<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 7, 1996
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
- -----------------------------------------------------------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
- -----------------------------------------------------------------------------
SEACOR HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3542736
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
11200 WESTHEIMER, SUITE 850
HOUSTON, TEXAS 77042
(713) 782-5990
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
MR. CHARLES FABRIKANT
CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER
SEACOR HOLDINGS, INC.
1370 AVENUE OF THE AMERICAS, 25TH FLOOR
NEW YORK, NEW YORK 10019
(212) 307-6633
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPIES TO:
DAVID E. ZELTNER, ESQ. JOHN T. GAFFNEY, ESQ.
WEIL, GOTSHAL & MANGES LLP CRAVATH, SWAINE & MOORE
767 FIFTH AVENUE WORLDWIDE PLAZA
NEW YORK, NEW YORK 10153 825 EIGHTH AVENUE
(212) 310-8000 NEW YORK, NEW YORK 10019-7475
(212) 474-1000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
CALCULATION OF REGISTRATION FEE
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF PROPOSED MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO AMOUNT TO BE OFFERING PRICE OFFERING REGISTRATION
BE REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) FEE(3)
- ---------------------------- -------------- ---------------- ---------------- --------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 1,834,613 $47.875 $87,832,097.38 $30,286.93
- ---------------------------- -------------- ---------------- ---------------- --------------
</TABLE>
- -----------------------------------------------------------------------------
(1) Includes 239,297 shares subject to purchase by the Underwriters to
cover over-allotments, if any. See "Underwriting."
(2) Estimated solely for the purpose of calculating the registration fee.
(3) The registration fee for the Common Stock being registered hereby,
$30,286.93, has been calculated pursuant to Section 6(b) of, and Rule
457(c) under, the Securities Act of 1933, as amended (the "Securities
Act"), as follows: 1/29 th of 1% of the product of: (x) $47.875, the
average of the high and low sale prices of a share of the Common Stock
as reported in the Nasdaq National Market on June 6, 1996, and (y)
1,834,613, the maximum number of shares of Common Stock to be offered
to the public (including for this purpose, 239,297 shares of Common
Stock issuable upon exercise, in full, of the Underwriters'
over-allotment option).
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such State.
SUBJECT TO COMPLETION, DATED JUNE 7, 1996
1,595,316 Shares
[COMPANY LOGO]
SEACOR Holdings, Inc.
Common Stock
($.01 par value)
Of the 1,595,316 shares of common stock, $.01 par value per share (the
"Common Stock"), of SEACOR Holdings, Inc. (the "Company") being offered
hereby, 750,000 shares are being issued and sold by the Company and 845,316
shares are being sold by certain stockholders of the Company named herein
(the "Selling Stockholders"). The Company will not receive any of the net
proceeds from the sale of shares by the Selling Stockholders. See "Use of
Proceeds" and "Selling Stockholders."
The Common Stock is traded on the Nasdaq National Market under the symbol
"CKOR." On June 6, 1996, the last reported sale price of the Common Stock was
$47.75 per share.
See "Price Range of Common Stock."
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION
WITH AN INVESTMENT IN THE COMMON STOCK, SEE "RISK FACTORS" BEGINNING ON PAGE
11 HEREIN.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
UNDERWRITING PROCEEDS TO
DISCOUNTS AND PROCEEDS TO SELLING
PRICE TO PUBLIC COMMISSIONS COMPANY (1) STOCKHOLDERS
---------------- ----------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Per Share ..... $ $ $ $
Total (2) ..... $ $ $ $
</TABLE>
- ---------------
(1) Before deduction of expenses payable by the Company estimated at
$500,000.
(2) The Company has granted the Underwriters an option, exercisable for 30
days from the date of this Prospectus, to purchase a maximum of 239,297
additional shares to cover over-allotments of shares. If the option is
exercised in full, the total Price to Public will be $ , Underwriting
Discounts and Commissions will be $ and Proceeds to Company will be
$ .
The shares are offered by the several Underwriters when, as and if
delivered to and accepted by the Underwriters and subject to their right to
reject orders in whole or in part. It is expected that the shares will be
ready for delivery on or about , 1996, against payment in immediately
available funds.
CS First Boston
Salomon Brothers Inc
Wasserstein Perella Securities, Inc.
The date of this Prospectus is , .
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
DURING THIS OFFERING, CERTAIN PERSONS AFFILIATED WITH PERSONS PARTICIPATING
IN THE DISTRIBUTION MAY ENGAGE IN TRANSACTIONS FOR THEIR OWN ACCOUNTS OR FOR
THE ACCOUNTS OF OTHERS IN THE COMMON STOCK PURSUANT TO EXEMPTIONS FROM RULES
10B-6, 10B-7 AND 10B-8 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
(THE "EXCHANGE ACT").
IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS AND SELLING GROUP
MEMBERS AND THEIR RESPECTIVE AFFILIATES MAY ENGAGE IN PASSIVE MARKET MAKING
TRANSACTIONS IN THE COMMON STOCK ON THE NASDAQ NATIONAL MARKET IN ACCORDANCE
WITH RULE 10B-6A UNDER THE EXCHANGE ACT. SEE "UNDERWRITING."
2
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety and should be read in
conjunction with the detailed information and consolidated financial
statements, including the notes thereto, appearing elsewhere in this
Prospectus (the "Consolidated Financial Statements"). See "Glossary of
Selected Industry Terms" for definitions of certain industry terms used
herein. Unless otherwise indicated, the information in this Prospectus
assumes that the Underwriters' over-allotment option is not exercised.
THE COMPANY
The Company is a major provider of offshore marine services to the oil and
gas exploration and production industry and is one of the leading providers
of oil spill response services to owners of tank vessels and oil storage,
processing and handling facilities. The Company operates a diversified fleet
of over 250 vessels primarily dedicated to servicing offshore oil and gas
exploration and production facilities in the U.S. Gulf of Mexico, the North
Sea, offshore West Africa and Mexico. The Company's offshore service vessels
deliver cargo and personnel to offshore installations, handle anchors for
drilling rigs and other marine equipment, support offshore construction and
maintenance work and provide standby safety support. The Company also
furnishes vessels for special projects such as well stimulation, seismic data
gathering, freight hauling and line handling.
In connection with its offshore marine services, the Company on December
7, 1995 entered into a joint venture, Energy Logistics, Inc. ("ELI"), with
Baker Energy, a unit of Michael Baker Corporation, a U.S. public company. ELI
offers logistics services for the offshore industry, including the
coordination and provision of marine, air and land transportation, materials
handling and storage, inventory control and "just in time" procurement.
The Company's environmental services business principally provides
contractual oil spill response services to those who store, transport,
produce or handle petroleum and certain other non-petroleum oils as required
by the Oil Pollution Act of 1990 ("OPA 90") and various state regulations.
The Company's services, provided primarily through its wholly owned
subsidiary, National Response Corporation ("NRC"), include training for and
supervision of activities in response to oil spill emergencies and the
maintenance of specialized equipment for immediate deployment and spill
response. NRC has acted as the principal oil spill response contractor on
several of the largest oil spills that have occurred in the United States
since the enactment of OPA 90.
STRATEGY
The Company's strategy is to identify and pursue opportunities for growth,
development and integration of its offshore marine and environmental services
businesses.
OFFSHORE MARINE SERVICES. The Company seeks to pursue growth opportunities
while balancing its exposure to the cyclical nature of the oil and gas
exploration and production industry. The Company implements this strategy by
(i) diversifying geographically to enhance asset utilization and enable the
Company to take advantage of cyclical market opportunities, (ii) maintaining
a balance between long-term charters, which enhance asset utilization,
increase the predictability of cash flows and foster lasting customer
relationships, and short term charters, which provide the Company with
flexibility to take advantage of improving market conditions and
opportunities in different markets, (iii) maintaining a diversified fleet of
vessels that enables the Company to service a broad range of customer
requirements and (iv) meeting its customers' needs through efficient use of
existing vessels and logistical systems and through modifying and converting
vessels for specialized services.
ENVIRONMENTAL SERVICES. The Company seeks to expand its OPA 90 related
business and balance its exposure to the "event" driven nature of the oil
spill response business by (i) pursuing new customer relationships and
expanding the scope of its services to customers by identifying, developing
and providing services ancillary to the requirements of OPA 90, (ii)
expanding its oil spill response and
3
<PAGE>
ancillary services businesses internationally, (iii) expanding its sources of
retainer revenue by actively marketing its environmental services to vessel
owners, facilities and others who must comply with various state and federal
environmental regulations but are not subject to the requirements of OPA 90
and (iv) maintaining a highly efficient and cost-effective spill response
network by coordinating and managing existing resources and supplementing
them with a variety of purpose-built equipment.
RECENT DEVELOPMENTS
MCCALL ACQUISITION
On May 31, 1996, the Company acquired McCall Enterprises, Inc. ("McCall")
and affiliated companies (collectively, the "McCall Companies") which operate
five utility boats and 36 crew boats dedicated to serving the oil and gas
industry in the U.S. Gulf of Mexico. In consideration for such acquisition
(the "McCall Acquisition"), which was accomplished pursuant to a series of
merger and share exchange agreements involving the Company, certain
subsidiaries of the Company, the McCall Companies and the former stockholders
of the McCall Companies, the former stockholders of the McCall Companies have
rights to receive an aggregate of approximately 1.3 million shares of Common
Stock, subject to an adjustment based upon a final determination of the
McCall Companies' working capital as of May 31, 1996. Based on the closing
sale price of the Common Stock on the Nasdaq National Market on May 30, 1996,
the McCall Acquisition has a value of approximately $64.6 million, subject to
the final determination of working capital. The McCall Acquisition is
intended to qualify as a tax-free reorganization and has been accounted for
as a pooling-of-interests.
1996 CNN TRANSACTION
On June 6, 1996, the Company and Compagnie Nationale de Navigation, a
French corporation ("CNN"), entered into an agreement (the "1996 CNN
Agreement") pursuant to which the Company agreed to acquire six vessels from
CNN for an aggregate purchase price of $22,675,000 with the understanding
that three of such vessels will be bareboat chartered to CNN. The 1996 CNN
Agreement also provides for the Company to prepay certain promissory notes in
the aggregate principal amount of $9.6 million (the "Promissory Notes")
issued to CNN by a subsidiary of the Company on December 17, 1993 in
connection with the Company's acquisition on such date of certain vessels
from CNN. In addition, CNN has notified the Company of its election to
convert $4.75 million principal amount of the Company's 2.5% Convertible
Notes due July 1, 1997 (the "2.5% Notes") issued to CNN in connection with
such acquisition of vessels into 156,650 shares of Common Stock in accordance
with the terms of the 2.5% Notes. Pursuant to the 1996 CNN Agreement, the
Company agreed to include 459,948 shares of Common Stock owned by CNN on June
6, 1996 and the 156,650 additional shares of Common Stock to be issued to CNN
upon the conversion of the 2.5% Notes in this Offering for resale to the
public. The consummation of the transactions contemplated by the 1996 CNN
Agreement (collectively, the "1996 CNN Transaction") is conditioned upon the
sale of such 616,598 shares of Common Stock pursuant to this Offering and is
intended to occur substantially simultaneously with such sale.
6.0% NOTE CONVERSION
On June 6, 1996, the Company notified First Trust National Association, as
trustee (the "Trustee"), of the Company's 6.0% Convertible Subordinated Notes
due July 1, 2003 (the "6.0% Notes"), of the Company's election to call the
6.0% Notes for redemption on July 12, 1996. Holders of the 6.0% Notes have
the right to convert the 6.0% Notes into shares of Common Stock at a ratio of
39.024 shares of Common Stock per $1,000 principal amount of the 6.0% Notes
(the "6.0% Note Conversion") (representing a conversion price of $25.625 per
share) prior to the date of redemption. If the entire $55,250,000 principal
amount outstanding of the 6.0% Notes were converted, 2,156,076 shares of
Common Stock would be issued.
4
<PAGE>
1995 TRANSACTIONS
During the year ended December 31, 1995, the Company completed the
transactions set forth below (the "1995 Transactions"). This Prospectus
contains certain pro forma information which gives effect to the 1995
Transactions. See "--Summary Historical and Pro Forma Financial Information"
and "Pro Forma Financial Information."
NRC MERGER. On March 14, 1995, NRC Holdings, Inc. ("NRC Holdings"), which
was the sole stockholder of NRC at such date, was merged with and into CRN
Holdings, Inc. ("CRN"), a wholly owned subsidiary of the Company and the
owner of 42.9% of the outstanding capital stock of NRC Holdings (the "NRC
Merger"). As a result of the NRC Merger, CRN became the sole stockholder of
NRC and NRC became an indirect, wholly owned subsidiary of the Company.
GRAHAM ACQUISITION. On September 15, 1995, the Company acquired
substantially all the assets of John E. Graham & Sons and certain of its
affiliated companies for approximately $72.9 million in cash (the "Graham
Acquisition"). The purchased assets included 127 marine vessels used to
support the offshore oil and gas exploration and production industry in the
U.S. Gulf of Mexico and certain real estate, capital equipment and inventory
associated with the operation of these vessels.
COASTAL/PHIBRO TRANSACTIONS. On October 27, 1995, the Company and NRC
amended certain existing agreements with Coastal Refining & Marketing, Inc.
("Coastal") and Phibro Energy USA, Inc. ("Phibro"). Those amendments provide,
among other things, for a reduction in, and subsequent elimination of,
Coastal's and Phibro's participation interests in certain operating results
of NRC, a reduction in their retainer fees payable to NRC and the elimination
of certain options held by each of them to purchase up to 20% of the fully
diluted common stock of NRC. In addition, the agreements with Coastal were
modified to provide for (i) an extension of its service agreement with NRC
for an additional three years, (ii) the private placement to Coastal of
311,357 shares of Common Stock (having a value of $7.5 million at the time of
issuance) and (iii) Coastal's agreement not to acquire more than 5.0% of the
outstanding Common Stock (the "Coastal/Phibro Transactions").
1995 CNN TRANSACTION. On November 15, 1995, the Company acquired three
towing supply vessels from CNN, and entered into an agreement to acquire two
anchor handling vessels and certain other assets for aggregate consideration
of $21.55 million (consisting of the issuance to CNN in a private placement
of 459,948 shares of Common Stock, and $10.25 million in cash) (the "1995 CNN
Transaction"). Pursuant to the 1995 CNN Transaction, the parties terminated
their existing pooling arrangement and agreed to manage the formerly pooled
vessels through Feronia International Shipping S.A., a French corporation
("FISH") in which the Company and CNN each own a 50% interest.
1995 COMMON STOCK OFFERING. In December 1995, the Company sold in an
underwritten public offering 1,612,500 shares of its Common Stock at $24.25
per share (the "1995 Common Stock Offering"). In conjunction with the 1995
Common Stock Offering, 1,550,000 shares of Common Stock were sold by several of
the Company's stockholders. Net proceeds to the Company of approximately $36.9
million were used to repay $31.0 million of indebtedness then outstanding under
the Company's bank credit facility with Den norske Bank A/S (the "DnB
Facility"), and the remainder has been allocated for general corporate purposes.
For certain additional information relating to the transactions described
above, see "Recent Developments."
Unless the context indicates otherwise, any reference in this Prospectus
to the "Company" refers to SEACOR Holdings, Inc. and its consolidated
subsidiaries, including NRC, and any references in this Prospectus to
"SEACOR" refer to SEACOR Holdings, Inc.
5
<PAGE>
THE OFFERING
Common Stock offered:
By the Company ........ 750,000
By the Selling
Stockholders ........... 845,316
--------
Total ................ 1,595,316
Common Stock to be
outstanding
after the Offering(1) . 10,776,243
Use of Proceeds ........ $9.6 million to prepay the remaining
aggregate principal amount of indebtedness
outstanding under the Promissory Notes
issued to CNN, $22.7 million to fund the
vessel purchases in the 1996 CNN Transaction
and the remainder for general corporate
purposes. See "Use of Proceeds."
Nasdaq National Market
symbol ................. "CKOR"
- ------------
(1) Includes (i) approximately 1,300,000 shares of Common Stock issuable
pursuant to the McCall Acquisition and (ii) 156,650 shares of Common
Stock issuable to CNN in accordance with the terms of the 2.5% Notes, but
does not include (i) 264,950 shares of Common Stock issuable upon the
exercise of outstanding options under the Company's 1992 Non-Qualified
Stock Option Plan that currently are exercisable and (ii) an aggregate
of up to 2,156,076 shares of Common Stock issuable in accordance with
the terms of the 6.0% Notes.
6
<PAGE>
SUMMARY HISTORICAL AND PRO FORMA FINANCIAL INFORMATION
The following table sets forth summary historical and pro forma financial
information for the Company at the dates and for the periods indicated. The
following data should be read in conjunction with "Pro Forma Financial
Statements," "Selected Historical Financial Information," "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the Consolidated Financial Statements and notes thereto included elsewhere in
this Prospectus. The historical consolidated results of operations for the
three months ended March 31, 1995 and 1996 are unaudited and not necessarily
indicative of the results of operations for the full year.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
-------------------------------------------------- ---------------------------------------
PRO FORMA PRO FORMA
AS ADJUSTED AS ADJUSTED
1993 1994 1995 1995(1) 1995 1996 1996(2)
----------- ----------- ----------- ------------- ----------- ------------ -------------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Operating revenue ..... $ 73,720 $ 74,366 $ 106,269 $ 177,298 $ 15,288 $ 44,075 $ 49,906
Operating expenses .... 41,718 42,066 62,913 111,388 9,267 24,779 28,528
Administrative and
general .............. 6,097 6,149 12,908 19,412 1,406 5,226 5,384
Depreciation and
amortization ......... 10,006 11,983 16,740 24,454 3,120 5,165 5,648
Operating income ...... 15,899 14,168 13,708 22,044 1,495 8,905 10,346
Net income ............ 7,410 7,906 10,226 15,376 1,407 5,593 6,238
Net income per common
share:
Assuming no
dilution(3) .......... $ 1.26 $ 1.34 $ 1.62 $ 1.20 $ 0.24 $ 0.64 $ .48
Assuming full dilution 1.21 1.24 1.44 1.17 0.24 0.56 .47
Weighted average common
shares:
Assuming no
dilution(3) .......... 5,891,135 5,912,452 6,358,685 12,875,301 5,955,169 8,730,735 12,887,276
Assuming full dilution 7,060,174 8,318,994 8,725,782 13,047,577 8,332,504 11,075,199 13,125,199
STATEMENT OF CASH FLOWS
DATA:
Cash provided by
operating activities $ 19,750 $ 17,784 $ 8,371 $ -- $ 3,627 $ 9,936 $ --
Cash provided by (used
in) investing
activities ........... (24,178) (3,108) (77,274) -- 2,673 (734) --
Cash provided by (used
in) financing
activities ........... 20,049 (5,317) 52,791 -- (3,788) (8,968) --
OTHER FINANCIAL DATA:
EBITDA(4) ............. $ 27,248 $ 28,227 $ 32,044 $ 48,184 $ 5,073 $ 14,374 $ 16,212
</TABLE>
<TABLE>
<CAPTION>
AT MARCH 31,
1996
-----------------------
PRO FORMA
AS
HISTORICAL ADJUSTED(5)
----------- -----------
<S> <C> <C>
(in thousands)
BALANCE SHEET DATA:
Cash and temporary investments .............. $24,849 $31,730
Total assets ................................ 316,171 377,424
Long-term debt (including current portion):
DnB Facility ............................... 32,000 32,000
Other senior secured debt, net of discount 8,870 2,034
6.0% Notes ................................. 55,250 --
2.5% Notes, net of discount ................ 3,913 --
Total debt .................................. 100,033 34,034
Total stockholders' equity .................. 161,919 279,723
</TABLE>
- ------------
(1) Reflects adjustments to the Company's historical results of operations
to give effect to (i) the consummation of the 1995 Transactions, the
McCall Acquisition and the 6.0% Note Conversion and (ii) the completion
of the Offering, and the application of the net proceeds therefrom, and
the completion of the 1996 CNN Transaction, in each case as if such
transactions occurred on January 1, 1995. See "Pro Forma Financial
Statements."
