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 March 31, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-5471
GLOBAL MARINE INC.
(Exact name of registrant as specified in its charter)
Delaware 95-1849298
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
777 N. Eldridge Road, Houston, Texas 77079
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 596-5100
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such 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
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: Common Stock, $.10 par
value, 167,509,087 shares outstanding as of April 30, 1996.
GLOBAL MARINE INC.
TABLE OF CONTENTS TO FORM 10-Q
QUARTER ENDED MARCH 31, 1996
Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Report of Independent Accountants
Condensed Consolidated Statement of Operations
Three Months Ended March 31, 1996, and 1995
Condensed Consolidated Balance Sheet
March 31, 1996, and December 31, 1995
Condensed Consolidated Statement of Cash Flows
Three Months Ended March 31, 1996, and 1995
Notes to Condensed Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
SIGNATURE
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders
of Global Marine Inc.
We have made a review of the condensed consolidated balance sheet
of Global Marine Inc. and subsidiaries as of March 31, 1996, and the
related condensed consolidated statements of operations and cash flows for
the three-month periods ended March 31, 1996, and 1995. These financial
statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the condensed consolidated financial statements referred to
above for them to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of December 31, 1995, and the
related consolidated statements of operations, shareholders' equity, and
cash flows for the year then ended (not presented herein); and in our report
dated February 9, 1996, we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the information set forth
in the accompanying condensed consolidated balance sheet as of December 31,
1995, is fairly stated, in all material respects, in relation to the
consolidated balance sheet from which it has been derived.
/s/ Coopers & Lybrand L.L.P.
Houston, Texas
May 8, 1996
<TABLE>
GLOBAL MARINE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in millions, except per share amounts)
<CAPTION>
Three Months Ended
March 31,
------------------
1996 1995
------ ------
Revenues:
<S> <C> <C>
Contract drilling $ 78.5 $ 56.7
Drilling management 42.2 57.0
Oil and gas 2.3 2.4
------ ------
Total revenues 123.0 116.1
------ ------
Expenses:
Contract drilling 46.4 42.5
Drilling management 41.4 52.2
Oil and gas .8 1.2
Depreciation, depletion and amortization 9.7 7.2
General and administrative 3.7 3.3
------ ------
Total operating expenses 102.0 106.4
------ ------
Operating income 21.0 9.7
------ ------
Other income (expense):
Interest expense (7.6) (7.6)
Interest capitalized - 1.6
Interest income 1.1 1.0
Other 1.1 .1
------ ------
Total other income (expense) (5.4) (4.9)
------ ------
Income before income taxes 15.6 4.8
Income tax expense .7 .3
------ ------
Net income $ 14.9 $ 4.5
====== ======
Net income per common share $ 0.09 $ 0.03
====== ======
See notes to condensed consolidated financial statements.
</TABLE>
<TABLE>
GLOBAL MARINE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollars in millions)
<CAPTION>
March 31, December 31,
1996 1995
---------- ------------
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 66.2 $ 33.2
Marketable securities 18.2 53.4
Accounts receivable, net of allowances 83.5 70.2
Costs incurred on turnkey drilling contracts in progress 9.5 8.4
Prepaid expenses 10.6 2.2
Other current assets 1.0 .9
------- -------
Total current assets 189.0 168.3
Properties:
Rigs and drilling equipment, less accumulated
depreciation of $197.3 and $189.0 at March 31,
1996 and December 31, 1995, respectively 376.3 377.9
Oil and gas properties, full cost method, less
accumulated depreciation, depletion and amortization
of $28.2 and $26.4 at March 31, 1996 and December 31,
1995, respectively 8.3 8.7
------- -------
Net properties 384.6 386.6
Other assets 7.9 8.1
------- -------
Total assets $ 581.5 $ 563.0
======= =======
See notes to condensed consolidated financial statements.
