ----------- ------------ ----------
<S> <C> <C> <C>
REVENUES............................. $ 121,460 $ 108,532 $ $ 229,992
OPERATING EXPENSES................... 79,027 70,242 (1,359)(a) 147,910
DEPRECIATION AND
AMORTIZATION....................... 8,146 5,789 247 (b) 14,182
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES........................... 12,927 20,794 -- 33,721
------------- ----------- ------------ ----------
INCOME FROM OPERATIONS............... 21,360 11,707 1,112 34,179
INTEREST (INCOME) EXPENSE,
net................................ 3,517 1,450 (4,189)(c) 778
OTHER (INCOME) EXPENSE, net.......... 38 (398) -- (360)
------------- ----------- ------------ ----------
INCOME BEFORE PROVISION FOR INCOME
TAXES.............................. 17,805 10,655 5,301 33,761
PROVISION FOR INCOME
TAXES.............................. 7,033 70 6,739 (d) 13,842
------------- ----------- ------------ ----------
NET INCOME........................... $ 10,772 $ 10,585 $ (1,438) $ 19,919
============= =========== ============ ==========
BASIC EARNINGS PER COMMON SHARE...... $ 1.27
==========
DILUTED EARNINGS PER COMMON AND
COMMON EQUIVALENT SHARE............ $ 1.17
==========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING........................ 15,714
==========
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING...... 17,081
==========
</TABLE>
The accompanying notes are an integral part of this pro forma financial
statement.
F-5
<PAGE>
U S LIQUIDS INC.
NOTES TO PRO FORMA STATEMENTS OF OPERATIONS (UNAUDITED)
(a) Adjusts compensation expense to the level the previous owners of the
Acquired Companies have agreed to receive as employees of the Company
subsequent to their respective acquisitions. In addition, for certain of
the Acquired Companies, salaries and related expenses previously recorded
as selling, general and administrative expenses have been reclassified as
operating expenses consistent with the Company's accounting policies.
(b) Adjusts depreciation and amortization expenses to reflect purchase price
allocations with respect to the Acquired Companies.
(c) Records interest expense on the debt incurred to effect the acquisition of
the Acquired Companies, net of a reduction in interest expense on debt
repaid in connection with the acquisitions, our public offering in June
1998 and our public offering in March 1999.
(d) Reflects the incremental provision for federal income taxes on the Acquired
Companies previously taxed as S corporations or limited liability companies
as well as federal and state income taxes relating to the pro forma
adjustments.
(e) Includes (1) 10,316,739 shares outstanding for the year ended December 31,
1998, and (2) 5,397,190 shares for the year ended December 31, 1998 issued
in connection with the acquisition of the Acquired Companies, our June
1998 public offering and our March 1999 public offering,as if each had
occurred on January 1, 1998.
(f) Includes 1,367,336 shares for the year ended December 31, 1998,
representing the effect of outstanding warrants and options to purchase
common stock, using the treasury stock method. Excludes 125,000 shares
issuable pursuant to options, the vesting of which is contingent upon the
successful completion of certain corporate development activities.
F-6
<PAGE>
You should rely only on the information contained in this document or that we
have referred to you. We have not authorized anyone to provide you with
different information. You should not assume that the information in this
prospectus is accurate as of any date other than the date on the front of the
document.
-----------
TABLE OF CONTENTS
PAGE
About this Prospectus.....................................................2
Incorporation of Certain Documents by
Reference...............................................................2
Available Information.................................................. 3
The Company............................................................ 3
Risk Factors........................................................... 5
Resales of Shares..................................................... 10
Use of Proceeds....................................................... 11
Price Range of Common Stock and Dividend
Policy............................................................. 12
Legal Matters........................................................ 12
Experts.............................................................. 12
Index to Financial Statements...........................................F-1
=======================================
=====================================
U S LIQUIDS INC.
5,020,161 Shares of
Common Stock
----------------------
Prospectus
---------------------
__________, 1999
=======================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Certificate of Incorporation contains a provision which
limits, to the fullest extent permitted by Delaware law, the liability of a
director to the Company or its stockholders from monetary damages for a breach
of such director's fiduciary duty as a director. Delaware law presently permits
such limitation of a director's liability except where a director (i) breaches
his or her duty of loyalty to the Company or its stockholders, (ii) fails to act
in good faith or engages in intentional misconduct or a knowing violation of
law, (iii) authorizes payment of an unlawful dividend or stock repurchase, or
(iv) obtains an improper personal benefit.