7
<PAGE>
(2) Reflects adjustments to the Company's historical results of operations
to give effect to (i) the consummation of the McCall Acquisition and
the 6.0% Note Conversion and (ii) the completion of the Offering, and
the application of the net proceeds therefrom, and the completion of
the 1996 CNN Transaction, in each case as if such transactions occurred
on January 1, 1996. See "Pro Forma Financial Statements."
(3) This computation is submitted in accordance with Regulation S-K Item
601(b)(11). For the periods noted, it is contrary to APB Opinion No. 15
as per footnote to paragraph 14 thereto which does not require the
inclusion of common stock equivalents in the earnings per share
calculation if the dilutive effect is less than 3%.
(4) As used herein, "EBITDA" is operating income plus depreciation and
amortization, amortization of deferred mobilization costs, which is
included in marine operating expenses, minority interest in (income)
loss of subsidiary and equity in net earnings of 50% or less owned
companies. EBITDA should not be considered by an investor as an
alternative to net income as an indicator of the Company's operating
performance or to cash flows as a measure of liquidity.
(5) Reflects adjustments to the Company's consolidated balance sheet at
March 31, 1996, to give effect to (i) the consummation of the McCall
Acquisition and the 6.0% Note Conversion and (ii) the completion of the
Offering, and the application of the net proceeds therefrom, and the
completion of the 1996 CNN Transaction, in each case as if such
transactions occurred on March 31, 1996. See "Pro Forma Financial
Statements."
8
<PAGE>
SUMMARY FLEET INFORMATION
The following table sets forth certain fleet information with respect to
the Company as of the dates indicated.
<TABLE>
<CAPTION>
AT DECEMBER 31,
---------------------- AT MARCH 31,
1993 1994 1995 1996(1)
------ ------ ------ --------------
<S> <C> <C> <C> <C>
TYPE OF VESSELS:(2)
Supply/Towing supply ............ 40 46 52 52
Anchor handling towing supply .. 8 11 10 11
Crew ............................ 3 2 41 41
Project and geophysical/Freight 9 9 9 9
Standby safety .................. 11 11 15 15
Utility/Line handling ........... 2 4 81 78
Oil spill response .............. -- -- 11 12
------ ------ ------ --------------
Total fleet .................... 73 83 219 218(3)
GEOGRAPHIC MARKET:
Domestic ........................ 36 38 166 164
Foreign:(4)
Offshore West Africa ........... 15 20 25 26
North Sea ...................... 11 11 15 15
Mexico ......................... 5 10 10 10
Other(5) ....................... 6 4 3 3
------ ------ ------ --------------
Total foreign ................. 37 45 53 54
</TABLE>
- ------------
(1) Does not include (i) the 36 crew vessels and five utility vessels
acquired by the Company on May 31, 1996 pursuant to the McCall
Acquisition and (ii) the four towing supply vessels, one anchor
handling towing supply vessel and one standby safety vessel to be
purchased by the Company pursuant to the 1996 CNN Transaction. Since
March 31, 1996, the Company has sold three utility vessels.
(2) For a general description of each of these vessel categories, see
"Glossary of Selected Industry Terms."
(3) Includes 198 vessels owned by the Company and 20 vessels that are not
Company owned. Of the 20 vessels that are not Company owned, five are
operated under pooling arrangements with Company owned vessels, 12 are
in joint ventures in which the Company has an interest and three are
bareboat chartered-in or time chartered by the Company for use in its
operations. Effective June 1, 1996, one of the Company's joint ventures
was terminated, and two vessels that participated therein were acquired
in the McCall Acquisition.
(4) Foreign vessels include those operated from foreign shore bases and
those which are used primarily in foreign operations.
(5) Includes vessels operating in the Arabian Gulf and Australia.
9
<PAGE>
SUMMARY HISTORICAL OPERATING INFORMATION
The following table sets forth certain summary operating information for
the Company during the periods indicated.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, THREE MONTHS ENDED
------------------------------ MARCH 31,
1993 1994 1995(1) 1996(2)
-------- -------- ---------- ------------------
<S> <C> <C> <C> <C>
RATES PER DAY WORKED:(3)
Supply/Towing supply ............ $3,276 $3,254 $3,198 $3,691
Anchor handling towing supply .. 5,468 5,322 4,960 5,382
Crew ............................ 1,725 1,646 1,641 1,647
Standby safety(4) ............... 5,209 4,687 4,378 4,645
Utility/Line handling ........... 2,105 2,114 1,183 1,120
Project and geophysical/Freight 3,606 3,801 4,010 4,197
-------- -------- ---------- ------------------
Overall fleet .................. 3,831 3,796 2,851(5) 2,495(5)
OVERALL UTILIZATION:(3)
Supply/Towing supply ............ 79.5% 81.6% 83.9% 97.1%
Anchor handling towing supply .. 91.5 77.2 80.1 96.6
Crew ............................ 72.1 59.4 94.7 97.4
Standby safety .................. 91.6 87.0 82.1 88.7
Utility/Line handling ........... 88.6 86.9 70.2 73.1
Project and geophysical/Freight 99.8 94.6 89.2 99.3
-------- -------- ---------- ------------------
Overall fleet .................. 85.6 83.5 81.8 86.8
</TABLE>
- ------------
(1) Includes data with respect to the 127 vessels acquired on September 15,
1995 pursuant to the Graham Acquisition.
(2) Does not include data from the 41 McCall vessels acquired pursuant to
the McCall Acquisition on May 31, 1996.
(3) Rates per day worked and overall utilization figures exclude owned
vessels that are bareboat chartered-out, pooled and joint venture
vessels, and managed/operated vessels and include vessels bareboat and
time chartered-in by the Company. Rates per day worked is the ratio of
total charter revenue to the total number of vessel days worked.
(4) Revenue for standby safety vessels is earned in British pounds sterling
( pounds sterling) and has been converted to U.S. dollars at the
weighted average exchange rate for the periods indicated. As earned in
British pound sterling, rates per day worked for the periods indicated
were pounds sterling 3,466, pounds sterling 3,083, pounds sterling
2,714 and pounds sterling 3,032, respectively.
(5) The decline in the overall fleet rates per day worked for the year
ended December 31, 1995 and for the three-month period ended March 31,
1996 was due primarily to the large number of crew and utility vessels
added to the Company's fleet from the Graham Acquisition. Crew and
utility vessels earn substantially lower rates per day worked than the
other types of vessels in the Company's fleet but also have
substantially lower costs such that management believes that the
comparative rates per day worked amount is not necessarily indicative
of operating income performance.
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RISK FACTORS
Prospective investors should consider carefully the following factors, in
addition to the other information contained or incorporated by reference in
this Prospectus.
INDUSTRY CONDITIONS
OFFSHORE MARINE SERVICES; MARKET VOLATILITY
The Company's offshore vessel operations are dependent on activity in the
offshore oil and gas exploration and production industry. The level of
exploration and development of offshore areas is affected by both short-term
and long-term trends in oil and gas prices which, in turn, are related to the
demand for petroleum products and the current availability of oil and gas
resources. The level of offshore activity also is related to local policies
that influence drilling activities. In recent years, oil and gas prices and,
therefore, the level of offshore exploration and drilling activity, have been
volatile. A significant or prolonged decline in future oil and gas prices
likely would result in reduced exploration and development of offshore areas
and a decline in the demand for offshore marine services. Such reduced
activity could have a material adverse effect on the Company's financial
condition and results of operations.
Charter rates for the Company's vessels also are dependent on the supply
of offshore marine vessels. Excess vessel capacity in the industry can result
from refurbishment of "mothballed" vessels, conversion of vessels formerly
dedicated to services other than oil support and related offshore marine
activities, and construction of new vessels. The addition of new capacity to
the worldwide offshore marine fleet would increase competition in those
markets where the Company presently operates which, in turn, could have a
material adverse effect on the Company's financial condition and results of
operations.
ENVIRONMENTAL SERVICES
The environmental response business is dependent upon the development,
interpretation and enforcement of regulations promulgated under OPA 90 and,
to a lesser extent, upon oil spill response regulations developed at the
state level. There currently is no uniformity of regulatory development or
enforcement on a federal or state level. The Company believes that it
generally benefits from increasingly stringent oil spill regulations and from
increased enforcement of such regulations (which, in each case, increases
demand for NRC's services). However, a relaxation of oil spill requirements
or decreased enforcement of such regulations could reduce demand for NRC's
services and, therefore, have a material adverse effect on the Company's
financial condition and results of operations.
NRC is a "classified" Oil Spill Removal Organization ("OSRO"). The United
States Coast Guard (the"Coast Guard") classifies OSROs based on their overall
resource capability to respond to various types and sizes of oil spills in
different operating environments such as rivers/canals, inland waters and
oceans (separated into nearshore, offshore and open ocean areas). In November
1993, shortly after the initial OSRO program guidelines were published, NRC
applied for and received an "E" classification, the highest classification
level achievable. Under the original program, NRC's "E" classification
expires in 1996 when it is due for renewal. The Coast Guard reserves the
right to review NRC's resource capability at any time based on the Company's
performance during actual response and cleanup activities and exercises and
may, under certain circumstances, amend or revoke the classification. In
September 1995, the Coast Guard proposed revised draft OSRO guidelines and
requested industry and regulatory comments. On December 28, 1995, the revised
OSRO guidelines were published. Significant revisions include
geographic-specific classifications, proof of subcontractor support and more
stringent oversight by the Coast Guard. NRC has reapplied for new
classifications under the revised guidelines. Although NRC expects to receive
an interim classification in July 1996, the Coast Guard must verify the
information in the application and there can be no assurance that NRC will
receive a final classification or a final classification equivalent to its
current classification.
RELIANCE ON SIGNIFICANT CUSTOMERS
The Company offers offshore marine services primarily to the major
integrated oil companies and large independent oil and gas exploration and
production companies. The percentage of revenues attributable to an
individual customer varies from time to time, depending on the level of oil
and gas exploration undertaken by a particular customer, the suitability of
the Company's vessels for the
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customer's projects and other factors, many of which are beyond the Company's
control. For the year ended December 31, 1995, approximately 19.5% and 14.8%
of the Company's marine operating revenues were received from Mobil Oil
Corporation and Conoco, Inc., respectively.
The Company offers its environmental and oil spill response services
primarily to the domestic and international shipping community, including dry
cargo vessel owners and owners of facilities such as refineries, pipelines,
exploration and production platforms and tank terminals. The Company
presently has approximately 325 customers and provides retainer coverage to
approximately 1,800 tank vessels, 850 barges and 350 facilities. The
Company's retainer arrangements with these customers include both short-term
contracts (one year or less) and long-term agreements, in some cases as long
as seven years. For the year ended December 31, 1995, Coastal and Phibro,
NRC's two largest customers, accounted for 28.6% of NRC's retainer revenues,
collectively.
GOVERNMENT REGULATION
Both the Company's offshore marine operations and environmental response
operations are materially affected by government regulation in the form of
international conventions, federal and state laws and regulations in
jurisdictions where the Company's vessels operate and/or are registered.
These regulations govern oil spills and other matters of environmental
protection, worker health and safety, and the manning, construction and
operation of vessels.
The Company believes that it presently is in material compliance with the
environmental laws and regulations to which the Company's operations are
subject. The Company is not a party to any pending proceeding and is unaware
of any threatened litigation or other judicial, administrative or arbitrable
environmental proceedings which, if adversely determined, would have a
material adverse effect on the financial condition or results of operations
of the Company. However, the risks of incurring substantial compliance costs
and liabilities and penalties for non-compliance are inherent in offshore
marine service operations. There can be no assurance that significant costs,
liabilities, and penalties will not be incurred by or imposed on the Company
in the future. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
OFFSHORE MARINE SERVICES
OPA 90 requires owners and operators of tank vessels and certain other oil
handling facilities to obtain certificates of financial responsibility for
potential oil spill liability. The Company currently satisfies this
requirement with respect to Company vessels required to maintain such
certificates.
ENVIRONMENTAL SERVICES
The Company's environmental services are conducted through NRC, an
indirect wholly owned subsidiary of the Company. OPA 90 regulations require
certain vessels to identify in their response plans the availability of
response resources or OSROs they will use in the event of an oil spill. NRC's
primary sources of revenue are retainer arrangements with customers for
making available its spill removal vessels and related marine equipment in
the event of a spill. Authority to implement these regulations is divided
among several regulatory agencies: the Coast Guard, the U.S. Environmental
Protection Agency, the U.S. Minerals Management Service and the Office of
Pipeline Safety. Currently, there is no uniformity of regulatory
interpretation or enforcement by these agencies. On the state level,
enforcement of analogous regulations varies from state to state. Due to this
lack of uniformity, the amount of response resources required to be made
available to the Company's customers is unclear. In addition, because
regulatory enforcement initiatives affect the demand for NRC's retainer
coverage, state and federal regulatory policies may have a material impact on
NRC's results of operations.
In addition to establishing policies which impact the demand for and value
of NRC's services, the Coast Guard, pursuant to its program for classifying
OSROs, provides classified OSROs a market advantage over non-classified
service providers. A classified OSRO provides its clients a means of
verifying that such entity has the necessary response resources available.
Revocation of such "classification" or changes in the requirements could have
a material adverse effect on the Company's financial condition or results of
operations.
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<PAGE>
In providing spill response services, NRC is subject to the Federal
responder immunity doctrine, otherwise known as the "Good Samaritan"
doctrine, which holds the Company harmless from liability for any spills that
result from the Company's response efforts, except if the Company is found to
be grossly negligent or to have engaged in willful misconduct. While most of
the U.S. states in which NRC provides service have adopted the Good Samaritan
doctrine, several states have not. In the event that NRC is determined to
have acted with gross negligence or have engaged in willful misconduct in
providing spill response services, NRC could be jointly and severally liable
with the local contractor and the responsible party for any resulting
damages. Although NRC maintains insurance coverage against such risks which
it considers adequate, there can be no assurance that such coverage
adequately will cover future claims that may arise.
OPERATING RISKS AND INSURANCE
The operation of offshore support vessels is subject to various risks,
including catastrophic marine disaster, adverse weather conditions,
mechanical failure, collision, oil and hazardous substance spills and errors
of navigation by vessel pilots, all of which represent a threat to the safety
of personnel and to the Company's vessels, cargo, equipment under tow and
other property, as well as the environment. The primary operating risks
inherent in the environmental response business are the failure to meet the
planning guidelines of federal and state statutes, or gross negligence in
providing spill response services. The occurrence of the foregoing events
either in the offshore marine services or environmental services business
could result in revenue and casualty loss, increased costs and significant
liability by the Company to third parties. The Company maintains insurance
coverage against these risks which it considers adequate and it has not in
the past experienced a loss in excess of policy limits. There can be no
assurance, however, that the Company's existing insurance coverage can be
renewed at commercially reasonable rates or that such coverage will be
adequate to cover future claims that may arise.
RELIANCE ON FOREIGN OPERATIONS
For the year ended December 31, 1995, approximately 37% of the Company's
offshore marine revenues were derived from foreign operations. The Company's
foreign offshore marine operations are subject to various risks inherent in
conducting business in foreign nations. These risks include, among others,
political instability, potential vessel seizure, nationalization of assets,
currency restrictions and exchange rate fluctuations, import-export quotas
and other forms of public and governmental regulation, all of which are
beyond the control of the Company. Although, historically, the Company's
operations have not been affected materially by such conditions or events, it
is not possible to predict whether any such conditions or events might
develop in the future. The occurrence of any one or more of such conditions
or events could have a material adverse effect on the Company's financial
condition and results of operations.
The Company currently operates 30 vessels offshore West Africa, which
primarily service the local offshore oil and gas industry. The Company's
operations offshore West Africa are highly dependent on the level of activity
in Nigeria. At this time, Nigeria, because of its domestic policies, has
become the subject of certain international sanctions, including the
suspension of development aid by the European Union and the suspension of
Nigeria from the Commonwealth of Nations. Additional sanctions may be imposed
in the future, which could include economic sanctions, such as an oil
embargo. Economic sanctions or an oil embargo would have a significant
negative impact on activity in the oil and gas industry offshore West Africa,
which in turn would have a negative impact on the Company's operations in
that area. There can be no assurance that the effects of economic sanctions
or an oil embargo with respect to Nigeria would not have a material adverse
effect on the Company's financial condition and results of operations.
CURRENCY FLUCTUATIONS
Due to its foreign operations, the Company is exposed to currency
fluctuations and exchange rate risks. To minimize the financial impact of
these risks, the Company attempts to contract the majority of its services in
U.S. dollars. However, in certain of the Company's foreign operations, the
Company collects revenues and pays expenses in local currency. For financial
statement reporting purposes these accounts are translated into U.S. dollars
at the weighted average exchange rates during the relevant period.
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<PAGE>
Because the Company conducts substantially all its operations in U.S.
dollars, to the extent the value of the U.S. dollar decreases in relation to
the value of applicable foreign currencies, such decrease potentially could
adversely affect the Company's operating revenues in foreign jurisdictions.
To date, currency fluctuations have not had a material impact on the
Company's financial condition or results of operations and the Company is not
a party to any currency hedging arrangements. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations -- General" and
Note 1 to the Consolidated Financial Statements included elsewhere in this
Prospectus.
AGE OF FLEET
As of March 31, 1996, the average age of the Company's owned offshore
marine service fleet was approximately 14 years, whereas, at such date, the
average age of the Company's environmental service response fleet was 27.6
years. NRC's vessels primarily operate in a "stand-by" mode with minimal wear
and, consequently, management does not consider age to be a reliable
indicator of the commercial viability of the vessels. The Company believes
that after an offshore supply vessel has been in service for approximately 25
years, the amount of expenditures (which typically increase with vessel age)
necessary to satisfy required marine certification standards may not be
economically justifiable. If the Company is unable to replace its vessels at
the end of their useful economic lives, the costs of new building could
materially increase the Company's capital expenditures. There can be no
assurance that the Company will be able to maintain its fleet by extending
the economic life of existing vessels or acquiring new or used vessels, or
that the Company's financial resources will be sufficient to enable it to
make capital expenditures for such purposes.
COMPETITION
Both the Company's marine and environmental segments operate in highly
competitive industries. In addition to price, service and reputation, the
principal competitive factors for offshore supply fleets include the
existence of national flag preference, operating conditions and intended use
(all of which determine the suitability of vessel types), complexity of
maintaining logistical support and the cost of transferring equipment from
one market to another. See "-- Industry Conditions -- Offshore Marine
Services; Market Volatility" for other factors and "Business --Competition."
The principal competitive factors in the environmental services business
are price, service, reputation, experience and operating capabilities. The
Company believes that the lack of uniformity of regulatory development and
enforcement on a federal and state level has created a lower barrier of entry
in several market segments which has increased the number of competitors. NRC
faces competition from the Marine Spill Response Corporation (a non-profit
corporation funded by the major integrated oil companies), other industry
cooperatives, and also from smaller contractors who target specific market
niches.