</TABLE>
<TABLE>
GLOBAL MARINE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET (Continued)
(Dollars in millions)
<CAPTION>
March 31, December 31,
1996 1995
--------- ------------
Current liabilities:
<S> <C> <C>
Accounts payable $ 31.7 $ 33.9
Accrued interest 8.4 1.2
Other accrued liabilities 13.7 17.0
------- -------
Total current liabilities 53.8 52.1
Long-term debt 225.0 225.0
Other long-term liabilities 16.6 16.9
Shareholders' equity:
Preferred stock, $0.01 par value, 10 million
shares authorized, no shares issued or outstanding - -
Common stock, $0.10 par value, 300 million shares
authorized, 167,058,700 shares and 166,458,083
shares issued and outstanding at March 31, 1996 and
December 31, 1995, respectively 16.7 16.6
Additional paid-in capital 266.9 264.8
Retained earnings (accumulated deficit) 2.5 (12.4)
------- -------
Total shareholders' equity 286.1 269.0
------- -------
Total liabilities and shareholders' equity $ 581.5 $ 563.0
======= =======
See notes to condensed consolidated financial statements.
</TABLE>
<TABLE>
GLOBAL MARINE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in millions)
<CAPTION>
Three Months Ended
March 31,
------------------
1996 1995
------ ------
Cash flows from operating activities:
<S> <C> <C>
Net income $ 14.9 $ 4.5
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion and amortization 9.7 7.2
Gain on sale of oil and gas properties (1.1) -
Increase in accounts receivable (11.1) (4.3)
(Increase) decrease in costs incurred on turnkey
drilling contracts in progress (1.1) 17.0
(Increase) decrease in other current assets (8.5) 3.4
Decrease in accounts payable (2.2) (18.8)
Increase in accrued interest 7.2 7.2
Increase (decrease) in other accrued liabilities (3.1) 4.8
Other, net - .3
------ ------
Net cash flow provided by operating activities 4.7 21.3
------ ------
Cash flows from investing activities:
Purchases of held-to-maturity securities (4.9) (23.5)
Proceeds from maturities of held-to-maturity securities 40.1 17.9
Capital expenditures (9.2) (11.9)
Proceeds from sales of properties and equipment .3 .5
------ ------
Net cash flow provided by (used in) investing activities 26.3 (17.0)
------ ------
Cash flows from financing activities:
Proceeds from exercise of employee stock options 2.0 .1
------ ------
Net cash flow provided by financing activities 2.0 .1
------ ------
Increase in cash and cash equivalents 33.0 4.4
Cash and cash equivalents at beginning of period 33.2 33.3
------ ------
Cash and cash equivalents at end of period $ 66.2 $ 37.7
====== ======
See notes to condensed consolidated financial statements.
</TABLE>
GLOBAL MARINE INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
Note 1 - General
The financial statements reflect all adjustments which are, in
the opinion of management, necessary for a fair statement of the results for
the interim periods. Such adjustments are considered to be of a normal
recurring nature unless otherwise identified.
The year-end condensed consolidated balance sheet was derived from audited
financial statements but does not include all disclosures required by generally
accepted accounting principles. Certain reclassifications were made to the
prior-year period to conform to the current-period presentation.
The term "Company" refers to Global Marine Inc. and, unless the context
otherwise requires, to the Company's consolidated subsidiaries.
Note 2 - Net Income per Share
Net income per common share was computed by dividing net income by the
weighted average number of common shares outstanding and, if dilutive, shares
contingently issuable primarily due to outstanding employee stock options.
The weighted average shares for the three months ended March 31, 1996 and
1995, were 166,817,244 and 164,642,060, respectively. Contingently issuable
shares were excluded because their effect was immaterial.