The Company's Certificate of Incorporation also provides that directors
and officers shall be indemnified against liabilities arising from their service
as directors or officers to the fullest extent permitted by law, which generally
requires that the individual act in good faith and in a manner he or she
reasonably believes to be in or not opposed to the Company's best interests. The
Company has obtained directors and officers liability insurance to limit its
exposure under these provisions.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
EXHIBIT
NO. DESCRIPTION
--- -----------
4.1 -- Form of Certificate Evidencing Ownership of Common Stock of
U S Liquids Inc. (Exhibit 4.1 of the U S Liquids Inc.
Registration Statement on Form S-1 (File No. 333-30065),
effective August 19, 1997, is hereby incorporated by
reference).
4.2 -- Second Amended and Restated Credit Agreement, dated
February 3, 1999, among U S Liquids Inc., various financial
institutions and Bank of America National Trust and Savings
Association, as Agent. (Exhibit 4.2 of U S Liquids Inc.
Registration Statement on Form S-3 (File No. 333-72403),
effective March 11, 1999, is hereby incorporated by
reference).
4.3 -- Security Agreement, dated December 17, 1997, executed by
U S Liquids Inc. and its subsidiaries in favor of Bank of
America National Trust and Savings Association. (Exhibit
4.6 of the Form 10-K for the year ended December 31, 1997
is hereby incorporated by reference).
4.4 -- Company Pledge Agreement, dated December 17, 1997, executed
by U S Liquids Inc. in favor of Bank of America National
Trust and Savings Association. (Exhibit 4.7 of the Form
10-K for the year ended December 31, 1997 is hereby
incorporated by reference).
+5.1 -- Opinion of Hartzog Conger & Cason.
+23.1 -- Consent of Arthur Andersen LLP.
23.2 -- Consent of Hartzog Conger & Cason (contained in Exhibit
5.1)
+24.1 -- Power of Attorney (included on signature page).
+27.1 -- Financial Data Schedule.
- --------------------------------
+ Filed herewith.
(b) All schedules for which provision is made in the applicable accounting
regulations of the Commission are not required under the related instructions,
are inapplicable, or the information is included in the consolidated financial
statements, and therefore have been omitted.
(c) None.
ITEM 22. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are made,
a post-effective amendment to this registration statement:
II-1
<PAGE>
(i) to include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement
(or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
registration statement; and
(iii) 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 of 1933, 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.
(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.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
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.
The undersigned registrant hereby undertakes as follows: that prior to any
public reoffering of the securities registered hereunder through the use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reoffering by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
The registration undertakes that every prospectus (i) that is filed
pursuant to the immediately preceding paragraph, or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Securities Act of 1933 and is used
in connection with an offering of securities subject to Rule 415, will be filed
as a part of an amendment to the registration statement and will not be used
until such amendment is effective, and that, for purposes of determining any
liability under the Securities Act of 1933, 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.
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 foregoing provisions, 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 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.
(b) The undersigned registrant hereby undertakes to respond to requests
for information that is incorporated by reference into the prospectus pursuant
to Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
II-2
<PAGE>
(c) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, U S Liquids
Inc. has duly caused this registration statement or amendment thereto to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Houston, State of Texas, on March 29, 1999.
U S LIQUIDS INC.
By: /s/ MICHAEL P. LAWLOR
Michael P. Lawlor
CHIEF EXECUTIVE OFFICER
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
each of Gary J. Van Rooyan and Earl J. Blackwell with full power to act without
the other, his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities (until revoked in writing) to sign any and all amendments
(including post-effective amendments) to this Registration Statement, to file
the same, together with all exhibits thereto and other documents in connection
therewith, with the SEC, to sign any and all applications, registration
statements, notices and other documents necessary or advisable to comply with
the applicable state securities laws, and to file the same, together with all
other documents in connection therewith, with the appropriate state securities
authorities, granting unto said attorneys-in-fact and agents or any of them or
their or his substitutes or substitute, with full power and authority to perform
and do each and every act and thing necessary and advisable as fully to all
intents and purposes as he might or could perform and do in person, thereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his substitutes or substitute, may lawfully do or cause to be
done by virtue thereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT OR AMENDMENT THERETO HAS BEEN SIGNED BELOW BY THE
FOLLOWING PERSONS IN THE INDICATED CAPACITIES ON MARCH 29, 1999.