DIVIDENDS
The Company has not paid any cash dividends since its inception in
December 1989 and presently does not intend to pay any cash dividends on its
Common Stock in the future. Instead, the Company intends to retain earnings
for working capital and to finance the expansion of its business operations.
In addition, as a holding company, the Company's ability to pay any cash
dividends is dependent on the earnings and cash flows of its operating
subsidiaries and their ability to make funds available to the Company.
Pursuant to the terms of the DnB Facility, the Company is prohibited through
August 31, 1996 (the maturity date of the bridge loan portion of the DnB
Facility) from paying cash dividends in respect of the Common Stock.
LIMITATION ON FOREIGN OWNERSHIP OF COMMON STOCK
The Company is subject to the Shipping Act, 1916, as amended (the
"Shipping Act"), and the Merchant Marine Act of 1920, as amended (the "1920
Act," and collectively with the Shipping Act, the "Acts"), which govern,
among other things, the ownership and operation of vessels used to carry
cargo
14
<PAGE>
between U.S. ports. The Acts require that vessels engaged in the U.S.
coastwise trade be (i) owned by U.S. citizens and (ii) built in the United
States. For a corporation engaged in the U.S. coastwise trade to be deemed a
citizen of the U.S., (a) the corporation must be organized under the laws of
the U.S. or of a state, territory or possession thereof, (b) each of the
president or other chief executive officer and the chairman of the board of
directors of such corporation must be U.S. citizens, (c) no more than a
minority of the number of directors of such corporation necessary to
constitute a quorum for the transaction of business can be non-U.S. citizens
and (d) at least 75% of the interest in such corporation must be owned by
U.S. "Citizens" (as defined in the Acts). Should the Company fail to comply
with the U.S. citizenship requirements of the Acts, it would be prohibited
from operating its vessels in the U.S. coastwise trade during the period of
such non-compliance.
To facilitate compliance with the Acts, the Company's Certificate of
Incorporation: (i) contains provisions limiting the aggregate percentage
ownership by Foreigners of any class of the Company's capital stock
(including the Common Stock) to 22.5% of the outstanding shares of each such
class to ensure that such foreign ownership will not exceed the maximum
percentage permitted by applicable maritime law (presently 25.0%), and
authorizes the Board of Directors, under certain circumstances, to increase
the foregoing percentage to 24.0%, (ii) requires institution of a dual stock
certification system to help determine such ownership and (iii) permits the
Board of Directors to make such determinations as reasonably may be necessary
to ascertain such ownership and implement such limitations. In addition, the
Company's By-laws provide that the number of foreign directors shall not
exceed a minority of the number necessary to constitute a quorum for the
transaction of business and restrict any officer who is not a U.S. citizen
from acting in the absence or disability of the Chairman of the Board of
Directors and Chief Executive Officer and the President, all of whom must be
U.S. citizens. At March 1, 1996, approximately 6.4% of the outstanding Common
Stock was owned by Foreigners.
SHARES ELIGIBLE FOR FUTURE SALE
Sales of a substantial number of shares of Common Stock in the public
market following the Offering could adversely affect the market price for the
Common Stock. On the date of this Prospectus, there were 8,569,593 shares
outstanding. Assuming 750,000 shares are issued and sold in the Offering,
1,300,000 shares are issued in connection with the McCall Acquisition, 156,650
shares are issued pursuant to the conversion of the 2.5% Notes in the 1996 CNN
Transaction and 2,156,076 shares are issued pursuant to the conversion of the
entire principal amount of the 6.0% Notes, a total of 12,932,319 shares of
Common Stock will be outstanding. Of these, the 1,595,316 shares sold in the
Offering and the 4,962,500 shares sold in the Company's prior public
offerings will be freely transferable (except by affiliates of the Company
and subject to the restrictions on foreign ownership of the Common Stock
described above) without any restrictions thereon or further registration
under the Securities Act of 1933, as amended (the "Securities Act"). See "--
Limitation on Foreign Ownership of Common Stock." Assuming the issuances and
conversions described above, of the remaining 6,374,503 shares that will be
outstanding (the "Non-Registered Shares"), (i) approximately 1 million
Non-Registered Shares will be beneficially owned by affiliates of the Company,
as such term is defined under Rule 144 under the Securities Act ("Rule 144"),
and are subject to the volume limitations and other resale conditions imposed
by Rule 144, (ii) approximately 300,000 Non-Registered Shares will be subject
to the resale conditions imposed by Rule 144 until 1998 and (iii) approximately
1.3 million Non-Registered Shares will be subject to the resale conditions
imposed by Rule 144 until 1999. The Company believes the remaining 3,774,503
Non-Registered Shares are transferable without restrictions under Rule 144.
Certain of the Non-Registered Shares are subject to lockup agreements (see
"Underwriting") that restrict the sale of shares for a period of 120 days
from the date of this Prospectus.
Pursuant to the terms of certain investment and registration rights
agreements entered into in connection with each of the NRC Merger and the
McCall Acquisition, the Company has agreed, among other things, to provide
certain demand and/or "piggyback" registration rights to facilitate the public
resale of up to an aggregate of approximately 1.6 million of the Non-Registered
Shares. See "Recent Developments."
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<PAGE>
RECENT DEVELOPMENTS
MCCALL ACQUISITION
On May 31, 1996, the Company acquired the McCall Companies which operate
five utility boats and 36 crew boats dedicated to serving the oil and gas
industry in the U.S. Gulf of Mexico. In consideration for the McCall
Acquisition, which was accomplished pursuant to a series of merger and share
exchange agreements involving the Company, certain subsidiaries of the
Company, the McCall Companies and the former stockholders of the McCall
Companies, the former stockholders of the McCall Companies have rights to
receive an aggregate of approximately 1.3 million shares of Common Stock,
subject to an adjustment based upon a final determination of the McCall
Companies' working capital as of May 31, 1996. Based on the closing sale
price of the Common Stock on the Nasdaq National Market on May 30, 1996, the
McCall Acquisition has a value of approximately $64.6 million, subject to the
final determination of working capital. The McCall Acquisition is intended to
qualify as a tax-free reorganization and has been accounted for as a
pooling-of-interests.
In addition, pursuant to a certain Investment and Registration Rights
Agreement dated May 31, 1996, the Company has agreed, under certain
circumstances, to register for resale under the Securities Act, the shares of
Common Stock issued in the McCall Acquisition. Pursuant to the McCall
Acquisition, the Company entered into employment agreements with Norman
McCall, the founder and president of McCall's Boat Rentals, Inc., and Joseph
McCall.
1996 CNN TRANSACTION
On June 6, 1996, the Company and CNN, entered into the 1996 CNN Agreement
pursuant to which the Company agreed to acquire six vessels from CNN for an
aggregate purchase price of $22,675,000, with the understanding that three of
such vessels will be bareboat chartered to CNN. The 1996 CNN Agreement also
provides for the Company to prepay the Promissory Notes issued to CNN by a
subsidiary of the Company on December 17, 1993 in connection with the
Company's acquisition on such date of certain vessels from CNN. In addition,
CNN has notified the Company of its election to convert $4.75 million
principal amount of the Company's 2.5% Notes issued to CNN in connection with
such acquisition of vessels into 156,650 shares of Common Stock in accordance
with the terms of the 2.5% Notes. Pursuant to the 1996 CNN Agreement, the
Company agreed to include 459,948 shares of Common Stock owned by CNN on June
6, 1996 and the 156,650 additional shares of Common Stock to be issued to CNN
upon the conversion of the 2.5% Notes in this Offering for resale to the
public. The 1996 CNN Transaction is conditioned upon the sale of such 616,598
shares of Common Stock pursuant to this Offering and is intended to occur
substantially simultaneously with such sale.
6.0% NOTE CONVERSION
On June 6, 1996, the Company notified the Trustee of the 6.0% Notes of its
election to call the 6.0% Notes for redemption on July 12, 1996. Holders of
the 6.0% Notes have the right to convert the 6.0% Notes into shares of Common
Stock at a ratio of 39.024 shares of Common Stock per $1,000 principal amount
of the 6.0% Notes (representing a conversion price of $25.625 per share)
prior to the date of redemption. If the entire $55,250,000 principal amount
outstanding of the 6.0% Notes were converted, 2,156,076 shares of Common
Stock would be issued.
1995 TRANSACTIONS
During the year ended December 31, 1995, the Company completed the
transactions set forth below. This Prospectus contains certain pro forma
information which gives effect to such transactions. See "Pro Forma Financial
Information."
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<PAGE>
NRC MERGER
On March 14, 1995, NRC Holdings was merged with and into CRN. Prior to the
NRC Merger, CRN owned 42.9% of NRC Holdings' outstanding common stock. As a
result of the NRC Merger, NRC (and each of its wholly owned subsidiaries)
became an indirect, wholly owned subsidiary of the Company and each share of
common stock of NRC Holdings (other than treasury shares and shares held by
CRN) outstanding immediately prior to the effective time of the NRC Merger
was converted into 2,203.7474 shares of Common Stock. Accordingly, an
aggregate of 292,965 shares of Common Stock (having a value of approximately
$5.7 million at the time of issuance) were issued to the former stockholders
of NRC Holdings. In addition, pursuant to a certain Investment and
Registration Rights Agreement dated March 14, 1995, the Company has agreed,
under certain circumstances, to register for resale under the Securities Act,
the shares of Common Stock issued in the NRC Merger.
Pursuant to the NRC Merger, the Company entered into employment agreements
with Mark Miller, as President and Chief Operating Officer of NRC, and James
Miller, as the Vice-Chairman of NRC (the "Miller Employment Agreements").
Under the terms of the Miller Employment Agreements, both Mark Miller and
James Miller receive base salaries of $250,000 per year for five years, and a
bonus determined by reference to NRC's annual net revenues from its spill
response services ("Net Spill Response Revenues") in each of 1995, 1996 and
1997, subject to certain minimum NRC revenue requirements. Mark Miller and
James Miller have an 8.2% interest and a 51% interest, respectively, in
Miller Family Holdings, Inc. ("MFHI"), and Mark Miller owns 25,926 shares of
Common Stock.
GRAHAM ACQUISITION
On September 15, 1995, the Company acquired substantially all the assets
of John E. Graham and Sons ("Graham") and certain of its affiliated companies
for approximately $72.9 million in cash. The purchased assets include 127
marine vessels used to support the offshore oil and gas exploration and
production industry in the U.S. Gulf of Mexico, and certain real estate,
capital equipment and inventory associated with the operation of these
vessels. The acquisition was financed with $74.0 million of borrowings under
the DnB Facility. Of the $74.0 million borrowed, approximately $72.9 million
was paid to Graham to acquire the assets and the balance was used to pay
approximately $1.1 million in financing and acquisition costs and to fund
working capital requirements in respect of the acquired assets. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."
COASTAL/PHIBRO TRANSACTIONS
On October 27, 1995, the Company and NRC entered into an agreement (the
"Amendments") to amend a master agreement (the "Master Agreement") and
certain service agreements with Coastal and Phibro, two founding customers of
NRC. Prior to October 27, 1995, Coastal and Phibro were parties to the Master
Agreement pursuant to which NRC had separate service agreements with each of
Coastal and Phibro. Under the Master Agreement, Coastal and Phibro each had
certain participation interests in the operating results of NRC which were
intended to reduce their respective costs incurred to comply with OPA 90. The
Master Agreement also granted each of them an option to purchase up to 20% of
the fully diluted common stock of NRC. The Master Agreement, together with
the separate service agreements, were scheduled to expire on December 31,
1998, although the options to purchase common stock of NRC continued beyond
that date. The Amendments provided for, among other things, the termination
of the Master Agreement, the cancellation of the options to purchase stock
and amendments of the separate service agreements.
In the case of Phibro, the Amendments modified the Phibro service
agreement to (i) fix the retainer fees at a lower amount for the period
January 1, 1995 through December 31, 1998, (ii) reduce its participation
interest in the operating results of NRC through December 31, 1995 and (iii)
eliminate its participation interest in the operating results of NRC
beginning January 1, 1996. In the case of Coastal, the Amendments modified
the Coastal service agreement to (i) extend the expiration date of the
service agreement to December 31, 2001 (subject to Coastal's right to extend
the agreement for an additional
17
<PAGE>
five-year period), (ii) fix the retainer fee at a lower amount for the period
January 1, 1995 through December 31, 1999 and thereafter, such fee is to be
adjusted based on a formula, (iii) reduce its participation interest in the
operating results of NRC through December 31, 1999, (iv) eliminate its
participation in the operating results of NRC beginning January 1, 2000, (v)
provide for the issuance to Coastal of 311,357 shares of the Common Stock
(having a value of $7.5 million at the time of issuance) and (vi) obtain
Coastal's agreement not to acquire more than 5.0% of the outstanding Common
Stock.
The shares issued to Coastal had a value of $7.5 million at the time of
issuance and are subject to a certain Investment and Registration Rights
Agreement dated October 27, 1995 whereby the Company has agreed, under
certain circumstances, commencing after April 27, 1996, to register such
shares of Common Stock for resale by Coastal under the Securities Act and, to
the extent that Coastal does not elect to exercise its rights to have its
shares of Common Stock so registered, the Company is entitled to require such
registration. As part of the foregoing transaction, Coastal has agreed not to
sell any shares of its Common Stock until April 27, 1996 and thereafter not
to sell more than 50% of its 311,357 shares of Common Stock in any 12-month
period.
While the modifications of these agreements will likely result in lower
retainer revenue from these two customers in the future, the Company believes
that the Amendments will not have a material adverse effect on its future
operations.
1995 CNN TRANSACTION
On November 15, 1995, the Company acquired three towing supply vessels
from CNN and entered into an agreement to acquire two anchor handling vessels
and certain other assets for aggregate consideration of $21.55 million
(consisting of the issuance to CNN in a private placement of 459,948 shares
of Common Stock, and $10.25 million in cash). Pursuant to a certain
Investment and Registration Rights Agreement dated November 14, 1995, between
the Company and CNN, the Company has agreed, under certain circumstances, to
register such shares of Common Stock for resale by CNN under the Securities
Act. In addition, in connection with the acquisition of vessels described
above, an existing pooling arrangement between the Company and CNN was
terminated and FISH (a French corporation in which the Company and CNN each
will acquire a 50% interest) will manage the operation of vessels previously
operated under the pooling arrangement. See "Business -- Joint Ventures and
Pooling Arrangements -- Offshore West Africa."
1995 COMMON STOCK OFFERING
The Company sold in the 1995 Common Stock Offering 1,612,500 shares of its
Common Stock at $24.25 per share. In conjunction with the 1995 Common Stock
Offering, 1,550,000 shares of Common Stock were sold by several of the
Company's stockholders. Net proceeds to the Company of approximately $36.9
million were used to repay $31.0 million of indebtedness then outstanding
under the DnB Facility, and the remainder has been allocated for general
corporate purposes.
18
<PAGE>
USE OF PROCEEDS
The net proceeds to be received by the Company from the Offering, after
deducting underwriting discounts and commissions and other estimated expenses
payable by the Company, are $ million ($ million if the Underwriters'
over-allotment option is exercised in full). The Company intends to use $9.6
million of such net proceeds to prepay the remaining aggregate principal
amount of indebtedness outstanding under the Promissory Notes issued to CNN
and $22.7 million to fund the vessel purchases in the 1996 CNN Transaction.
The Company intends to use the remainder of the estimated net proceeds for
general corporate purposes. Pending such uses, the Company intends to invest
such funds in short-term money market instruments.
The $9.6 million aggregate outstanding principal amount of Promissory
Notes are comprised of eight promissory notes, each in the principal amount
of $1.2 million. The maturity dates and rates of interest for such promissory
notes are as follows: December 17, 1996 bearing interest at a rate of 3.75%;
December 17, 1997 bearing interest at a rate of 4.0%; December 17, 1998
bearing interest at a rate of 4.25%; December 17, 1999 bearing interest at a
rate of 4.5%; December 17, 2000 bearing interest at a rate of 4.75%; December
17, 2001 bearing interest at a rate of 5.0%; December 17, 2002 bearing
interest at a rate of 5.25%; and December 17, 2003 bearing interest at a rate
of 5.5%.
The Company will not receive any proceeds from the sale of shares of
Common Stock by the Selling Stockholders.
PRICE RANGE OF COMMON STOCK
The Common Stock is traded on the Nasdaq National Market under the trading
symbol "CKOR." The following table sets forth, for each period presented, the
high and low sale prices for the Common Stock as reported on the Nasdaq
National Market:(1)
<TABLE>
<CAPTION>
HIGH LOW
<S> <C> <C>
Fiscal 1994 (ended December 31, 1994):
First Quarter .......................... $23 1/2 $19 3/4
Second Quarter ......................... 21 3/4 17 3/4
Third Quarter .......................... 22 1/2 19 9/16
Fourth Quarter ......................... 22 9/16 19 1/2
Fiscal 1995 (ended December 31, 1995):
First Quarter .......................... $21 1/4 $18
Second Quarter ......................... 24 1/2 20 5/8
Third Quarter .......................... 24 1/2 22 3/4
Fourth Quarter ......................... 28 22 1/4
Fiscal 1996 (ending December 31, 1996):
First Quarter .......................... $37 1/4 $26 3/8
Second Quarter (through June 6, 1996) .. 51 36 1/4
</TABLE>
------------
(1) The prices set forth in this table reflect inter-dealer prices, without
any retail mark-ups, mark-downs or commissions, and may not necessarily
represent actual sale transactions.
The last reported sale price of the Common Stock, as reported by the
Nasdaq National Market on June 6, 1996, was $47.75 per share.
19
<PAGE>
CAPITALIZATION
The following table sets forth at March 31, 1996 (i) the historical
consolidated debt and equity capitalization of the Company, (ii) pro forma
adjustments to such debt and equity capitalization to give effect to
consummation of the McCall Acquisition and issuance of approximately
1,300,000 shares of Common Stock, the 1996 CNN Transaction and the issuance
of 156,650 shares of Common Stock as part of that transaction and the
issuance of 2,156,076 shares of Common Stock pursuant to the 6.0% Note
Conversion, (iii) such debt and equity capitalization adjusted to reflect the
pro forma adjustments described in clause (ii) above, and (iv) such debt and
equity capitalization adjusted to reflect the pro forma adjustments described
in clause (ii) above and the consummation of the Offering and the application
of the net proceeds therefrom to the Company. The information set forth in
the table below should be read in conjunction with the Consolidated Financial
Statements and the Notes thereto included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
AT MARCH 31, 1996
-----------------------------------------------------
PRO FORMA PRO FORMA AS
ACTUAL ADJUSTMENTS PRO FORMA ADJUSTED
---------- ------------- ----------- -------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Current portion of long-term debt ............. $ 1,476 $ 156 $ 1,632 432
Long-term debt:
DnB Facility ................................. 32,000 -- 32,000 32,000
Other Senior Secured Debt, net of discount .. 7,394 1,325 8,719 1,602
6.0% Convertible Notes ....................... 55,250 (55,250) -- --
2.5% Convertible Notes, net of discount ..... 3,913 -- 3,913 --
---------- ------------- ----------- -------------
Total long-term debt ........................ 98,557 (53,925) 44,632 33,602
Minority interest and indebtedness to Minority
Shareholder .................................. 1,834 -- 1,834 1,834
Stockholders' equity:
Common stock, $.01 par value ................. 86 35 (1) 121 130 (2)
Additional paid-in capital ................... 127,326 53,728 (1) 181,054 218,480 (2)
Retained earnings ............................ 36,735 27,440 64,175 63,341
Less 55,768 shares held in treasury, at cost (576) -- (576) (576)
Less unamortized restricted stock
compensation ................................. (140) -- (140) (140)
Currency translation adjustments ............. (1,512) -- (1,512) (1,512)
---------- ------------- ----------- -------------
Total stockholders' equity .................. 161,919 81,203 243,122 279,723
---------- ------------- ----------- -------------
Total capitalization ....................... $263,786 $ 27,434 $291,220 $315,591
========== ============= =========== =============
</TABLE>
- ------------
(1) Adjustment to reflect the issuance of approximately 1,300,000 shares of
Common Stock in the McCall Acquisition and the issuance of 2,156,076
shares of Common Stock pursuant to the 6% Note Conversion.