Note 3 - Offer to Purchase Senior Secured Notes
On March 15, 1996, the Company offered to purchase up to $39.3 million
principal amount of its 12-3/4% Senior Secured Notes due 1999. The terms of
the indenture governing the Senior Secured Notes require the Company to make
offers to purchase Notes in amounts equal to the sum of excess annual cash
flow and the proceeds of certain asset sales. Under the terms of the offer,
which expired on April 12, 1996, holders had the right to require the Company
to repurchase Notes for a cash purchase price equal to 100% of the principal
amount thereof plus accrued and unpaid interest. The Company was required
to pay a total of $36 thousand as a result of the purchase offer. Cash and
marketable securities totaling $39.3 million, which were previously
restricted from use for general corporate purposes, became unrestricted upon
termination of the offer.
Note 4 - Sale of Oil and Gas Properties
On March 26, 1996, the Company sold its working interest in two offshore oil
and gas properties for $2.2 million in cash, which it received on April 4, 1996.
The Company recognized a gain in the first quarter in the amount of $1.1 million
as required under the full-cost method of oil and gas accounting. Such
amount is included in other income. The terms of the indenture governing the
Senior Secured Notes restrict the use of the proceeds from the sale and,
therefore, the proceeds are not currently available for general corporate
purposes.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Operating Results
Summary
The Company reported operating income of $21.0 million for the first quarter
of 1996 compared to $9.7 million for the prior-year first quarter. The
improvement in operating results was due to higher contract drilling dayrates
and utilization and the commencement of operations in 1995 of three offshore
drilling rigs purchased in 1994, partially offset by a decrease in the number
of turnkey wells completed and lower turnkey profit margins. Data relating to
the Company's operations by business segment follows:
<TABLE>
<CAPTION>
Three Months Ended
March 31, Increase
------------------
1996 1995 (Decrease)
------ ------ ----------
(in millions)
Revenues:
<S> <C> <C> <C>
Contract drilling $ 79.8 $ 57.4 $ 22.4
Drilling management 42.8 59.3 (16.5)
Oil and gas 2.3 2.4 (0.1)
Less: Intersegment revenues (1.9) (3.0) 1.1
------ ------ ------
$123.0 $116.1 $ 6.9
====== ====== ======
Operating income:
Contract drilling $ 23.3 $ 7.8 $ 15.5
Drilling management 0.8 4.8 (4.0)
Oil and gas 0.8 0.5 0.3
Corporate expenses (3.9) (3.4) (0.5)
------ ------ ------
$ 21.0 $ 9.7 $ 11.3
====== ====== ======
</TABLE>
The Company reported net income of $14.9 million for the first quarter of
1996 as compared to $4.5 million for the first quarter of 1995.
In the U.K. sector of the North Sea, contract drilling dayrates continued to
rise in 1996, particularly for semisubmersible rigs. An oversupply of natural
gas in the North Sea's U.K. sector, however, has created uncertainty
regarding future demand for North Sea jackups. An oversupply of jackups in
the North Sea, which could result from any reduction in future demand, could put
downward pressure on dayrates and utilization rates for the Company's two jackup
drilling rigs that operate in the U.K. sector of the North Sea. Demand in
other sectors of the North Sea remains strong. Offshore West Africa and in
the U.S. Gulf of Mexico, industry utilization and dayrates have remained
firm or increased since the end of 1995.
Contract Drilling Operations
Data with respect to the Company's contract drilling operations
follows:
<TABLE>
<CAPTION>
Three Months Ended
March 31, Increase
------------------
1996 1995 (Decrease)
------ ------
Contract drilling revenues by area (in millions): (1)
<S> <C> <C> <C>
Gulf of Mexico $29.3 $28.6 $ 0.7
North Sea 21.3 8.9 12.4
West Africa 21.2 10.3 10.9
Other 8.0 9.6 (1.6)
----- ----- ------
$79.8 $57.4 $22.4
===== ===== ======
Average rig utilization (2) 100% 96%
Fleet average dayrate $32,400 $27,300
- ------------------------
(1) Includes revenues earned from affiliates.
(2) Excludes the Company's Concrete Island Drilling System, a currently
inactive, special-purpose mobile offshore rig designed for arctic
operations.