SIGNATURE TITLE
/s/ MICHAEL P. LAWLOR
Michael P. Lawlor Chief Executive Officer and Director
/s/ W. GREGORY ORR
W. Gregory Orr Chief Operating Officer, President and
Director
/s/ EARL J. BLACKWELL
Earl J. Blackwell Chief Financial Officer and Senior Vice
President-Finance
/s/ WILLIAM A. ROTHROCK IV
William A. Rothrock IV Director
/s/ THOMAS B. BLANTON
Thomas B. Blanton Director
/s/ ALFRED TYLER 2ND
Alfred Tyler 2nd Director
/s/ JAMES F. MCENEANEY, JR.
James F. McEneaney, Jr. Director
/s/ JOHN N. HATSOPOULOS
John N. Hatsopoulos Director
/s/ ROGER A. RAMSEY
Roger A. Ramsey Director
II-4
EXHIBIT 5.1
March 30, 1999
U S Liquids Inc.
411 N. Sam Houston Parkway East
Suite 400
Houston, TX 77060
Gentlemen:
We have acted as counsel to U S Liquids Inc., a Delaware corporation (the
"Company"), in connection with the registration under the Securities Act of
1933, as amended (the "Securities Act"), of 5,020,161 shares of Common Stock,
par value $.01, pursuant to the registration statement on Form S-4 (as amended
or supplemented, the "Registration Statement") filed with the Securities and
Exchange Commission (the "Commission") on March 30, 1999. All terms used and not
defined herein shall have the meanings set forth in the Registration Statement.
We are familiar with the Registration Statement and have reviewed the
Company's Certificate of Incorporation and Bylaws, each as amended and restated.
We have also examined such other public and corporate documents, certificates,
instruments and corporate records, and such questions of law, as we have deemed
necessary for purposes of expressing an opinion on the matters hereinafter set
forth. In our examination of documents, instruments and other papers, we have
assumed the genuineness of all signatures on original and certified documents
and the conformity to original and certified documents of all copies submitted
to us as conformed, photostatic or other copies.
On the basis of the foregoing, we are of the opinion that the 5,020,161
shares of Common Stock to be issued and sold by the Company under the
Registration Statement will, when issued in accordance with resolutions duly
adopted by the Board of Directors of the Company, be validly issued, fully paid
and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and the reference to our firm under the caption "Legal
Matters" in the prospectus constituting a part of
<PAGE>
March 30, 1999
Page 2
the Registration Statement. By giving this consent, we do not admit that we are
included within the category of persons whose consent is required under Section
7 of the Securities Act or the rules and regulations hereunder.
Very truly yours,
/s/ HARTZOG CONGER & CASON
HARTZOG CONGER & CASON
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our report dated March 22, 1999,
included in U S Liquids' Form 10-K for the year ended December 31, 1998 and Form
8-K/A filed with the SEC on February 16, 1999 and to all references to our firm
included in this registration statement.
ARTHUR ANDERSEN LLP
Houston, Texas
March 30, 1999
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<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 3,285
<SECURITIES> 0
<RECEIVABLES> 30,800
<ALLOWANCES> 1,677
<INVENTORY> 672
<CURRENT-ASSETS> 38,496
<PP&E> 96,029
<DEPRECIATION> 10,071
<TOTAL-ASSETS> 252,165
<CURRENT-LIABILITIES> 35,560
<BONDS> 64,390
0
0
<COMMON> 125
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<TOTAL-LIABILITY-AND-EQUITY> 252,165
<SALES> 0
<TOTAL-REVENUES> 121,460
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<INCOME-PRETAX> 17,805
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<DISCONTINUED> 0
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<CHANGES> 0
<NET-INCOME> 10,772
<EPS-PRIMARY> 1.04
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