(2) Adjusted to reflect the consummation of the Offering and the
application of a portion of the net proceeds to the Company therefrom
to repay $9.6 million of indebtedness to CNN as described in "Use of
Proceeds."
20
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
We have examined the pro forma adjustments reflecting the transactions
described in the notes to the pro forma financial statements (the "Notes")
and the application of those adjustments to the historical amounts in the
accompanying pro forma statement of income of SEACOR Holdings, Inc. and its
subsidiaries (the "Company") for the year ended December 31, 1995. The
historical consolidated financial statements are derived from the historical
consolidated financial statements of the Company and the McCall Affiliated
Companies, included herein, which were audited by us. We did not audit the
financial statements of CRN Holdings Inc. and subsidiaries, which statements
reflect total assets and total revenues of 10 percent and 20 percent,
respectively, in 1995 of the consolidated totals. Those statements were
audited by other auditors whose report has been furnished to us and our
opinion, insofar as it relates to the amounts included for those entities, is
based solely on the report of the other auditors. The historical financial
statements of NRC Holdings, Inc. and Subsidiaries, John E. Graham and Sons
and Offshore Trawlers, Inc. and Subsidiaries, incorporated by reference
herein, were audited by other accountants. The pro forma adjustments are
based upon management's assumptions described in the Notes. Our examination
was made in accordance with standards established by the American Institute
of Certified Public Accountants ("AICPA") and, accordingly, included such
procedures as we considered necessary in the circumstances.
The objective of this pro forma financial information is to show what the
significant effects on historical information might have been had the
transactions occurred at an earlier date. However, the pro forma financial
statements are not necessarily indicative of the results of operations or
related effects on financial position that would have been attained had the
above-mentioned transactions actually occurred at earlier dates.
In our opinion, management's assumptions provide a reasonable basis for
presenting the significant effects directly attributable to the
above-mentioned transactions described in the Notes, the related pro forma
adjustments give appropriate effect to those assumptions and the pro forma
column reflects the proper application of those adjustments to the historical
consolidated financial statement amounts in the pro forma statement of income
for the year ended December 31, 1995.
In addition, we have reviewed the related pro forma adjustments and the
application of those adjustments to the historical amounts in the
accompanying pro forma balance sheet of the Company at March 31, 1996, and
the related pro forma statements of income for the three months ended March
31, 1996. The historical consolidated financial statements are derived from
the unaudited historical consolidated financial statements of the Company,
which were reviewed by us. Such pro forma adjustments are based on
management's assumptions as described in the Notes. Our reviews were made in
accordance with standards established by the AICPA.
A review is substantially less in scope than an examination, the objective
of which is the expression of an opinion on management's assumptions, the pro
forma adjustments and the application of those adjustments to the historical
consolidated financial information. Accordingly, we do not express such an
opinion on the pro forma adjustments or the application of such adjustments
to the historical consolidated balance sheet of the Company at March 31, 1996
and the historical consolidated statements of income for the three months
ended March 31, 1996.
Based on our review, nothing came to our attention that caused us to
believe that management's assumptions do not provide a reasonable basis for
presenting the significant effects directly attributable to the above
mentioned transactions described in the Notes, that the related pro forma
adjustments do not give appropriate effect of those assumptions, or that the
pro forma column does not reflect the proper application of those adjustments
to the historical financial statement amounts in the pro forma balance sheet
at March 31, 1996, and the related pro forma statement of income for the
three months ended March 31, 1996.
Arthur Andersen LLP
New Orleans, Louisiana,
June 7, 1996
21
<PAGE>
PRO FORMA FINANCIAL STATEMENTS
The pro forma financial statements presented below reflect the effects of
adjustments to the Consolidated Financial Statements and notes thereto
included elsewhere in this Prospectus necessary to give pro forma effect to
the Offering and certain other transactions described below as if such
transactions had occurred at the beginning of each of the periods presented
for purposes of the pro forma statements of income and at March 31, 1996 for
purposes of the pro forma balance sheet.
The pro forma financial statements of the Company and accompanying notes
should be read in conjunction with the Consolidated Financial Statements and
notes thereto and the unaudited financial statements of the Company for the
three months ended March 31, 1996 and the Combined Financial Statements and
notes thereto and the unaudited financial statements of the McCall Affiliated
Companies for the three months ended March 31, 1996.
Management believes that the assumptions used provide a reasonable basis
on which to present the pro forma financial data. The pro forma financial
statements are provided for informational purposes only and should not be
construed to be indicative of the Company's results of operations or
financial position had the Offering and other transactions described below
been consummated on or as of the dates assumed, and are not intended to
project the Company's results of operations or its financial position for any
future period or as of any future date.
The pro forma adjustments (a) in the case of the balance sheet at March
31, 1996, give effect to consummation of the McCall Acquisition and the 6.0%
Note Conversion as if such transactions occurred on March 31, 1996, (b) in
the case of the statement of income for the year ended December 31, 1995,
give effect to consummation of the 1995 Transactions, the McCall Acquisition
and the 6.0% Note Conversion as if such transactions occurred on January 1,
1995, and (c) in the case of the statement of income for the three months
ended March 31, 1996, give effect to consummation of the McCall Acquisition
and the 6.0% Note Conversion as if such transactions occurred on January 1,
1996.
The pro forma as adjusted information adjusts the pro forma amounts to
reflect completion of the Offering and the application of the net proceeds
therefrom as described in "Use of Proceeds" and completion of the 1996 CNN
Transaction, (a) in the case of the balance sheet at March 31, 1996, as if
such transactions occurred on March 31, 1996, (b) in the case of the
statement of income for the year ended December 31, 1995, as if such
transactions occurred on January 1, 1995, and (c) in the case of the
statement of income for the three months ended March 31, 1996, as if such
transactions occurred on January 1, 1996.
22
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1996
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA ADJUSTMENTS
------------------------------ -------------------------------
6.0% NOTE
MCCALL CONVERSION
SEACOR MCCALL (NOTE B) (NOTE C)
-------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C>
ASSETS
Cash .............................. $ 24,849,000 $ 5,532,000 $ 102,000 (2) $ --
Investment securities ............. -- 923,000 -- --
Trade and other receivables ...... 36,095,000 3,461,000 642,000 (2) --
Affiliate receivables ............. 690,000 -- (294,000)(2) --
Inventories ....................... 1,610,000 -- -- --
Prepaid expenses and other ........ 1,677,000 766,000 -- --
-------------- -------------- -------------- ---------------
Total current assets ............ 64,921,000 10,682,000 450,000 --
-------------- -------------- -------------- ---------------
Investments, at equity in and
Receivables from 50% or Less
Owned Companies .................. 6,577,000 250,000 (500,000)(2) --
Property, Equipment, Land, and
Capital Leases ................... 289,645,000 48,800,000 86,000 (2) --
Less-accumulated depreciation ... (59,001,000) (21,208,000) -- --
-------------- -------------- -------------- ---------------
Net property and equipment ..... 230,644,000 27,592,000 86,000 --
-------------- -------------- -------------- ---------------
Other Assets ...................... 14,029,000 288,000 -- (1,517,000)(4)
-------------- -------------- -------------- ---------------
$316,171,000 $ 38,812,000 $ 36,000 $ (1,517,000)
============== ============== ============== ===============
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current portion of long-term debt $ 1,476,000 $ 156,000 $ -- $ --
Loans from stockholders ........... -- 1,570,000 -- --
Accounts payable -- trade ......... 7,480,000 653,000 -- --
Accounts payable -- affiliates ... 838,000 -- -- --
Other current liabilities ......... 11,637,000 1,087,000 36,000 (2) --
-------------- -------------- -------------- ---------------
Total current liabilities ...... 21,431,000 3,466,000 36,000 --
-------------- -------------- -------------- ---------------
Long-Term Debt .................... 98,557,000 1,325,000 -- (55,250,000)(4)
Deferred Income Taxes ............. 30,177,000 6,551,000 -- --
Deferred Revenue, Gain, and Other
Liabilities ...................... 2,253,000 -- -- --
Minority Interest and Indebtedness
to Minority Shareholder .......... 1,834,000 -- -- --
Stockholders' Equity:
Contributed capital .............. -- 30,000 (30,000)(1) --
Common stock ..................... 86,000 -- 13,000 (1) 22,000(4)
Additional paid-in capital ...... 127,326,000 -- 17,000 (1) 53,711,000(4)
Retained earnings ................ 36,735,000 27,742,000 (302,000)(1) --
Less -- shares held in treasury . (576,000) (302,000) 302,000 (1) --
Less unamortized restricted stock (140,000) -- -- --
Currency translation adjustments (1,512,000) -- -- --
-------------- -------------- -------------- ---------------
Total stockholders' equity ..... 161,919,000 27,470,000 -- 53,733,000
-------------- -------------- -------------- ---------------
$316,171,000 $ 38,812,000 $ 36,000 $ (1,517,000)
============== ============== ============== ===============
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
PRO FORMA AS
ADJUSTED (NOTE
PRO FORMA D)
ASSETS
<S> <C> <C>
Cash .............................. $ 30,483,000 $ 31,730,000(6)
Investment securities ............. 923,000 923,000
Trade and other receivables ...... 40,198,000 40,198,000
Affiliate receivables ............. 396,000 396,000
Inventories ....................... 1,610,000 1,610,000
Prepaid expenses and other ........ 2,443,000 2,443,000
-------------- --------------
Total current assets ............ 76,053,000 77,300,000
-------------- --------------
Investments, at equity in and
Receivables from 50% or Less
Owned Companies .................. 6,327,000 6,327,000
Property, Equipment, Land, and
Capital Leases ................... 338,531,000 361,206,000(6)
Less-accumulated depreciation ... (80,209,000) (80,209,000)
-------------- --------------
Net property and equipment ..... 258,322,000 280,997,000
-------------- --------------
Other Assets ...................... 12,800,000 12,800,000
-------------- --------------
$353,502,000 $377,424,000
============== ==============
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current portion of long-term debt $ 1,632,000 $ 432,000(6)
Loans from stockholders ........... 1,570,000 1,570,000
Accounts payable -- trade ......... 8,133,000 8,133,000
Accounts payable -- affiliates ... 838,000 838,000
Other current liabilities ......... 12,760,000 12,311,000
-------------- --------------
Total current liabilities ...... 24,933,000 23,284,000
-------------- --------------
Long-Term Debt .................... 44,632,000 33,602,000(6)
Deferred Income Taxes ............. 36,728,000 36,728,000
Deferred Revenue, Gain, and Other
Liabilities ...................... 2,253,000 2,253,000
Minority Interest and Indebtedness
to Minority Shareholder .......... 1,834,000 1,834,000
Stockholders' Equity:
Contributed capital .............. -- --
Common stock ..................... 121,000 130,000
Additional paid-in capital ...... 181,054,000 218,480,000(6)
Retained earnings ................ 64,175,000 63,341,000(9)
Less -- shares held in treasury . (576,000) (576,000)
Less unamortized restricted stock (140,000) (140,000)
Currency translation adjustments (1,512,000) (1,512,000)
-------------- --------------
Total stockholders' equity ..... 243,122,000 279,723,000
-------------- --------------
$353,502,000 $377,424,000
============== ==============
</TABLE>
23
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1996
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA ADJUSTMENTS
----------------------- --------------------------
6.0% NOTE
MCCALL CONVERSION
SEACOR MCCALL (NOTE B) (NOTE C)
----------- ---------- ------------- -----------
<S> <C> <C> <C> <C>
Operating Revenues:
Marine ................................ $37,222,000 $5,328,000 $ 503,000 (2) $ --
Environmental--
Oil spill response ................... 2,422,000 -- -- --
Retainer and other services .......... 4,431,000 -- -- --
----------- ---------- ------------- -----------
44,075,000 5,328,000 503,000 --
----------- ---------- ------------- -----------
Cost and Expenses:
Cost of Oil Spill Response ............ 2,046,000 -- -- --
Operating Expenses--
Marine ............................... 21,484,000 3,412,000 337,000 (2) --
Environmental ........................ 1,249,000 -- -- --
Administrative and general ............ 5,226,000 295,000 7,000 (2) --
(144,000)(3)
Depreciation and amortization ......... 5,165,000 535,000 -- (52,000)(5)
----------- ---------- ------------- -----------
35,170,000 4,242,000 200,000 (52,000)
----------- ---------- ------------- -----------
Operating Income ....................... 8,905,000 1,086,000 303,000 52,000
----------- ---------- ------------- -----------
Other Income (Expense):
Interest on Debt ...................... (1,759,000) (62,000) -- 829,000(5)
Interest Income ....................... 669,000 11,000 2,000 (2) --
Gain/(loss) on equipment sales or
retirements .......................... 243,000 -- -- --
Other ................................. 249,000 -- 13,000 (2) --
----------- ---------- ------------- -----------
(598,000) (51,000) 15,000 829,000
----------- ---------- ------------- -----------
Income Before Income Taxes, Minority
Interest, Equity in Net Earnings of
50% or Less Owned Companies and
Extraordinary Item .................... 8,307,000 1,035,000 318,000 881,000
Income Taxes ........................... 2,931,000 362,000 111,000 (2)(3) 308,000(5)
----------- ---------- ------------- -----------
Income Before Minority Interest, Equity
in Net Earnings of 50% or Less Owned
Companies and Extraordinary Item ..... 5,376,000 673,000 207,000 573,000
Minority Interest in (Income) Loss of a
Subsidiary ............................ 76,000 -- -- --
Equity in Net Earnings of 50% or Less
Owned Companies ....................... 141,000 57,000 (113,000)(2) --
----------- ---------- ------------- -----------
Income Before Extraordinary Item ...... 5,593,000 730,000 94,000 573,000
Extraordinary Item -- Loss on
Extinguishment of Debt ................ -- -- -- --
----------- ---------- ------------- -----------
Net Income ............................. $ 5,593,000 $ 730,000 $ 94,000 $574,000
=========== ========== ============= ===========
Earnings Per Common Share --
Assuming No Dilution
Income before extraordinary item ..... $ 0.66
Extraordinary item .................... --
-----------
Net income ............................ $ 0.66
Earnings Per Common Share --
Assuming Full Dilution
Income before extraordinary item ..... $ 0.56
Extraordinary item .................... --
-----------
Net income ............................ $ 0.56
Weighted Average Common Shares:
Assuming no dilution .................. 8,524,550
Assuming full dilution ................ 11,075,199
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
PRO FORMA
AS ADJUSTED
PRO FORMA (NOTE D)
----------- -----------
<S> <C> <C>
Operating Revenues:
Marine ................................ $43,053,000 $43,053,000
Environmental--
Oil spill response ................... 2,422,000 2,422,000
Retainer and other services .......... 4,431,000 4,431,000
----------- -----------
49,906,000 49,906,000
----------- -----------
Cost and Expenses:
Cost of Oil Spill Response ............ 2,046,000 2,046,000
Operating Expenses--
Marine ............................... 25,233,000 25,233,000
Environmental ........................ 1,249,000 1,249,000
Administrative and general ............ 5,384,000 5,384,000
Depreciation and amortization ......... 5,648,000 5,648,000
----------- -----------
39,560,000 39,560,000
----------- -----------
Operating Income ....................... 10,346,000 10,346,000
----------- -----------
Other Income (Expense):
Interest on Debt ...................... (992,000) (824,000)(7)
Interest Income ....................... 682,000 682,000
Gain/(loss) on equipment sales or
retirements .......................... 243,000 243,000
Other ................................. 262,000 262,000
----------- -----------
195,000 363,000
----------- -----------
Income Before Income Taxes, Minority
Interest, Equity in Net Earnings of
50% or Less Owned Companies and
Extraordinary Item .................... 10,541,000 10,709,000
----------- -----------
Income Taxes ........................... 3,712,000 3,771,000 (8)
----------- -----------
Income Before Minority Interest, Equity
in Net Earnings of 50% or Less Owned
Companies and Extraordinary Item ..... 6,829,000 6,938,000
Minority Interest in (Income) Loss of a
Subsidiary ............................ 76,000 76,000
Equity in Net Earnings of 50% or Less
Owned Companies ....................... 85,000 85,000
----------- -----------
Income Before Extraordinary Item ...... 6,990,000 7,099,000
Extraordinary Item -- Loss on
Extinguishment of Debt ................ -- (861,000)(9)
----------- -----------
Net Income ............................. $ 6,990,000 $ 6,238,000
=========== ===========
Earnings Per Common Share --
Assuming No Dilution
Income before extraordinary item ..... $ 0.58 $ 0.55
Extraordinary item .................... -- (0.07)
----------- -----------
Net income ............................ $ 0.58 $ 0.48
Earnings Per Common Share --
Assuming Full Dilution
Income before extraordinary item ..... $ 0.57 $ 0.54
Extraordinary item .................... -- (0.07)
----------- -----------
Net income ............................ $ 0.57 $ 0.47
Weighted Average Common Shares:
Assuming no dilution .................. 11,980,628 12,887,276
Assuming full dilution ................ 12,375,199 13,125,199
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
PRO FORMA
ADJUSTMENTS
FOR 1995
HISTORICAL TRANSACTIONS HISTORICAL
SEACOR (NOTE E) MCCALL
------------- -------------- -------------
<S> <C> <C> <C>
OPERATING REVENUES:
Marine ........................ $ 84,504,000 $45,668,000 $20,029,000
Environmental--
Oil spill response ........... 8,927,000 968,000 --
Retainer and other services . 12,838,000 4,003,000 --
------------- -------------- -------------
106,269,000 50,639,000 20,029,000
------------- -------------- -------------
Costs and Expenses:
Cost of Oil Spill Response ... 7,643,000 791,000 --
Operating Expenses--
Marine ....................... 50,690,000 31,002,000 14,982,000
Environmental ................ 4,580,000 1,167,000 --
Administrative and general ... 12,908,000 6,033,000 1,045,000
Depreciation and amortization 16,740,000 5,823,000 2,102,000
------------- -------------- -------------
92,561,000 44,816,000 18,129,000
------------- -------------- -------------
Operating Income ............... 13,708,000 5,823,000 1,900,000
------------- -------------- -------------
Other Income(Expense):
Interest on Debt .............. (6,486,000) (3,525,000) (195,000)
Interest Income ............... 2,296,000 123,000 74,000
Gain/(loss) from equipment
sales or retirements ......... 3,765,000 467,000 85,000
Other ......................... 667,000 (2,000) --
------------- -------------- -------------
242,000 (2,937,000) (36,000)
------------- -------------- -------------
Income Before Income Taxes,
Minority Interest, and Equity
in Net Earnings of 50% or Less
Owned Companies ............... 13,950,000 2,886,000 1,864,000
Income Tax Expense (Benefit) .. 4,858,000 1,035,000 712,000
------------- -------------- -------------
Income Before Minority Interest
and Equity in Net Earnings of
50% or Less Owned Companies .. 9,092,000 1,851,000 1,152,000
Minority Interest in (Income)
Loss of a Subsidiary .......... 321,000 -- --
Equity in Net Earnings of 50%
or Less Owned Companies ....... 813,000 -- (53,000)
------------- -------------- -------------
Income Before Extraordinary
Item .......................... 10,226,000 1,851,000 1,099,000
Extraordinary Item -- Loss on
Extinguishment of Debt ........ -- -- --
------------- -------------- -------------
Net Income ..................... $ 10,226,000 $ 1,851,000 $ 1,099,000
============= ============== =============
Earnings Per Common Share --
Assuming No Dilution
Income before extraordinary
item ......................... $ 1.64
Extraordinary item ............ --
-------------
Net income .................... $ 1.64
Earnings Per Common Share --
Assuming Full Dilution:
Income before extraordinary
item ......................... $ 1.44
Extraordinary item ............ --
-------------
Net income .................... $ 1.44
Weighted Average Common
Shares:
Assuming no dilution .......... 6,240,780
Assuming full dilution ........ 8,725,762
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS
-------------------------------
6.0% NOTE PRO FORMA AS
CONVERSION ADJUSTED (NOTE
MCCALL (NOTE B) (NOTE C) PRO FORMA D)
--------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
OPERATING REVENUES:
Marine ........................ $ 361,000 (2) $ -- $150,562,000 $150,562,000
Environmental--
Oil spill response ........... -- -- 9,895,000 9,895,000
Retainer and other services . -- -- 16,841,000 16,841,000
--------------- -------------- -------------- --------------
361,000 -- 177,298,000 177,298,000
--------------- -------------- -------------- --------------
Costs and Expenses:
Cost of Oil Spill Response ... -- -- 8,434,000 8,434,000
Operating Expenses--
Marine ....................... 533,000 (2) -- 97,207,000 97,207,000
Environmental ................ -- -- 5,747,000 5,747,000
Administrative and general ... (574,000)(3) -- 19,412,000 19,412,000
Depreciation and amortization -- (211,000)(5) 24,454,000 24,454,000
--------------- -------------- -------------- --------------
(41,000) (211,000) 155,254,000 155,254,000
--------------- -------------- -------------- --------------
Operating Income ............... 402,000 211,000 22,044,000 22,044,000
--------------- -------------- -------------- --------------
Other Income(Expense):
Interest on Debt .............. -- 3,330,000(5) (6,876,000) (6,158,000)(7)
Interest Income ............... -- -- 2,493,000 2,493,000
Gain/(loss) from equipment
sales or retirements ......... -- -- 4,317,000 4,317,000
Other ......................... -- -- 665,000 665,000
--------------- -------------- -------------- --------------
-- 3,330,000 599,000 1,317,000
--------------- -------------- -------------- --------------
Income Before Income Taxes,
Minority Interest, and Equity
in Net Earnings of 50% or Less
Owned Companies ............... 402,000 3,541,000 22,643,000 23,361,000
Income Tax Expense (Benefit) .. 141,000 (2)(3) 1,204,000(5) 7,950,000 8,194,000(8)
--------------- -------------- -------------- --------------
Income Before Minority Interest
and Equity in Net Earnings of
50% or Less Owned Companies .. 261,000 2,337,000 14,693,000 15,167,000
Minority Interest in (Income)
Loss of a Subsidiary .......... -- -- 321,000 321,000
Equity in Net Earnings of 50%
or Less Owned Companies ....... 112,000 (2) -- 872,000 872,000
--------------- -------------- -------------- --------------
Income Before Extraordinary
Item .......................... 373,000 2,337,000 15,886,000 16,360,000
Extraordinary Item -- Loss on
Extinguishment of Debt ........ -- -- -- (984,000)(9)
--------------- -------------- -------------- --------------
Net Income ..................... $373,000 $2,337,000 $15,886,000 $15,376,000
=============== ============== ============== ==============
Earnings Per Common Share --
Assuming No Dilution
Income before extraordinary
item ......................... $ 1.33 $ 1.28
Extraordinary item ............ -- (0.08)
-------------- --------------
Net income .................... $ 1.33 $ 1.20
Earnings Per Common Share --
Assuming Full Dilution:
Income before extraordinary
item ......................... $ 1.30 $ 1.25
Extraordinary item ............ -- (0.08)
-------------- --------------
Net income .................... $ 1.30 $ 1.17
Weighted Average Common
Shares:
Assuming no dilution .......... 11,968,851 12,875,301
Assuming full dilution ........ 12,297,577 13,047,577
</TABLE>
25
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
A. BASIS OF PRESENTATION
The accompanying pro forma condensed balance sheet has been prepared
based upon certain pro forma adjustments to historical financial
information and assuming (i) the McCall Acquisition and the 6.0% Note
Conversion and (ii) the Offering, including the application of the net
proceeds therefrom, and the 1996 CNN Transaction, in each case occurred on
March 31, 1996. No adjustments were proposed in the accompanying pro forma
condensed consolidated balance sheet for the 1995 Transactions as these
transactions were completed prior to March 31, 1996. The pro forma
condensed consolidated statements of income for the year ended December
31, 1995 and for the three months ended March 31, 1996 have been prepared
based upon certain pro forma adjustments to historical financial
information and assuming (i) the 1995 Transactions (with respect to the
1995 pro forma's only), the McCall Acquisition and the 6.0% Note
Conversion and (ii) the Offering, including the application of the net
proceeds therefrom, in each case occurred on the first date of each period
presented (January 1, 1995 and January 1, 1996, respectively). No pro
forma adjustment was made to the statements of income for the 1996 CNN
Transaction because the effect of such adjustments would not be material.