</TABLE>
Of the $22.4 million increase in contract drilling revenues for the first
quarter of 1996 compared to the first quarter of 1995, $10.6 million was
attributable to increases in dayrates, $9.4 million was attributable
to increases in utilization and $2.4 million was attributable to an increase
in non-dayrate revenue. On a regional basis, revenues from the North Sea
increased by $12.4 million due to higher dayrates and to the commencement of
operations in 1995 of a jackup rig, the Glomar Adriatic XI. The $10.9 million
increase in revenues attributable to offshore West Africa was primarily the
result of higher utilization and the commencement of operations in 1995 of two
jackups, the Glomar Adriatic IX and the Glomar Adriatic X. The $1.6 million
decline in revenues in the "other" category was primarily due to the sale of the
Glomar Main Pass III jackup in the second quarter of 1995.
The Company's operating profit margin for contract drilling operations for
the first quarter of 1996 increased to 29 percent from 14 percent in the first
quarter of 1995 due to higher dayrates and utilization. Cash operating
expenses and depreciation increased by $4.5 million and $2.4 million,
respectively, primarily due to the 1995 commencement of operations of the
Glomar Adriatic IX, Glomar Adriatic X and Glomar Adriatic XI.
Industry demand in the U.S. Gulf of Mexico has risen since the second quarter of
1995 primarily due to improved seismic and drilling technologies, which have
lowered the finding costs of oil and gas, and to higher natural gas prices.
In the Gulf of Mexico, average drilling industry demand increased to 145 rigs
under contract (82 percent utilization) for the quarter ended March 31, 1996,
from 144 rigs (81 percent utilization) for the quarter ended December 31, 1995.
For the first quarter of 1995, an average of 122 Gulf rigs were under contract
(68 percent utilization). In December 1996, the Company expects to mobilize
a semisubmersible rig, the Glomar Arctic I, from the North Sea to the U.S.
Gulf of Mexico where it will begin drilling for a customer under an 18-month
contract in January 1997. The cost of the mobilization will be substantially
reimbursed by the customer. As of May 10, 1996, the Company's eleven rigs in
the Gulf of Mexico, all of which are jackups, were all under contract. The
Company's average utilization rate for its rigs in the Gulf of Mexico in
the first quarter of 1996 was 100 percent.
In the U.K. sector of the North Sea, promising oil discoveries west of the
Shetland Islands, lower tax rates and higher oil prices, among other factors,
have resulted in higher North Sea dayrates, particularly for semisubmersible
rigs. However, an oversupply of natural gas in the U.K. sector of the North
Sea has caused some gas drilling programs to be delayed and has created
uncertainty over future demand for North Sea jackups. Demand in the Dutch
sector, however, has remained strong. An oversupply of jackups in the North
Sea, which could result from any reduction in future demand, could put downward
pressure on dayrates and utilization rates for the Company's two jackups
currently operating there. In the North Sea, an industry average of 76 rigs
were under contract (90 percent utilization) for the quarter ended March 31,
1996, as compared to 76 rigs (94 percent utilization) for the quarter ended
December 31, 1995. The utilization rate declined due to an increase in
the supply of rigs in the region. In the first quarter of 1995, an industry
average of 63 North Sea rigs were under contract (80 percent utilization).
As of May 10, 1996, the Company's four rigs in the North Sea, two of which
are jackups and two of which are semisubmersibles, were all under contract or
letter of intent. The Company's average utilization rate for its rigs in the
North Sea in the first quarter of 1996 was 100 percent.
Offshore West Africa, average industry demand increased to 38 rigs under
contract (87 percent utilization) for the quarter ended March 31, 1996, from 35
rigs (87 percent utilization) for the quarter ended December 31, 1995. For the
first quarter of 1995, an industry average of 29 rigs were under contract
(83 percent utilization). In February 1996, the Company mobilized the Glomar
High Island III jackup from the U.S. Gulf of Mexico to Angola where it began
drilling for a customer in March. Two more rigs, the Glomar R.F. Bauer
drillship and the Glomar Adriatic V jackup, are scheduled to mobilize to West
Africa in the second quarter of 1996 from Yemen and Abu Dhabi, respectively.
The cost of the mobilizations were or will be substantially reimbursed by the
customers. As of May 10, 1996, the Company's eight rigs located offshore West
Africa, all which are jackups, were all under contract. The Company's average
utilization rate for its rigs in West Africa in the first quarter of 1996 was
100 percent.
The Company anticipates that contracts on 20 of the Company's 26 rigs under
contract or letter of intent as of May 10, 1996, will expire at varying times
on or prior to August 31, 1996. No assurance can be made that the Company will
obtain drilling contracts for its rigs upon the completion of current contracts;
however, short-term contracts have been typical in the industry for the past
decade, and the Company considers its upcoming contract expirations typical of
prevailing market conditions and consistent with the normal course of business.
Drilling Management Services
For the first quarter of 1996, the Company's results from drilling management
services were negatively affected by a shortage of available rigs, which
delayed the drilling of several wells, and by losses incurred on two wells.
As a result, drilling management revenues declined by $16.5 million to $42.8
million in the first quarter of 1996 from $59.3 million in the first quarter
of 1995, and operating income decreased by $4.0 million to $0.8 million in the
first quarter of 1996 from $4.8 million in the first quarter of 1995. The
$16.5 million decline in revenues for the quarter consisted of a $13.5 million
decrease attributable to a decrease in the number of wells drilled, from 18
in the first quarter of 1995 to 13 in the first quarter of 1996, and a $9.2
million decrease attributable to lower average turnkey revenues per well, due in
part to a more competitive pricing policy. Such decreases in revenue were
partially offset by a $6.2 million increase in revenues primarily from
consulting services.
Operating income from drilling management services expressed as a percentage
of drilling management revenues declined to 2 percent for the first quarter of
1996 from 8 percent for the first quarter of 1995. Two wells in the first
quarter of 1996 incurred losses aggregating $1.5 million, compared to a $0.2
million loss on one well in the first quarter of 1995.
Results of operations from drilling management services may be limited by
certain factors, in particular, the ability of the Company to obtain and
successfully perform turnkey drilling contracts based on competitive bids,
which in turn is largely dependent on the number of such contracts available for
bid, and the availability of rigs. Accordingly, results from the Company's
drilling management service operations may vary widely from quarter to quarter
and from year to year. To minimize the risk of not having a rig available for
a turnkey job, the Company has entered into variable-term charter agreements
to secure the ongoing use of nine rigs in the Gulf of Mexico at market rates.
Oil and Gas Operations
Oil and gas revenues of $2.3 million for the first quarter of 1996 were lower
than the comparable prior-year period by $0.1 million, and operating income of
$0.8 million was higher than the comparable prior-year period by $0.3 million.
The decrease in revenues was primarily due to lower volumes of gas produced
partially offset by higher gas and oil prices. The increase in operating income
was attributable to lower overhead costs.
Other Income and Expense
Interest capitalized declined by $1.6 million due to the 1995 completion of the
refurbishments of the Glomar Adriatic IX, Glomar Adriatic X, and Glomar Adriatic
XI.
The Company recognized a gain of $1.1 million on the sale of two oil and gas
properties in the first quarter of 1996 (see note 4 to financial statements).
For the first quarters of 1996 and 1995, the provision for income taxes was
not significant due to the utilization of net operating loss carryforwards for
U.S. federal income tax purposes. For the two periods, income tax expense
primarily consisted of income taxes applicable to foreign countries in which
the Company had no loss carryforwards.