The pro forma condensed consolidated financial statements should be read
in conjunction with the historical consolidated financial statements and
notes thereto of SEACOR Holdings, Inc. and subsidiaries and the historical
combined financial statements and notes thereto of McCall Affiliated
Companies.
Weighted average numbers of shares used to calculate pro forma
consolidated earnings per share, assuming no dilution, are based on the
actual weighted average number of shares outstanding during each period,
adjusted to give effect to shares issued in connection with the McCall
Acquisition, the 6.0% Note Conversion, the 1996 CNN Transaction and the
Offering, assuming that the transactions had taken place on the first day
of each period presented. The weighted average numbers of shares used in
the calculation of earnings per share, assuming full dilution, are based
on the actual number of shares issued and outstanding during the period,
adjusted for additional shares assumed to be outstanding to reflect the
dilutive effect of common stock equivalents using the treasury stock
method, assuming that shares issued in connection with the McCall
Acquisition, the 6.0% Note Conversion, the 1996 CNN Transaction and the
Offering had occurred on the first day of each period presented.
B. MCCALL PRO FORMA ADJUSTMENTS
(1) This adjustment reflects the issuance of approximately 1,300,000
shares of Common Stock in exchange for all of the capital stock of the McCall
Affiliated Companies and the retirement of the capital stock of the McCall
Affiliated Companies held in treasury. The actual number of shares of Common
Stock to be issued pursuant to the McCall Acquisition is subject to an
adjustment based upon a final determination of the McCall Affiliated
Companies' working capital as of the date of closing.
(2) In August 1995, the Company and an affiliate of McCall formed SEAMAC
OFFSHORE, L.L.C. ("SEAMAC"), which was jointly owned and which operated two
vessels in Nigeria. Prior to the McCall Acquisition, SEACOR recorded its
interest in this venture based upon its 50% equity interest. As a result of
the McCall Acquisition, this venture is to be dissolved and the assets will
be wholly owned by the Company. This adjustment consolidates 100% of SEAMAC
with SEACOR.
(3) This adjustment reflects the replacement of historical salary expense
of $675,000 per year with revised salary costs based upon an employment
agreement entered into between an officer of McCall and SEACOR.
26
<PAGE>
C. 6.0% NOTE CONVERSION
On June 6, 1996, the Company notified the Trustee of the 6.0% Notes of
its election to call the 6.0% Notes for redemption on July 12, 1996.
Holders of the 6.0% Notes have the right to convert the 6.0% Notes into
shares of Common Stock at a ratio of 39.024 shares of Common Stock per
$1,000 principal amount of the 6.0% Notes (representing a conversion price
of $25.625 per share) prior to the date of redemption. If the entire
$55,250,000 principal amount outstanding of the 6.0% Notes were converted,
2,156,076 shares of Common Stock would be issued. The following
adjustments reflect the assumed conversion of the entire principal amount
outstanding of the 6.0% Notes:
(4) To transfer the carrying amounts of the 6.0% Notes and their
related debt issuance costs to Common Stock and paid-in capital.
(5) To reflect the reductions in interest expense and the amortization
of debt issuance costs as a result of the conversion and the related tax
effect.
D. PRO FORMA AS ADJUSTED
These adjustments reflect the completion of the Offering and the
consummation of the 1996 CNN Transactions. The detail of these adjustments
is as follows:
(6) To reflect the issuance of 750,000 shares of Common Stock pursuant
to the Offering and the application of the net proceeds therefrom (i) to
prepay $9.6 million of indebtedness outstanding to CNN, (ii) to fund the
purchase of six vessels from CNN for $22.7 million, and (iii) to increase
cash by $1.2 million, and to reflect the conversion of the 2.5% Notes.
(7) To reflect the reduction in interest expense due to the retirement
of indebtedness outstanding with a portion of the proceeds from the
Offering.
(8) To adjust income tax expense for the effect of the adjustments
described in note (7) assuming an effective tax rate of 35% for 1996 and
34% for 1995.
(9) To reflect an extraordinary loss due to the write-off of
unamortized debt discount relating to the early repayment of $9.6 million
of indebtedness outstanding to CNN, net of income tax benefits.
E. THE 1995 TRANSACTIONS
The pro forma adjustments relating to the 1995 Transactions are
described below. For purposes of calculating these adjustments, the
Company assumed that each of the 1995 Transactions was completed no later
than September 30, 1995. The use of the actual closing dates for the 1995
CNN Transaction, the Coastal/Phibro Transactions and the 1995 Common Stock
Offering, which all closed before December 31, 1995, would not have a
material effect on these pro forma adjustments.
27
<PAGE>
<TABLE>
<CAPTION>
GRAHAM 1995 CNN
NRC MERGER ACQUISITION TRANSACTION
---------- ------------- -------------
(IN THOUSANDS)
<S> <C> <C> <C>
Operating Revenues:
- -----------------------------
Marine ...................... $ (86)(1) $34,681 (4) $14,710 (15)
(814)(5) (3,795)(16)
972 (17)
Environmental--
Oil spill response ......... 968 (2) -- --
Retainer and other services 4,003 (2) -- --
---------- ------------- -------------
4,885 33,867 11,887
---------- ------------- -------------
Cost and Expenses:
Cost of Oil Spill Response 791 (2) -- --
Operating Expenses--
Marine .................... (86)(1) 23,340 (4) 9,274 (15)
(719)(5) 334 (18)
(1,141)(19)
Environmental .............. 1,167 (2) -- --
Administrative and general 1,645 (2) 3,996 (4) 1,358 (20)
(70)(5)
(446) (7)
(825)(6)
375 (14)
Depreciation and
amortization .............. 777 (2) 3,431 (4) 1,299 (21)
91 (3) (142)(5)
196 (8)
---------- ------------- -------------
4,385 29,136 11,124
---------- ------------- -------------
Operating Income ............. 500 4,731 763
---------- ------------- -------------
Other (Expense) Income:
Interest on Debt ............ (302)(2) (531)(4) --
531 (11)
(4,134)(10)
(59)(9)
Interest Income ............. 12 (2) 111 (4) --
Gain on Sale or Retirement
of Equipment ............... -- 467 (4) --
Other ....................... (6)(2) 450 (4) --
(446)(7)
---------- ------------- -------------
(296) (3,611) --
---------- ------------- -------------
Income Before Income Taxes,
Minority Interest, Equity
in Net Earnings of 50% or
Less Owned Companies, and
Discontinued Operations .. 204 1,120 763
Income Taxes ............... 123 (2) 36 (4) 201 (22)
1,463 (12)
(1,118)(12)
---------- ------------- -------------
Income Before Minority
Interest, Equity in Net
Earnings of 50% or Less
Owned Companies, and
Discontinued Operations .. 81 739 562
Minority Interest in(Income)
Loss of a Subsidiary ..... -- -- --
Equity in Net Earnings of
50% or Less Owned
Companies ................ -- -- --
---------- ------------- -------------
Income Before Discontinued
Operations ............... 81 739 562
Discontinued Operations .... -- (81)(4) --
81 (13)
---------- ------------- -------------
Net Income ................. $ 81 $ 739 $ 562
========== ============= =============
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
COASTAL/PHIBRO 1995 COMMON THE 1995
TRANSACTIONS(23) STOCK OFFERING TRANSACTIONS
-------------- -------------- --------------
<S> <C> <C> <C>
Operating Revenues:
- -----------------------------
Marine ...................... $ -- $ -- $45,668
Environmental--
Oil spill response ......... -- -- 968
Retainer and other services -- -- 4,003
-------------- -------------- --------------
-- 50,639
-------------- -------------- --------------
Cost and Expenses:
Cost of Oil Spill Response -- -- 791
Operating Expenses--
Marine .................... -- -- 31,002
Environmental .............. -- -- 1,167
Administrative and general -- -- 6,033
Depreciation and
amortization .............. 171 (24) -- 5,823
-------------- -------------- --------------
171 -- 44,816
-------------- -------------- --------------
Operating Income ............. (171) -- 5,823
-------------- -------------- --------------
Other (Expense) Income:
Interest on Debt ............ -- 970 (25) (3,525)
Interest Income ............. -- -- 123
Gain on Sale or Retirement
of Equipment ............... -- -- 467
Other ....................... -- -- (2)
-------------- -------------- --------------
-- 970 (2,937)
-------------- -------------- --------------
Income Before Income Taxes,
Minority Interest, Equity
in Net Earnings of 50% or
Less Owned Companies, and
Discontinued Operations .. (171) 970 2,886
Income Taxes ............... -- 330 (26) 1,035
-------------- -------------- --------------
Income Before Minority
Interest, Equity in Net
Earnings of 50% or Less
Owned Companies, and
Discontinued Operations .. (171) 640 1,851
Minority Interest in(Income)
Loss of a Subsidiary ..... -- -- --
Equity in Net Earnings of
50% or Less Owned
Companies ................ -- -- --
-------------- -------------- --------------
Income Before Discontinued
Operations ............... (171) 640 1,851
Discontinued Operations .... -- -- --
-------------- -------------- --------------
Net Income ................. $(171) $640 $ 1,851
============== ============== ==============
</TABLE>
(Footnotes begin on following page)
28
<PAGE>
- ------------
1) To reflect the elimination of certain intercompany transactions between
subsidiaries of the Company and subsidiaries of NRC Holdings.
2) To reflect the pre-acquisition results of operations of NRC Holdings
and its subsidiaries.
3) To reflect the amortization of $3.6 million of goodwill based upon the
straight line method over a 20-year period which is the estimated
period of benefit.
4) To reflect the pre-acquisition results of operations of Graham, as
restated to reflect an adjustment to the estimated depreciable lives of
the fixed assets of Graham.
5) To exclude the operating results of Offshore Trawlers, Inc., the Graham
entity that operates a shipyard whose assets were not included in the
Graham Acquisition.
6) To reflect the elimination of $1.5 million of certain historical salary
expense offset by $0.4 million of additional annual wage costs estimated
to be incurred by the Company to manage the acquired assets. The
Company does not expect to incur more than $0.4 million of additional
annual wage costs to manage these assets based on salaries paid to its
employees who perform similar functions for the Company's other
vessels.
7) To reflect the elimination of rental fees charged to Graham by a
non-acquired affiliate company.
8) To reflect depreciation associated with the acquired assets relative to
such expense as reported by Graham. The Company recorded the acquired
assets at their fair market values in accordance with the purchase
method of accounting. Consistent with the Company's depreciation
policies, the depreciable lives assigned to each of the vessels
acquired in the Graham Acquisition were determined by subtracting from
20 years for crew boats and 25 years for supply and utility vessels the
period from each vessel's original construction date to its acquisition
date.
9) To amortize deferred debt issuance costs to interest expense over the
life of the bank debt that financed the transaction utilizing the
straight-line method that approximates the effective interest method.
10) To reflect additional interest expense with respect to the $74.0
million of indebtedness incurred in connection with the Graham
Acquisition, assuming no principal repayments during the period.
11) To eliminate interest expense on debt that was not assumed in
connection with the acquisition.
12) To reflect the income tax effect of Graham income, which was primarily
earned in a partnership, assuming an effective tax rate of 34%.
13) To reflect the final activity of a wholly owned subsidiary of Offshore
Trawlers, Inc. which discontinued its operations in 1991.
14) To recognize the amortization of deferred cost relating to
non-cancellable consulting contracts with the former owners of Graham
as administrative salary expense over the terms of the related
contracts (3-5 years).
15) To reflect the operating revenues and expenses of (i) the five vessels
acquired from CNN, (ii) the 10 vessels previously bareboat
chartered-out by the Company to CNN and (iii) the one vessel bareboat
chartered-in by the Company from CNN.
16) To exclude bareboat charter revenues received from CNN for 10 vessels
under the pre-existing bareboat charter agreements.
17) To exclude the Company's share of the net pool results as a result of
the termination of the pooling arrangement with CNN.
18) To reflect drydocking expenses associated with the 10 vessels
previously bareboat chartered-out by the Company to CNN. As operator,
the Company will assume responsibility for drydocking expenses.
19) To reflect a decline in operating expenses due to a reduction in crew
wages and benefit costs as a result of savings relating to recrewing 13
of the Company's vessels previously operated by CNN. The Company
estimates savings of approximately $13,000 per month per vessel ($3,500
per month each for a master and chief engineer and $3,000 per month for
two mates each per vessel). The estimated savings are reduced by 25% to
recognize that the recrewing will take place over a period of time
rather than immediately. The pro forma adjustment reflects crew costs
reductions of $9,750 per month for vessels which, on an aggregated
basis, operated 137 months in 1994 and 117 months in 1995. Such savings
are based on crew wages paid to American crews and crews of other
nationalities for similar vessels operated by the Company as compared
with crew wages paid to French seamen for the above mentioned vessels.
To facilitate recrewing, the vessels were reflagged during 1995.
20) To reflect management fees payable to FISH pursuant to the management
agreement with FISH.
21) To reflect increased depreciation expense associated with the five
vessels acquired from CNN.
22) To adjust income tax expense for the effects of adjustments with
respect to the 1995 CNN Transaction assuming an effective tax rate of
34%.
23) The effect of pro forma adjustments relating to the contract amendments
with Coastal and Phibro would not be material to total environmental
services revenue in the pro forma Statements of Income. Although
the Company expects the contract amendments with Coastal and Phibro,
together with the addition of two major customers, to have a positive
effect on future operations, the Company has not attempted to pro forma
these effects in the above pro forma Statements of Income.
24) To reflect the amortization of $4.6 million of goodwill based upon the
straight-line method over a 20-year period which is the estimated
period of benefit.
25) To reflect the reduction in interest expense due to the retirement of
$31,000,000 of indebtedness outstanding under the DnB Facility with a
portion of the net proceeds from the 1995 Common Stock Offering.
26) To adjust income tax expense for the effect of the adjustment described
in note (25) assuming an effective tax rate of 34%.