In October 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based
Compensation," which sets forth accounting and disclosure requirements for
stock-based compensation arrangements. The new statement encourages, but
does not require, companies to measure stock-based compensation cost using a
fair-value method, rather than the intrinsic-value method prescribed by
Accounting Principles Board ("APB") Opinion No. 25. Companies choosing to
continue to measure stock-based compensation using the intrinsic-value
method must disclose on a pro forma basis net income and net income per
share as if the fair-value method were used. The Company elected to adopt
the disclosure requirements of SFAS No. 123 and to continue to measure
stock-based compensation cost using the intrinsic-value approach prescribed
by APB Opinion No. 25.
Liquidity and Capital Resources
Capitalized words in the following discussion that are not defined herein are
defined in the Company's Annual Report on Form 10-K for the year ended December
31, 1995.
For the three months ended March 31, 1996, cash flow provided by operating
activities was $4.7 million, and proceeds from maturities of marketable
securities (net of purchases) totaled $35.2 million. From the $39.9 million sum
of cash flow from operations and proceeds from maturities of marketable
securities, $9.2 million was used for capital expenditures. For the
comparable prior-year period, cash flow provided by operating activities totaled
$21.3 million of which $11.9 million and $5.6 million were used for capital
expenditures and purchases of marketable securities (net of maturities),
respectively.
Capital expenditures for the full year 1996 are anticipated to be $34 million,
principally for improvements to the Company's drilling fleet.
As of March 31, 1996, the Company had $84.4 million in cash, cash equivalents
and marketable securities, including $41.0 million which was restricted from use
for general corporate purposes. In April 1996, $39.3 million of the $41.0
million restricted amount became unrestricted upon termination of the Company's
debt repurchase offer (see note 3 to financial statements). As of December 31,
1995, the Company had $86.6 million in cash and marketable securities,
including restricted amounts of $42.1 million.
The Company believes that it will be able to meet all of its current
obligations, including capital expenditures and debt service, from its cash flow
from operations and its cash, cash equivalents and marketable securities.
As part of upgrading and expanding its rig fleet and other assets, the
Company considers and pursues the acquisition of suitable additional rigs and
other assets on an ongoing basis. If the Company decides to undertake an
acquisition, the issuance of additional shares of stock or additional debt
could be required. The Company may also consider the disposition of rigs and
other assets if and when a disposition can be effected on favorable terms.
Disposition proceeds, to the extent available, could also be used as a source
of acquisition financings.
Effective March 15, 1996, the Company acquired from K/S Rasmussen Offshore
A/S an option to purchase an offshore drilling unit, the Polycastle, for $60
million in cash. The option was acquired for an amount of up to $0.9 million.
Currently the rig is outfitted for use as an accommodations unit. The
Company intends to complete the purchase of the rig if a suitable
long-term contract for the rig can be entered into or if the purchase is
otherwise justified by market conditions. If the rig is acquired, the
Company expects to take delivery in the third or fourth quarter of 1996.
Additional expenditures of up to approximately $110 million over a period of
about twelve months would be required to outfit the rig for drilling
operations.
In April 1995, the Company filed with the Securities and Exchange Commission
a registration statement on Form S-3 for the proposed offering from time to time
of (i) debt securities, which may be subordinated to other indebtedness of the
Company, (ii) shares of preferred stock, $.01 par value per share, and/or
(iii) shares of common stock, $.10 par value per share, for an aggregate initial
public offering price not to exceed $75 million. Any net proceeds from the
sale of offered securities would be used for general corporate purposes which
may include, but are not limited to, capital expenditures and the financing
of acquisitions. The registration statement was declared effective by the
Commission in June 1995. The Company has not yet offered for sale or sold any
securities under the registration statement.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
15.1 Letter of Independent Accountants regarding Awareness of
Incorporation by Reference.
27.1 Financial Data Schedule. (Exhibit 27.1 is being submitted as an
exhibit only in the electronic format of this Quarterly Report on
Form 10-Q being submitted to the Securities and Exchange
Commission. Exhibit 27.1 shall not be deemed filed for purposes of
Section 11 of the Securities Act of 1933, Section 18 of the
Securities Exchange Act of 1934 or Section 323 of the Trust Indenture
Act, or otherwise be subject to the liabilities of such sections, nor
shall it be deemed a part of any registration statement to which it
relates.)