29
<PAGE>
SELECTED HISTORICAL FINANCIAL INFORMATION
The following table sets forth selected consolidated income statement and
balance sheet information for each of the five years in the period ended
December 31, 1995, which data have been derived from consolidated financial
statements of the Company that have been audited by Arthur Andersen LLP,
independent auditors, which, in the case of the three years ended December
31, 1995, are included elsewhere in this Prospectus. The selected
consolidated income statement and balance sheet data for the three months
ended March 31, 1995 and 1996 are derived from the Company's unaudited
financial statements. Interim results, in the opinion of management, include
all adjustments (consisting solely of normal recurring adjustments) necessary
to present fairly the financial information for such periods; however, such
results are not necessarily indicative of the results which may be expected
for any other interim period or for a full year. The following data should be
read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the Consolidated Financial
Statements and the notes thereto included elsewhere in this Prospectus. Pro
forma financial statements of the Company are also presented elsewhere in
this Prospectus. See "Pro Forma Financial Statements."
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
1991 1992 1993 1994 1995
---------- --------- ---------- --------- ----------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Operating revenue
Marine ..................... $ 47,664 $ 57,742 $ 73,720 $ 74,366 $ 84,504
Environmental
Oil spill response ........ -- -- -- -- 8,927
Retainer and other service -- -- -- -- 12,838
---------- --------- ---------- --------- ----------
47,664 57,742 73,720 74,366 106,269
---------- --------- ---------- --------- ----------
Costs and Expenses
Costs of oil spill response -- -- -- -- 7,643
Operating expenses
Marine .................... 27,349 35,785 41,718 42,066 50,690
Environmental ............. -- -- -- -- 4,580
Administrative and general 3,329 4,183 6,097 6,149 12,908
Depreciation and
amortization .............. 8,109 10,746 10,006 11,983 16,740
---------- --------- ---------- --------- ----------
Operating income ............ 8,877 7,028 15,899 14,168 13,708
Net interest expense ....... 5,699 6,183 3,349 3,337 4,190
Gain/(loss) from equipment
sales and retirements .... -- -- (8) (316) 3,765
Other income (expense) .... (411) (496) 116 (267) 667
---------- --------- ---------- --------- ----------
Income before income taxes,
minority interest, equity
in net earnings of 50% or
less owned companies, and
extraordinary item ........ 2,767 349 12,658 10,248 13,950
Income tax expense ......... 907 176 4,391 3,501 4,858
---------- --------- ---------- --------- ----------
Income before minority
interest, equity in net
earnings of 50% or less
owned companies, and
extraordinary item ........ 1,860 173 8,267 6,747 9,092
Minority interest in
(income) loss of a
subsidiary ................ -- 41 (51) 184 321
Equity in net earnings of
50% or less owned
companies ................. -- -- 287 975 813
---------- --------- ---------- --------- ----------
Income before extraordinary
item ...................... 1,860 214 8,503 7,906 10,226
Extraordinary item -- loss
on extinguishment of debt,
net (less applicable
income taxes) ............. -- -- (1,093) -- --
---------- --------- ---------- --------- ----------
Net income ................... $ 1,860 $ 214 $ 7,410 $ 7,906 $ 10,226
========== ========= ========== ========= ==========
Net income per common share
--
Assuming no dilution(1) ... $ 0.51 $ 0.05 $ 1.26 $ 1.34 $ 1.61
Assuming full dilution .... 0.51 0.05 1.21 1.24 1.44
STATEMENT OF CASH FLOWS DATA:
Cash provided by operating
activities ................ $ 13,863 $ 11,625 $ 19,750 $ 17,784 $ 8,371
Cash provided by (used in)
investing activities ...... (33,411) (4,009) (24,178) (3,108) (77,274)
Cash provided by (used in)
financing activities ...... 20,817 2,235 20,049 (5,317) 52,791
OTHER FINANCIAL DATA:
EBITDA(2) .................. $ 17,357 $ 20,013 $ 27,248 $ 28,227 $ 32,044
BALANCE SHEET DATA (AT PERIOD END):
Cash and temporary
investments ............... $ 6,752 $ 16,485 $ 31,725 $ 41,135 $ 24,637
Total assets ............... 150,459 145,165 197,361 201,797 313,191
Total debt ................. 66,420 43,177 82,863 78,224 108,959
Stockholders' equity ....... 48,344 67,126 76,315 85,844 156,724
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------
1995 1996
--------- ---------
<S> <C> <C>
INCOME STATEMENT DATA:
Operating revenue
Marine ..................... $15,288 $37,222
Environmental
Oil spill response ........ -- 4,431
Retainer and other service -- 2,422
--------- ---------
15,288 44,075
--------- ---------
Costs and Expenses
Costs of oil spill response -- 2,046
Operating expenses
Marine .................... 9,267 21,484
Environmental ............. -- 1,249
Administrative and general 1,406 5,226
Depreciation and
amortization .............. 3,120 5,165
--------- ---------
Operating income ............ 1,495 8,905
Net interest expense ....... 556 1,090
Gain/(loss) from equipment
sales and retirements .... 473 243
Other income (expense) .... 224 249
--------- ---------
Income before income taxes,
minority interest, equity
in net earnings of 50% or
less owned companies, and
extraordinary item ........ 1,636 8,307
Income tax expense ......... 562 2,931
--------- ---------
Income before minority
interest, equity in net
earnings of 50% or less
owned companies, and
extraordinary item ........ 1,074 5,376
Minority interest in
(income) loss of a
subsidiary ................ 97 76
Equity in net earnings of
50% or less owned
companies ................. 236 141
--------- ---------
Income before extraordinary
item ...................... 1,407 5,593
Extraordinary item -- loss
on extinguishment of debt,
net (less applicable
income taxes) ............. -- --
--------- ---------
Net income ................... $ 1,407 $ 5,593
========= =========
Net income per common share
--
Assuming no dilution(1) ... $ 0.24 $ 0.64
Assuming full dilution .... 0.24 0.56
STATEMENT OF CASH FLOWS DATA:
Cash provided by operating
activities ................ $ 3,627 $ 9,936
Cash provided by (used in)
investing activities ...... 2,673 (734)
Cash provided by (used in)
financing activities ...... (3,788) (8,968)
OTHER FINANCIAL DATA:
EBITDA(2) .................. $ 5,073 $ 14,374
BALANCE SHEET DATA (AT PERIOD END):
Cash and temporary
investments ............... $ 43,629 $ 24,849
Total assets ............... 231,887 316,171
Total debt ................. 89,439 100,033
Stockholders' equity ....... 93,924 161,919
</TABLE>
- ------------
(1) This computation is submitted in accordance with Regulation S-K, Item
601(b)(11). For the periods noted, it is contrary to APB Opinion No. 15
as per footnote to paragraph 14 thereto which does not require the
inclusion of Common Stock equivalents in the earnings per share
calculation if the dilutive effect is less than 3%.
(2) As used herein, "EBITDA" is operating income plus depreciation and
amortization, amortization of deferred mobilization costs, which is
included in marine operating expenses, minority interest in (income)
loss of subsidiary and equity in net earnings of 50% or less owned
companies. EBITDA should not be considered by an investor as an
alternative to net income as an indicator of the Company's operating
performance or as an alternative to cash flows as a better measure of
liquidity.
31
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
GENERAL
Prior to the second quarter of 1995, the Company's consolidated operations
consisted exclusively of offshore marine services, whereas its environmental
response services were reported as part of equity in net earnings of 50% or
less owned companies. As a result of the NRC Merger, management adopted a
revised segmented reporting format for its offshore marine and environmental
services operations to enhance the understanding of the Company's financial
condition and results of operations and to describe more fully management's
discussion and analysis of these matters.
OFFSHORE MARINE SERVICES
The Company provides marine transportation and related services largely
dedicated to supporting offshore oil and gas exploration and production
through the operation, domestically and internationally, of offshore support
vessels. The Company's vessels deliver cargo and personnel to offshore
installations, tow and handle the anchors of drilling rigs and other marine
equipment, support offshore construction and maintenance work, and provide
standby safety support. The Company's vessels also are used for special
projects, such as well stimulation, seismic data gathering, freight hauling,
line handling, and oil spill emergencies.
The Company's operating revenue is affected primarily by average rates per
day worked and utilization. These performance measures are closely aligned
with the offshore oil and gas exploration industry and are a function of
demand and availability of marine vessels. The level of exploration and
development of offshore areas is affected by both short-term and long-term
trends in oil and gas prices which, in turn, are related to the demand for
petroleum products and the current availability of oil and gas resources.
The table below sets forth rates per day worked and utilization data for
the Company during the periods indicated.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------ THREE MONTHS ENDED
1993 1994 1995(1) MARCH 31, 1996(2)
-------- -------- ---------- ------------------
<S> <C> <C> <C> <C>
RATES PER DAY WORKED:(3)
Supply/Towing supply .......... $3,276 $3,254 $3,198 $3,691
Anchor handling towing supply . 5,468 5,322 4,960 5,382
Crew .......................... 1,725 1,646 1,641 1,647
Standby safety (4) ............ 5,209 4,687 4,378 4,645
Utility/Line handling ......... 2,105 2,114 1,183 1,120
Project and geophysical/Freight 3,606 3,801 4,010 4,197
Overall fleet ................. 3,831 3,796 2,851(5) 2,495(5)
OVERALL UTILIZATION:(3)
Supply/Towing supply .......... 79.5% 81.6% 83.9% 97.1%
Anchor handling towing supply . 91.5 77.2 80.1 96.6
Crew .......................... 72.1 59.4 94.7 97.4
Standby safety ................ 91.6 87.0 82.1 88.7
Utility/Line handling ......... 88.6 86.9 70.2 73.1
Project and geophysical/Freight 99.8 94.6 89.2 99.3
Overall fleet ................. 85.6 83.5 81.8 86.8
</TABLE>
- ------------
(1) Includes data with respect to the 127 vessels acquired on September 15,
1995 pursuant to the Graham Acquisition.
(2) Does not include data from the 41 McCall vessels acquired pursuant to
the McCall Acquisition on May 31, 1996.
32
<PAGE>
(3) Rates per day worked and overall utilization figures exclude owned
vessels that are bareboat and time chartered-out, pooled and joint
venture vessels, and managed/operated vessels and include vessels
bareboat chartered-in by the Company. Rates per day worked is the ratio
of total charter revenue to the total number of vessel days worked.
(4) Revenue for standby safety vessels is earned in British pounds sterling
( pounds sterling) and has been converted to U.S. dollars at the
weighted average exchange rate for the periods indicated. As earned in
British pounds sterling, rates per day worked for the periods indicated
were pounds sterling3,466, pounds sterling3,083, pounds sterling2,714
and pounds sterling3,032, respectively.
(5) The decline in the overall fleet day rate in 1995 and 1996 was due
primarily to the large number of crew and utility vessels added to the
Company's fleet from the Graham Acquisition. Crew and utility vessels
earn substantially lower rates per day worked than the other types of
vessels in the Company's fleet but also have substantially lower costs
so the rate per day worked amount is not indicative of operating income
performance.
A significant factor affecting operating revenues, other than average
rates per day worked and utilization, is the number of vessels owned and
bareboat chartered-in by the Company. Operating revenues and associated
expenses for vessels bareboat chartered-in and for owned vessels are incurred
at similar rates. However, operating expenses associated with vessels
bareboat chartered-in include bareboat charter hire expenses that, in turn,
are included in vessel expenses, but exclude depreciation expense.
At various times, the Company provides management services to other vessel
owners for a contracted fee. Charter revenues and vessel expenses of those
managed vessels are not generally included in the Company's operating
results, but management fees are included in operating revenue. One vessel
was managed in 1994, and the management fee was included in operating
revenue. However, due to certain contractual requirements, the operating
revenues and expenses associated with one vessel managed by the Company
during the majority of 1993 were included in operating results. These vessels
have been excluded for purposes of calculating fleet rates per day worked and
utilization in the applicable years.
The Company also bareboat charters-out vessels. Operating revenues for
these vessels are lower than for vessels owned and operated or bareboat
chartered-in by the Company, because vessel expenses, normally recovered
through charter revenue, are the burden of the charterer. Operating expenses
include depreciation expense if the vessels which are chartered-out are
owned. In December 1993, the Company bareboat chartered-out 10 owned vessels
to CNN under long-term contracts ranging from 8.5 to 11 years. From January
1, 1994, CNN had contributed these vessels to the SEAFISH Pool and pursuant
to the termination of the pool, these contracts were terminated effective
October 1, 1995. See "Business -- Joint Ventures and Pooling Arrangements."
The table below sets forth the Company's fleet structure at the dates
indicated:
<TABLE>
<CAPTION>
AT DECEMBER 31,
---------------------------- AT MARCH 31,
FLEET STRUCTURE 1993 1994 1995 1996
-------- -------- -------- ----------------
<S> <C> <C> <C> <C>
Owned ................................. 69 68 189 186(1)
Bareboat and Time Chartered-in(2) .... 1 1 2 3
Managed/operated ...................... -- 1 -- --
Joint venture vessels(3) .............. 3 8 12 12
Pool vessels(4) ....................... -- 5 5 5
Overall fleet ......................... 73 83 208 206
</TABLE>
- ------------
(1) Does not include 41 vessels acquired in the McCall Acquisition and 6
vessels acquired in the 1996 CNN Transaction. See "Recent
Developments." Since March 31, 1996, the Company has sold 3 vessels.
(2) A bareboat charter is a lease of a vessel under which the entity
chartering-in the vessel is responsible for all crewing, insurance and
operating expenses, as well as the payment of bareboat charter hire to
the vessel owner. A time charter is a lease of a vessel under which the
entity providing the vessel is
33
<PAGE>
responsible for all crewing, insurance, and operating expenses. Except
for one vessel time chartered-in at March 31, 1996, all other vessels
are bareboat chartered.
(3) In 1995 and 1996, includes nine vessels owned by the TMM Joint Venture
and two vessels bareboat chartered to SEAMAC OFFSHORE L.L.C. ("SEAMAC")
which are operating offshore West Africa. As part of the McCall
Acquisition, the Company acquired the remaining interest that it did
not already own in SEAMAC. For periods prior to 1995, includes only
vessels owned by the TMM Joint Venture. See "Business -- Joint Ventures
and Pooling Arrangements."
(4) In 1994, includes five vessels owned by CNN in the SEAFISH Pool. In
1995 and 1996, includes five vessels owned by Toisa Ltd. in the SEAVEC
Pool. The SEAFISH Pool was terminated effective October 1, 1995.
Vessel operating expenses primarily are a function of fleet size and
utilization levels. The most significant vessel operating expense items are
wages paid to marine personnel, maintenance and repairs, and marine
insurance. In addition to variable vessel operating expenses, the offshore
marine segment also incurs fixed charges related to the depreciation of
property and equipment. Depreciation is a significant operating cost, and the
amount related to vessels is the most significant component.
Although substantially all of the Company's revenues and expenses are in
U.S. dollars, some of the Company's revenues and expenses are paid in foreign
currencies. For financial statement reporting purposes, these amounts are
translated into U.S. dollars at the weighted average exchange rates during
the relevant period. The foregoing applies primarily to the Company's North
Sea operations and to a lesser extent its West African and Mexican offshore
marine operations. Overall, the percentage of the Company's offshore marine
revenues derived from foreign operations whether in U.S. dollars or foreign
currencies was 37% for the fiscal year ended December 31, 1995.
Regulatory drydockings, which are a substantial component of marine
maintenance and repair costs, are expensed when incurred. Under applicable
maritime regulations, vessels must be drydocked twice in a five-year period
for inspection and routine maintenance and repair. The Company follows an
asset management strategy pursuant to which it defers required drydocking of
selected marine vessels and voluntarily removes these marine vessels from
operation during periods of weak market conditions and low rates per day
worked. Should the Company undertake a large number of drydockings in a
particular fiscal quarter or put through survey a disproportionate number of
older vessels which typically have higher drydocking costs, comparative
results may be affected. For the three months ended March 31, 1996, the
Company completed the drydocking of 24 marine vessels at an aggregate cost of
$1.8 million as compared with three marine vessels drydocked at an aggregate
cost of $0.2 million in the comparable period of 1995. The low number of
marine vessel drydockings in 1995 was in direct response to weak market
conditions and low day rates in the U.S. Gulf of Mexico. The Company's
results in 1996 reflect the return to a normalized drydocking schedule for a
quarterly period and included the drydocking of 14 crew and utility vessels
at an aggregate cost of $0.4 million. Drydocking costs for smaller vessels,
such as crew and utility are typically lower than for larger vessels, such as
supply and anchor handling towing supply. For the year ended December 31,
1995, the Company completed the drydocking of 35 marine vessels at an
aggregate cost of $2.9 million versus 28 marine vessels drydocked at an
aggregate cost of $3.5 million in the comparable period of 1994 and 28
vessels at an aggregate cost of approximately $2.9 million in the year ended
December 31, 1993. The Company's results in 1995, include 14 Graham vessels
drydocked at an aggregate cost of $0.5 million.
As of March 31, 1996, the average age of the Company's offshore marine
service fleet was approximately 14 years, whereas, at such date, the average
age of the Company's environmental service response fleet was 27.6 years.
NRC's vessels primarily operate in a "stand-by" mode with minimal wear and,
consequently, management does not consider age to be a reliable indicator of
the commercial viability of the vessels. The Company believes that after an
offshore supply vessel has been in service for approximately 25 years, the
amount of expenditures (which typically increase with vessel age) necessary
to satisfy required marine certification standards may not be economically
justifiable. If the Company is unable to replace its vessels at the end of
their useful economic lives, the costs of new building could
34
<PAGE>
materially increase the Company's capital expenditures. There can be no
assurance that the Company will be able to maintain its fleet by extending
the economic life of existing vessels or acquiring new or used vessels, or
that the Company's financial resources will be sufficient to enable it to
make capital expenditures for such purposes.
Operating results are also affected by the Company's participation in the
following ventures: (i) the SEAFISH Pool, terminated effective October 1,
1995, whereby operating revenues and expenses for certain vessels were pooled
and the net pool results were shared equally by the Company and CNN after
certain preference payments and (ii) a pooling agreement with Toisa Ltd. to
coordinate the marketing of both companies' vessels in the North Sea standby
safety market. Additionally, the Company has an equity interest in the
results of (i) the TMM Joint Venture, as defined below, which operated ten
vessels in Mexico at December 31, 1995 and (ii) SEAMAC's two large crew
vessels operating offshore West Africa. The Company acquired the 50% interest
in SEAMAC that it did not already own as part of the McCall Acquisition. See
"Business -- Joint Ventures and Pooling Arrangements."
On September 15, 1995, the Company completed the Graham Acquisition which
included 127 vessels used to support the offshore oil and gas exploration and
production industry in the U.S. Gulf of Mexico, and certain real estate,
capital equipment and inventory associated with the operation of these
vessels. The acquisition was financed with $74.0 million of borrowings under
the DnB Facility. Of the $74.0 million borrowed, $72.9 million was paid to
Graham to acquire the purchased assets, and the balance was used to defray
$1.2 million in debt issue and acquisition costs. Acquisition costs have been
allocated to the vessels acquired and accordingly reported as Property and
Equipment. Debt issue costs have been included in Other Assets in the
consolidated balance sheet of the Company and will be amortized to interest
expense over the life of the related borrowings. See "Recent Developments --
1995 Transactions."
In the 1995 CNN Transaction, the Company acquired three towing supply
vessels, two anchor handling vessels, and certain other assets for aggregate
consideration of $21.55 million, of which $11.3 million was paid by issuing
459,948 shares of Common Stock to CNN and the remainder of which was paid in
cash. The parties also terminated their existing pooling arrangement and have
agreed to manage the formerly pooled vessels through FISH. See "Recent
Developments --1995 Transactions."