(b) Reports on Form 8-K
The Company did not file any Current Reports on Form 8-K during
the first quarter of 1996.
SIGNATURE
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.
GLOBAL MARINE INC.
(Registrant)
Dated: May 10, 1996 /s/ Thomas R. Johnson
--------------------------------------------
Thomas R. Johnson
Vice President and Corporate Controller
(Duly Authorized Officer and Principal
Accounting Officer of the Registrant)
EXHIBIT 99
INDEX TO EXHIBITS
15.1 Letter of Independent Accountants regarding Awareness of
Incorporation by Reference.
27.1 Financial Data Schedule. (Exhibit 27.1 is being
submitted as an exhibit only in the electronic
format of this Quarterly Report on Form 10-Q being
submitted to the Securities and Exchange Commission.
Exhibit 27.1 shall not be deemed filed for purposes of
Section 11 of the Securities Act of 1933, Section 18 of
the Securities Exchange Act of 1934 or Section 323 of
the Trust Indenture Act, or otherwise be subject to the
liabilities of such sections, nor shall it be deemed
a part of any registration statement to which it
relates.)
EXHIBIT 15.1
ACCOUNTANTS' AWARENESS LETTER
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Global Marine Inc.
Registration Statements
We are aware that our report dated May 8, 1996, on our review of
the condensed consolidated interim financial information of
Global Marine Inc. and subsidiaries for the three months ended
March 31, 1996, and included in this Quarterly Report on Form
10-Q is incorporated by reference in (i) the prospectus
constituting part of the Company's Registration Statements on
Form S-8 (Registration Nos. 33-32088, 33-40961, and 33-63326),
respectively, for the Global Marine Inc. 1989 Stock Option and
Incentive Plan, (ii) the prospectus constituting part of the
Company's Registration Statement on Form S-8 (Registration
No. 33-40266) for the Global Marine Savings Incentive Plan, (iii)
the prospectus constituting part of the Company's Registration
Statement on Form S-8 (Registration No. 33-40961) for the Global
Marine Inc. 1990 Non-Employee Director Stock Option Plan, (iv)
the prospectus constituting part of the Company's Registration
Statement on Form S-8 (Registration No. 33-57691) for the Global
Marine Inc. 1994 Non-Employee Stock Option and Incentive Plan and
(v) the prospectus constituting part of the Company's
Registration Statement on Form S-3 (Registration No. 33-58577)
for the proposed offering of up to $75,000,000 of debt
securities, preferred stock and/or common stock. Pursuant to
Rule 436 (c) under the Securities Act of 1933, this report should
not be considered a part of any of said registration statements
prepared or certified by us within the meaning of Sections 7 and
11 of that Act.
Houston, Texas /s/ Coopers & Lybrand L.L.P.
May 8, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
condensed consolidated balance sheet of Global Marine Inc. and subsidiaries as
of 3-31-96 and the related condensed consolidated statement of operations for
the three months ended 3-31-96, 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> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 66,200
<SECURITIES> 18,200
<RECEIVABLES> 84,600
<ALLOWANCES> 1,100
<INVENTORY> 0
<CURRENT-ASSETS> 189,000
<PP&E> 610,100
<DEPRECIATION> 225,500
<TOTAL-ASSETS> 581,500
<CURRENT-LIABILITIES> 53,800
<BONDS> 225,000
0
0
<COMMON> 16,700
<OTHER-SE> 269,400
<TOTAL-LIABILITY-AND-EQUITY> 581,500
<SALES> 2,300
<TOTAL-REVENUES> 123,000
<CGS> 1,500
<TOTAL-COSTS> 98,300
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,600
<INCOME-PRETAX> 15,600
<INCOME-TAX> 700
<INCOME-CONTINUING> 14,900
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14,900
<EPS-PRIMARY> .09
<EPS-DILUTED> 0
</TABLE>