In the McCall Acquisition, the Company took control of 36 crew vessels and
5 utility vessels as part of the acquisition of the capital stock of McCall
and affiliated companies. The Company will issue approximately 1.3 million
shares of Common Stock for all of the outstanding capital stock of McCall and
affiliated companies, subject to an adjustment based upon a final
determination of the working capital as of the closing date.
In the 1996 CNN Transaction, the Company will acquire 6 vessels and
certain other assets for aggregate consideration of $22.7 million, all of
which is payable in cash. In addition, CNN has agreed pursuant to the 1996
CNN Agreement to convert $4,750,000 principal amount of the 2.5% Notes into
156,650 shares of Common Stock pursuant to the terms of such notes. The
Company will also prepay certain Promissory Notes at face value of $9.6
million and undertake a secondary offering of Common Stock owned by CNN.
ENVIRONMENTAL SERVICES
The Company's environmental services business provides contractual oil
spill response services to those who store, transport, produce or handle
petroleum and certain other non-petroleum oils as required by OPA 90. NRC's
clients include tank vessel owner/operators, refiners and terminal operators,
exploration and production facility operators and pipeline operators. NRC
charges a retainer fee to its customers for ensuring by contract the
availability at predetermined rates to NRC's response services. Retainer
services include employing a staff to supervise response to an oil spill
emergency and maintaining specialized equipment, including marine equipment,
in a ready state for spill response as contemplated by response plans filed
by NRC's customers in accordance with OPA 90 and various state regulations.
NRC also maintains relationships with numerous environmental sub-contractors
to assist with equipment maintenance and provide trained personnel for
deploying equipment in a spill response.
35
<PAGE>
Pursuant to retainer agreements entered into with NRC, certain vessel
owners pay in advance to NRC a minimum annual retainer fee based upon the
number and size of vessels in each such owner's fleet and in some
circumstances pay NRC additional fees based upon the level of each vessel
owner's voyage activity in the U.S. The Company recognizes the greater of
revenue earned by voyage activity or the portion of the retainer earned in
each accounting period. Certain other vessel owners pay a fixed fee for NRC's
retainer services and such fee is recognized ratably throughout the year.
Facility owners generally pay a quarterly fee to NRC based on a formula that
defines and measures petroleum products transported to or processed at the
facility. Some facility owners pay an annual fixed fee and such fee is
recognized ratably throughout the year. NRC's retainer agreements with vessel
owners generally range from one to three years while retainer arrangements
with facility owners are as long as seven years.
Spill response revenue is dependent on the magnitude of any one spill
response and the number of spill responses within a given fiscal period.
Consequently, spill response revenue can vary greatly between comparable
periods and the revenue from any one period is not indicative of a trend or
of anticipated results in future periods. Costs of oil spill response
activities relate primarily to (i) payments to sub-contractors for labor,
equipment, and materials, (ii) direct charges to NRC for equipment and
materials and (iii) training and exercises related to spill response
preparedness.
The principal components of NRC's operating costs are salaries and related
benefits for operating personnel, payments to sub-contractors, equipment
maintenance and depreciation. These expenses are primarily a function of
regulatory requirements and the level of retainer business.
On March 14, 1995, the Company acquired the remaining 57.1% of the
outstanding common stock of NRC Holdings that it did not already own through
the NRC Merger. From March 14, 1995, the financial condition, results of
operations and cash flows of CRN and its primary operating subsidiary, NRC,
are reflected in the Company's consolidated financial statements. Prior to
March 14, 1995, the Company reported its 42.9% equity interest in NRC
Holdings as an investment in a 50% or less owned company that was accounted
for by the equity method. Each share of common stock of NRC Holdings (other
than treasury shares and shares held by CRN) outstanding immediately prior to
the effective time of the NRC Merger was converted into 2,203.7474 shares of
Common Stock. Accordingly, an aggregate of 292,965 shares of Common Stock
(having a value of approximately $5.7 million at the time of issuance) were
issued to the former stockholders of NRC Holdings, including MFHI. See
"Recent Developments -- 1995 Transactions."
On October 27, 1995, the Company and its subsidiary, NRC, amended certain
existing agreements with Coastal and Phibro. Those agreements provide, among
other things, for a reduction in, and subsequent elimination of, those
customers' participation interests in certain operating results of NRC, a
reduction in their retainer fees payable to NRC, and an elimination of
certain options held by each of them to purchase up to 20% of the fully
diluted common stock of NRC. In addition, the agreements with Coastal were
also modified to provide for (i) an extension of its service agreement with
NRC for an additional period of three years, (ii) the issuance of 311,357
shares of the Common Stock (having a value of $7.5 million at the time of
issuance) and (iii) Coastal's agreement not to acquire more than 5.0% of the
outstanding Common Stock. See "Recent Developments -- 1995 Transactions."
36
<PAGE>
RESULTS OF OPERATIONS
The following table sets forth operating revenue and operating profit by
segment for the periods indicated. The offshore marine services segment data
is provided by geographic area of operation. The environmental business
segment's principal operations are in the United States.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
------------------------------- -------------------
1993 1994 1995 1995 1996
---- ---- ---- ---- ----
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Operating Revenue:
Marine:
United States ........................ $36,416 $43,664 $ 52,935 $ 9,562 $24,806
North Sea ............................ 20,007 16,222 13,523 2,849 3,562
Offshore West Africa ................. 12,374 10,189 14,276 1,984 7,686
Other foreign(1) ..................... 4,923 4,291 3,770 893 1,168
--------- --------- --------- -------- ---------
73,720 74,366 84,504 15,288 37,222
Environmental ........................ -- -- 21,765 -- 6,853
--------- --------- --------- -------- ---------
73,720 74,366 106,269 15,288 44,075
Operating Profit:
Marine:
United States ........................ 11,575 11,541 15,544 2,603 7,535
North Sea ............................ 3,085 7 (2,952) (998) (718)
Offshore West Africa ................. 1,683 2,582 4,012 489 1,285
Other foreign(1) ..................... 1,816 1,667 1,843 367 481
--------- --------- --------- -------- ---------
18,159 15,797 18,447 2,461 8,583
Environmental ........................ -- -- 1,626 -- 1,372
--------- --------- --------- -------- ---------
18,159 15,797 20,073 2,461 9,955
Other income (expense)(2) .............. 116 (73) 190 224 2
General corporate administration ...... (2,268) (2,139) (2,123) (493) (560)
Net interest expense ................... (3,349) (3,337) (4,190) (556) (1,090)
Minority interest in loss (income) of a
subsidiary ............................ (51) 184 321 97 76
Equity in net earnings of 50% or less
owned companies ....................... 287 975 813 236 141
Income tax expense ..................... (4,391) (3,501) (4,858) (562) (2,931)
--------- --------- --------- -------- ---------
Income before extraordinary item ...... $ 8,503 $ 7,906 $ 10,226 $ 1,407 $ 5,593
========= ========= ========= ======== =========
</TABLE>
(1) Other foreign locations where the Company conducts business are Mexico,
the Arabian Gulf, and Australia.
(2) Excludes net interest expense and gain/(loss) from equipment sales and
retirements and certain other expenses that were reclassified to
operating profit of the applicable geographical area of operation.
COMPARISON OF THREE MONTHS ENDED MARCH 31, 1996 TO THREE MONTHS ENDED MARCH
31, 1995
The marine business segment's operating revenue increased $21.9 million in
the three-month period ended March 31, 1996, compared to the three-month
period ended March 31, 1995, due primarily to a net increase in the number of
owned or chartered-in vessels, improved rates per day worked and utilization,
and the termination of bareboat chartering-out arrangements for nine vessels
owned by the Company. In the third and fourth quarters of 1995, the Company
acquired 132 offshore vessels that substantially increased its fleet size,
primarily in the U.S. Gulf of Mexico. These acquired vessels (including 83
utility, 37 crew, seven supply, three towing supply, and two anchor handling
towing supply) and two other chartered-in vessels account for $15.5 million
or 71% of the increase in operating revenue between comparable quarters. The
Company's marine business segment's rates per day worked and utilization
increased due primarily to an improvement in the market conditions in the
U.S. Gulf of Mexico and North Sea. During the fourth quarter of 1995, the
Company terminated the bareboat charter-out of nine owned vessels which
caused revenue to increase in its West African operations.
37
<PAGE>
The environmental business segment's operating revenue for the 1996 period
consisted of $4.4 million in retainer and other revenue and $2.4 million in
oil spill response revenue. During the first quarter, the Company responded
to 12 spills that occurred primarily in the Gulf Coast and Eastern regions of
the United States.
The marine business segment's operating profit increased $6.1 million in
the three-month period ended March 31, 1996, compared to the three-month
period ended March 31, 1995. The increase in operating profit was primarily
due to the factors affecting operating revenue as outlined above. In addition
to an increase in expenses customarily associated with those factors
affecting revenue, operating and administrative and general expenses rose
between comparable quarters. Operating expenses increased due primarily to an
increase in (i) the number of vessels drydocked and repaired in accordance
with regulatory requirements, (ii) marine insurance claim costs, and (iii)
wage and related benefit costs. Administrative and general expenses increased
due primarily to an increase in bad debt provisions for trade account
receivables and higher wage and related benefit costs.
The environmental business segment's operating profit for the 1996 period
benefited from oil spill response activities. Oil spill response gross profit
(oil spill response revenue less costs of oil spill response) was $0.4
million in the three-month period ended March 31, 1996. Oil spill response
profit was due to response activities associated with 12 spills that occurred
primarily in the Gulf Coast and Eastern regions of the United States.
In the three-month period ended March 31, 1996, other income was
insignificant. In the three-month period ended March 31, 1995, other income
related primarily to a $0.2 million gain recognized in conjunction with the
purchase of $2.3 million principal amount of the Company's outstanding 6.0%
Notes. The gain represented the difference between the amount paid to acquire
the 6.0% Notes and their carrying amount, net after giving effect to a
write-off of certain unamortized deferred financing costs associated with the
original sale of such securities.
Overall administrative and general expenses, related primarily to
operating activities, increased $3.8 million in the three-month period ended
March 31, 1996, compared to the three-month period ended March 31, 1995. The
marine business segment accounted for $2.3 million of this increase which
related primarily to (i) the management of vessels recently acquired,
chartered-in, and directly operated upon the termination of bareboat
charters, (ii) bad debt provisions for trade account receivables, and (iii)
wage and related benefit costs. The environmental business segment's
administrative expenses for 1996 were $1.5 million. The Company's
administrative and general expenses primarily include costs associated with
personnel, professional services, travel, communications, facility rental and
maintenance, general insurance, and franchise taxes.
Overall depreciation and amortization expense, which related primarily to
operating activities, increased $2.0 million in the three-month period ended
March 31, 1996, compared to the three-month period ended March 31, 1995. The
marine business segment accounted for $1.3 million of this increase and
related primarily to the acquisition of vessels and other related assets. The
depreciation and amortization expense of the Company's environmental business
segment was $0.7 million for the 1996 period.
Net interest expense increased $0.5 million in the three-month period
ended March 31, 1996, compared to the three-month period ended March 31,
1995. The increase resulted primarily from an increase in principal due on
outstanding indebtedness. During the third and fourth quarters of 1995, the
Company financed a portion of the cost to acquire certain vessels and other
related assets with borrowings from the DnB Facility.
In the three-month period ended March 31, 1996, equity in the earnings of
50% or less owned companies, net of applicable income taxes, resulted from
the Company's investment in a Mexican joint venture and SEAMAC. In the
comparable period of 1995, equity earnings were realized exclusively from the
Company's participation in the Mexican joint venture. Operations in Mexico
have declined between comparable quarters due to weakening market conditions.
COMPARISON OF YEAR ENDED DECEMBER 31, 1995 TO YEAR ENDED DECEMBER 31, 1994
Excluding $14.4 million in operating revenue generated by the Graham
vessels from the date of acquisition, September 15, 1995, marine operating
revenue declined for the twelve-month period ended
38
<PAGE>
December 31, 1995 compared to the twelve-month period ended December 31,
1994, due primarily to decreases in rates per day worked and overall
utilization levels in the U.S. Gulf of Mexico and North Sea. Reduced rates
per day worked and utilization resulted from weak market conditions, the
renewal of a long-term charter for six vessels at substantially reduced rates
in the North Sea, and the removal from service for extended periods of
several vessels in each market in 1995. A reduced number of vessels resulting
from the sale of equipment, a decline in the Company's share of the SEAFISH
Pool's results, and a negative effect from the Company's participation in the
SEAVEC Pool also contributed to the decline in operating revenue. These
declines were offset by an improvement between years in revenue generated
from the Company's vessels operating in West Africa due to strong market
conditions. Additionally, utilization and rates per day worked in the U.S.
Gulf of Mexico and North Sea improved during the third and fourth quarters of
1995.
Environmental operating revenue for the 1995 period consisted of $12.9
million in retainer and other revenue and $8.9 million in oil spill response
revenue. Oil spill response revenue was largely attributable to response
activities associated with an oil spill in the Delaware River near
Philadelphia, Pennsylvania during the third quarter of 1995.
Excluding $5.4 million of operating profit generated by the Graham vessels
from the date of acquisition, September 15, 1995, marine operating profit
declined for the twelve-month period ended December 31, 1995 compared to the
twelve-month period ended December 31, 1994. The decrease in operating profit
was primarily due to the factors affecting operating revenue as outlined
above. Additional factors contributing to the decline in operating profit
were (i) rising wage costs, (ii) increased health insurance costs in the
U.S., and (iii) higher fuel costs resulting from a contract renewal for six
of the Company's vessels operating in the North Sea. The decline in operating
profit was offset by (i) gains recognized from the sale of vessels, (ii)
reduced repair and maintenance costs, primarily related to lower drydocking
expenses, (iii) the beneficial effect of strong market conditions in West
Africa, (iv) a decline in expenses resulting from the full amortization of
certain previously deferred mobilization costs, and (v) reduced litigation
and settlement costs relating to the settlement of a lawsuit in 1994.
Environmental operating profit for the period benefited from oil spill
response activity. Oil spill response gross profit (oil spill response
revenue less costs of oil spill response) was $1.3 million in the nine and
one-half month period ended December 31, 1995. Spill response profit was
primarily due to response activities associated with an oil spill in the
Delaware River near Philadelphia, Pennsylvania during the third quarter of
1995.
In the twelve-month period ended December 31, 1995, other income related
primarily to a $0.2 million gain recognized in conjunction with the purchase
of $2.3 million principal amount of the Company's outstanding 6.0% Notes. The
gain represented the difference between the amount paid to acquire the 6.0%
Notes and their carrying amount, net after giving effect to a write-off of
certain unamortized deferred financing costs associated with the original
sale of such securities.
Corporate administrative and general expenses remained constant between
years, but total administrative and general costs increased. Administrative
and general expenses associated with the marine segment, which is included in
operating profit, increased between years. This increase resulted primarily
from (i) $1.3 million in expenses incurred in connection with managing the
vessels acquired from Graham for three and one-half months, (ii) fees charged
by FISH to manage the Company's vessels operating offshore West Africa and in
the Arabian Gulf, commencing October 1, 1995, and (iii) increasing wage
costs. Environmental administrative and general expense for the 1995 period,
which is also included in operating profit, was $5.0 million. The Company's
administrative and general expenses primarily include costs associated with
personnel, professional services, travel, communications, facility rental and
maintenance, general insurance and franchise taxes.
Total depreciation and amortization expense, which primarily relates to
operating activities, was $16.7 million for the twelve-month period ended
December 31, 1995 compared to $12.0 million for the twelve-month period ended
December 31, 1994. Depreciation and amortization associated with the
Company's marine segment, which is included in operating profit, increased
between years. This increase resulted primarily from (i) $1.4 million in
expense incurred in connection with depreciating assets
39
<PAGE>
acquired from Graham for three and one-half months, (ii) the acquisition of
vessels in the 1995 CNN Transaction, (iii) capital improvements made aboard
existing vessels, and (iv) the acquisition of office equipment and leasehold
improvements. The Company's environmental segment's depreciation and
amortization for the 1995 period, which is also included in operating profit,
was $2.9 million.
Excluding the effect of $1.4 million of interest expense associated with
borrowings from DnB to finance the Graham Acquisition and $0.4 million in
interest expense associated with the environmental segment, net interest
expense decreased between comparable years. This decrease resulted primarily
from the normal and accelerated repayment of outstanding indebtedness.
Interest expense was offset by an increase between years in interest income
earned on temporary cash investments due primarily to higher interest rates
and invested cash balances and notes due from a 50% or less owned equity
investee.
In the twelve-month period ended December 31, 1995, equity in the net
earnings of 50% or less owned companies, net of applicable income taxes,
resulted primarily from the Company's investment in a joint venture with
Transportacion Maritima Mexicana ("TMM"), established in January 1994, in
which the Company has a 40% equity interest (the "TMM Joint Venture"). Equity
in the net earnings of 50% or less owned companies for the period also
includes the results of SEAMAC. In the comparable period of 1994, earnings
realized from the TMM Joint Venture were less significant because the venture
commenced operations during that year. Equity earnings recognized during 1994
were generated primarily from the Company's investment in NRC Holdings.
During the first quarter of 1995, the NRC Merger was completed and from March
14, 1995, the financial condition, results of operations, and cash flows of
these environmental activities have been included in the consolidated
financial statements of the Company and are no longer reported on the equity
method.
COMPARISON OF YEAR ENDED DECEMBER 31, 1994 TO YEAR ENDED DECEMBER 31, 1993
Operating revenue increased 0.9% to $74.4 million in 1994, compared to
$73.7 million in 1993. The revenue increase was due primarily to the
acquisition of vessels and additional revenue earned through the Company's
participation in the pooling arrangement with CNN. In December 1993, the
Company acquired and bareboat chartered-out 10 offshore towing supply and
anchor handling towing supply vessels to CNN and, at the same time, formed a
pooling arrangement that commenced operation on January 1, 1994. This
increase was offset by the discontinued operations of three vessels
previously managed or bareboat chartered-in and the decline in the overall
utilization and rates per day worked of the Company's remaining fleet.
The rates per day worked for the Company's vessels operating in the Gulf
of Mexico remained constant between years, but overall utilization declined.
Although drilling activity increased for most of 1994, overall utilization
did not improve. A number of competitors returned vessels to the Gulf of
Mexico from other geographical areas, and other vessels were re-commissioned
and returned to service during 1994 to meet the increased demand caused by
improved drilling activity. During 1993, the Company returned to service
three vessels that had been voluntarily removed from operation, and these
vessels were available for work during all of 1994.
The rates per day worked and overall utilization of the Company's standby
safety vessels operating in the North Sea declined significantly between
years. A contract for six of the Company's vessels operating in this area
with a major customer expired and was renewed in 1994 at significantly lower
rates per day worked than those earned in 1993. Furthermore, long-term
charters for three additional standby safety vessels operating in the North
Sea were not renewed during the year, and overall utilization declined.
Overall utilization of the Company's vessels operating in offshore West
Africa also declined due primarily to the down-time associated with the
mobilization of two towing supply vessels out of Nigeria. Although the rates
per day worked remained constant, operating revenue declined due to the
discontinued operations of three vessels previously managed or bareboat
chartered-in by the Company.
Vessel expenses increased 0.8% to $42.1 million and were 56.6% of
operating revenue in 1994, compared to $41.7 million or 56.6% of operating
revenue in 1993. An increase in the cost to repair and maintain hulls and
related equipment and engines was the primary factor contributing to this
increase.
40
<PAGE>
Hull repairs rose primarily because of expenditures incurred due to
additional regulatory inspections, the costs associated with vessels changing
to alternative service, and higher drydocking costs. Although the number of
vessels drydocked between years remained constant, the per vessel average
cost rose. All drydock repairs in 1994 met regularly scheduled maritime
inspection requirements; whereas, in 1993, several emergency drydockings were
performed at lower cost. Engine repair costs increased primarily because of
an increase in the number of major overhauls performed. Marine insurance
costs rose, continuing a trend over the past three years. In an attempt to
control increased marine insurance costs in future years, the Company has
expanded the number of personnel and programs in its safety department. Fuel
expense also increased; in prior years, fuel was provided by a North Sea
customer for several standby safety vessels but, during 1994, this cost
became the responsibility of the Company. These increases have been offset by
the discontinued operations of three vessels previously managed or bareboat
chartered-in, a decrease in health insurance expense caused by reduced claims
cost, and a decline in expenses associated with overseas operations due to a
reduction in the number of Company owned vessels working in Nigeria.
If the Company had not acquired and bareboat chartered-out 10 towing
supply and anchor handling towing supply vessels to CNN, vessel expenses as a
percentage of operating revenue would have increased 4.3%. This increase was
caused by a decline in operating revenue earned from charters (other than
bareboat charters) and rising operating expenses. Other charter revenue
declined primarily because of reduced overall utilization of the Company's
fleet in all geographical operating areas.
Administrative and general expenses increased 0.9% to $6.2 million in
1994, compared to $6.1 million in 1993. The increase was due primarily to an
increase in wages, staff, and costs to relocate the Company's executive
offices from Morgan City, Louisiana to Houston, Texas, but was offset by a
decline in certain litigation defense costs due to the settlement of a
lawsuit in March 1994.
Depreciation and amortization expense increased 19.8% to $12.0 million in
1994, compared to $10.0 million in 1993. The increase was due primarily to
the acquisition of 10 towing supply and anchor handling towing supply vessels
from CNN and other additions to marine property and equipment, offset by a
decline in amortizable costs associated with deferred consulting and covenant
not to compete contracts.
Net interest expense remained unchanged and totaled $3.3 million. Interest
expense rose due to an increase in outstanding indebtedness partially offset
by lower blended interest rates. Interest income also increased and
completely offset the increase in interest expense. Greater cash balances
generated from operations, the sale of the 6.0% Notes, and higher interest
rates were the primary factors contributing to the increase in interest
income between years.
Equity in net earnings of 50% or less owned companies increased 234.9% to
$1.5 million in 1994 compared to $0.4 million in 1993. The increase was due
primarily to a full year of operations of equity investments in NRC and the
TMM Joint Venture. NRC and the TMM Joint Venture commenced operations in
August 1993 and January 1994, respectively. The Company had a 42.9% and 40.0%
equity interest in NRC and the TMM Joint Venture, respectively, at December
31, 1994.
LIQUIDITY AND CAPITAL RESOURCES
The Company's ongoing liquidity requirements arise primarily from its need
to service debt, fund working capital, acquire or improve equipment, and make
other investments. Management believes that cash flow from operations will
provide sufficient working capital to fund the Company's operating needs. The
Company may, from time to time, issue shares of Common Stock, debt, or a
combination thereof to finance the acquisition of equipment and businesses or
improvements to existing equipment.
On July 1, 1993, the Company sold $57.5 million principal amount of 6.0%
Notes which are convertible into shares of Common Stock at any time prior to
July 1, 2003 at a conversion rate of 39.024 shares per $1,000 principal
amount of the 6.0% Notes. The 6.0% Notes are redeemable, in whole or part, at
the election of the Company any time on or after July 1, 1996 initially at
104.2% of the principal amount thereof and declining by 0.67% each year
thereafter to 100% of the principal amount in 2003. The Company has elected
to call the 6.0% Notes for redemption and anticipates that the holders of the
6.0% Notes will elect to convert their 6.0% Notes into shares of the Common
Stock. See "Recent Developments -- Conversion."
41
<PAGE>
In December 1993, the Company financed, in part, the acquisition of 10
offshore towing supply vessels from CNN with: (i) $12.0 million principal
amount senior unsecured notes payable having varying maturities of one to ten
years, bearing interest rates ranging from 3.25% to 5.50% per annum and which
have been guaranteed by the Company and (ii) $4.8 million principal amount of
the 2.5% Notes. The 2.5% Notes are convertible into shares of Common Stock at
the option of the Company, at any time prior to maturity at a conversion rate
of 32.979 shares per $1,000 principal amount of the 2.5% Notes. The 2.5%
Notes are redeemable, in whole or part, at the election of the Company any
time on or after July 1, 1997 initially at 104.2% of the principal amount
after July 1, 2003. As part of the 1996 CNN Transaction, the Company has
elected to (i) prepay the Promissory Notes of CNN at face value of $9.6
million and (ii) convert the 2.5% Notes into an aggregate of 156,650 shares
of Common Stock. The Company anticipates that CNN will elect to convert their
2.5% Notes into shares of the Common Stock. See "Recent Developments -- 1996
CNN Transaction."
Certain of the Company's subsidiaries, Arthur Levy Enterprises, Inc.,
Graham Offshore Inc. and SEACOR Offshore Inc. are parties (the "Borrowing
Subsidiaries") to the DnB Facility, with Den norske Bank A/S ("DnB") as
lender, and the Company as guarantor of the Borrowing Subsidiaries'
obligations thereunder. At March 31, 1996, $32.0 million principal amount of
borrowings were outstanding under the DnB Facility. Such borrowings were used
to finance the acquisition of offshore marine service vessels and other
related assets pursuant to the Graham Acquisition, to pay certain financing
and acquisition costs incurred in connection with the Graham Acquisition, and
to fund working capital requirements in respect of the acquired vessels.
Pursuant to the DnB Facility, the Borrowing Subsidiaries may borrow up to
$85.0 million aggregate principal amount (the "Maximum Committed Amount") of
senior secured revolving bridge loans any time prior to August 31, 1996 (the
"Initial Term"). At the Company's election, such loans, on or prior to August
31, 1996, may be converted into senior secured reducing revolving credit
loans maturing on August 31, 2003.
During the Initial Term outstanding borrowings bear interest at an annual
rate equal to 125 basis points above LIBOR (i.e., approximately 6.7% per
annum at March 31, 1996). If the Borrowing Subsidiaries elect to convert the
senior secured bridge loans to senior secured reducing revolving credit loans
(the "Term Loans"), the Maximum Committed Amount automatically will decrease
semiannually by certain percentages described in the DnB Facility. The DnB
Facility requires the Company, on a consolidated basis, to maintain a minimum
ratio of indebtedness to vessel value, as defined, a minimum cash and cash
equivalent level, and a specified debt service coverage ratio. The Company
also is prohibited from entering into additional indebtedness above a certain
level without consent. Pursuant to the DnB Facility, the Term Loans would
bear interest at the annual rate equal to a maximum of 150 basis points above
LIBOR.
Borrowings outstanding pursuant to the DnB Facility are secured by, among
other things, a guaranty by the Company of the obligations of the Borrowing
Subsidiaries, first preferred mortgages on vessels owned by the Borrowing
Subsidiaries, a negative pledge relating to certain vessels and an assignment
of earnings and certain contract rights with respect to vessels owned and
operated by the Borrowing Subsidiaries. If the Borrowing Subsidiaries
exercise the aforementioned conversion election, certain additional
subsidiaries of the Company will be required to guaranty the obligations of
the Borrowing Subsidiaries under the DnB Facility and provide mortgages on
additional vessels to secure such guaranty.
In December 1995, the Company completed a public offering of its Common
Stock and sold 1,612,500 shares at a price of $24.25 per share. The proceeds
received from this sale, net of underwriting discount, totaled $36.9 million.
The Company incurred $0.6 million in expenses associated with this stock
offering (other than underwriting discount). Additionally, in connection with
the NRC Merger, the Coastal/Phibro Transactions, and the 1995 CNN
Transaction, the Company issued 1,064,270 shares of Common Stock having an
aggregate value of $24.5 million at the time of issuance. In March 1993, the
Company issued 125,000 shares of Common Stock at $15.00 per share or $1.875
million pursuant to the acquisition of seven supply vessels.
42
<PAGE>
The Company's cash flow levels and operating revenues primarily are
determined by vessels' rates per day worked, overall vessel utilization, the
size of the Company's fleet, and the level of spill response activity.
Factors relating to the marine segment are affected directly by the
volatility of oil and gas prices, the level of offshore drilling and
exploration activity, and other factors beyond the Company's control.
Net cash provided by operating activities increased $6.3 million in the
three-month period ended March 31, 1996, compared to the three-month period
ended March 31, 1995. The increase was due primarily to an increase in the
marine business segment's direct vessel contribution (defined as operating
revenues net of direct vessel operating expenses). Direct vessel contribution
rose due primarily to a net increase in the number of owned or chartered-in
vessels, improved rates per day worked and utilization, and the termination
of bareboat charters for owned vessels. The Company's environmental business
segment also contributed to the increase in cash flows from operating
activities.
Net cash used in investing activities was $0.7 million in the three-month
period ended March 31, 1996; whereas, net cash was provided in investing
activities in the three-month period ended March 31, 1995. Capital
expenditures for property and equipment increased between comparable quarters
due primarily to improvements made to certain project and anchor handling
towing supply vessels and the purchase of oil spill response equipment.
Proceeds from the sale of vessels declined between comparable quarters as
vessels with lower market values were sold in 1996 compared to 1995. Further,
equity investments declined and cash acquired in a business combination did
not recur between comparable quarters.
The Company's net cash used in financing activities increased $5.2 million
in the three-month period ended March 31, 1996, compared to the three-month
period ended March 31, 1995. Payments of long-term debt increased between
comparable quarters due primarily to the repayment of $8.0 million of
principal under the DnB Facility. This increase was offset by a decline in
cash used to acquire 6.0% Notes.
CAPITAL EXPENDITURES
The Company may make selective acquisitions of marine vessels or fleets of
marine vessels and oil spill response equipment and/or expand the scope and
nature of its environmental services. The Company also may upgrade or enhance
its marine vessels to remain competitive in the marketplace. Management
anticipates that such expenditures would be funded through a combination of
cash flow provided by operations, existing cash balances and, potentially,
through the issuance of additional shares of Common Stock or additional
indebtedness.
In the twelve-month period ended December 31, 1995, the Company's
additions to property and equipment totaled $96.6 million and primarily
related to capital expenditures made by the marine segment. On September 15,
1995, the Graham Acquisition was completed for an aggregate purchase price of
$73.5 million that included $0.6 million in acquisition costs and $0.9
million in inventory. The Graham Acquisition included 83 utility, 37 crew and
seven supply vessels, and administrative offices, furniture, fixtures and
office equipment, vessel support facilities, vessel related spare parts, and
inventory. In November and December 1995, the Company completed a transaction
to acquire two anchor handling towing supply and three towing supply vessels
and other vessel related equipment from CNN for an aggregate purchase price
of $21.55 million of which $11.3 million was paid through the issuance of
Common Stock. Other additions to property and equipment, totaling $2.45
million, related primarily to $1.85 million and $0.6 million in capital
expenditures made by the marine and environmental business segments,
respectively. Other capital expenditures made by the marine segment related
primarily to improvements being incorporated aboard a vessel for well
stimulation service.
Expenditures for environmental compliance to modify marine segment vessels
have not been a significant component of the Company's capital budget.
NEW ACCOUNTING STANDARD
In 1995, Statement of Financial Accounting Standards No. 121 --"Accounting
for Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
of" was issued and require adoption by the Company in fiscal 1996. Management
believes that such adoption will not have a material effect on the Company's
financial statements taken as a whole.
43
<PAGE>
Also in 1995, Statement of Financial Accounting Standards No. 123 --
"Accounting for Stock-Based Compensation" (the "Statement") was issued which
establishes, among other things, financial accounting and reporting standards
for stock-based employee compensation plans. Entities may either adopt a
"fair value based method" of accounting for an employee stock option as
defined by the Statement or may continue to use accounting methods as
prescribed by APB Opinion No. 25, "Accounting for Stock Issued to Employees."
Entities electing to remain with the accounting in APB Opinion No. 25 are
required to make pro forma disclosures of net income and earnings per share
as if the fair value based method of accounting defined in the Statement had
been applied. The accounting requirements of the Statement are effective for
transactions entered into in fiscal years that begin after December 15, 1995.
The Company expects to continue following APB Opinion No. 25 and make
appropriate disclosures in the future in accordance with the Statement.
44
<PAGE>
BUSINESS
The Company is a major provider of offshore marine services to the oil and
gas exploration and production industry and is one of the leading providers
of oil spill response services to owners of tank vessels and oil storage,
processing and handling facilities. The Company operates a diversified fleet
of over 200 vessels primarily dedicated to servicing offshore oil and gas
exploration and production facilities in the U.S. Gulf of Mexico, the North
Sea, offshore West Africa and Mexico. The Company's offshore service vessels
deliver cargo and personnel to offshore installations, handle anchors for
drilling rigs and other marine equipment, support offshore construction and
maintenance work and provide standby safety support. The Company also
furnishes vessels for special projects such as well stimulation, seismic data
gathering, freight hauling and line handling.
In connection with its offshore marine services, the Company on December
7, 1995 entered into a joint venture, Energy Logistics, Inc. ("ELI"), with
Baker Energy, a unit of Michael Baker Corporation, a U.S. public company. ELI
offers logistics services for the offshore industry, including the
coordination and provision of marine, air and land transportation, materials
handling and storage, inventory control and "just in time" procurement.
The Company's environmental services business principally provides
contractual oil spill response services to those who store, transport,
produce or handle petroleum and certain other non-petroleum oils as required
by OPA 90 and various state regulations. The Company's services, provided
principally through its wholly owned subsidiary, NRC, include training for
and supervision of activities in response to oil spill emergencies and the
maintenance of specialized equipment for immediate deployment and spill
response. NRC has acted as the principal oil spill response contractor on
several of the largest oil spills that have occurred in the United States
since the enactment of OPA 90.
STRATEGY
The Company's strategy is to identify and pursue opportunities for growth,
development and integration of its offshore marine and environmental services
businesses. In its offshore marine services business, the Company seeks to be
innovative in meeting the long-term needs of its customers while managing the
short-term challenges characteristic of a volatile, global and
capital-intensive business. In its environmental services business, the
Company seeks to provide value-added services to its customers in the most
cost-efficient manner by capitalizing on its knowledge and experience in
planning for and responding to oil spill emergencies, its diversified fleet
of offshore marine service vessels and its extensive network of independent
contractors. A key element of the Company's strategy is the acquisition of
assets or businesses which expand the Company's markets, customer base and
services. The Company seeks to develop "total" customer relationships by
meeting its customers' vessel and environmental services needs on a global
basis.
OFFSHORE MARINE SERVICES. The Company's strategy is to pursue growth
opportunities while balancing its exposure to the cyclical nature of the oil
and gas exploration and production industry. The Company implements this
strategy by:
o DIVERSIFYING GEOGRAPHICALLY. The Company seeks to expand its
presence in multiple markets and thereby enhance asset utilization
by enabling it to deploy vessels to different geographic regions to
take advantage of cyclical market opportunities and better service
its customers' global operations.
o MAINTAINING A BALANCE BETWEEN LONG-TERM AND SHORT-TERM
CHARTERS. The Company seeks to maintain a balance between long-term
charters (i.e., those having a duration of one year or more from
inception), which increase asset utilization, enhance the
predictability of cash flows and facilitate the development of
lasting customer relationships, and short-term charters, which
provide the Company with the flexibility to take advantage of
improving market conditions and opportunities in different markets.
o BROADENING THE MIX OF VESSELS. The Company maintains a diversified
fleet of vessels which enables it to service a broad range of
customer requirements and provide services to both the exploration
and production sectors of the energy industry. The Graham
Acquisition significantly
45
<PAGE>
enhances the Company's ability to service offshore oil and gas
production related activities and materially enhances its
environmental response services.
o OFFERING SPECIALIZED SERVICES. The Company seeks to meet its
customers' needs through efficient use of vessels and logistical
systems. In conjunction with this strategy, the Company has
modified and converted vessels for special projects such as well
stimulation, seismic data gathering, standby safety support and
freight hauling.
ENVIRONMENTAL SERVICES. In its environmental services business, the
Company's strategy is to balance its exposure to the "event" driven nature of
its marine spill response business by expanding its core OPA 90 business and
developing and promoting ancillary environmental services. The Company
implements this strategy by:
o EXPANDING ITS SERVICES. The Company is committed to pursuing new
customer relationships and expanding its services by identifying,
developing and providing services ancillary to the requirements of
OPA 90. Ancillary services include environmental training programs,
standby oil spill response services and planning for oil spill
response drills.
o EXPANDING INTERNATIONALLY. The Company seeks to develop its oil
spill response and ancillary services businesses internationally by
capitalizing on its knowledge and experience, existing customer
relationships and rapid equipment deployment capability.
o DIVERSIFYING ITS CUSTOMER BASE. The Company seeks to expand its
sources of retainer revenues by actively marketing its
environmental services to vessel owners, facilities and others who
must comply with various state and federal planning regulations but
who are not covered by the requirements of OPA 90.
o MAINTAINING A COST-EFFECTIVE SPILL RESPONSE NETWORK. The Company
maintains a highly efficient and cost-effective spill response
network by coordinating and managing existing resources and
supplementing them with a variety of purpose-built equipment. The
Company's network of over 50 independent spill response contractors
stores and maintains NRC's equipment in a constant state of
preparedness and provides trained personnel and resources in the
event of a spill.
OFFSHORE MARINE SERVICES
GEOGRAPHIC MARKETS SERVICED
The operations of the Company's offshore marine services business are
concentrated in four geographic markets: the United States (principally, the
U.S. Gulf of Mexico), offshore West Africa, the North Sea and Mexico. The
table below sets forth, at the dates indicated, the number of vessels
operated directly by the Company or through its joint ventures and pooling
arrangements in each geographic market.
<TABLE>
<CAPTION>
AT DECEMBER 31, AT MARCH 31,
----------------------
GEOGRAPHIC MARKET 1993 1994 1995 1996(1)
------ ------ ------ --------------
<S> <C> <C> <C> <C>
Domestic(2) ........... 36 38 155 152
Foreign:(3)
Offshore West Africa 15 20 25 26
North Sea ............ 11 11 15 15
Mexico ............... 5 10 10 10
Other(4) ............. 6 4 3 3
------ ------ ------ --------------
Total Foreign ...... 37 45 53 54
</TABLE>
- ------------
(1) Does not include 36 crew vessels and five utility vessels acquired in
May 1996 pursuant to the McCall Acquisition and the acquisition of six
vessels as contemplated in the 1996 CNN Transaction. Since March 31,
1996, the Company has sold three utility vessels.
(2) Excludes 11 and 12 oil spill response vessels at December 31, 1995 and
March 31, 1996, respectively.
(3) Foreign vessels include those operated from foreign shore bases and
those which are used primarily in foreign operations.
(4) Includes vessels operating in the Arabian Gulf and Australia.
46
<PAGE>
U.S. GULF OF MEXICO. The Company is a major provider of offshore marine
services to the oil and gas exploration and production industry in this
market. Exploration activity, including recent trends to drill in deeper
water in the U.S. Gulf of Mexico, is generally supported by larger supply,
towing supply, and anchor handling towing supply vessels. At March 31, 1996,
the Company operated 37 of approximately 280 of these larger vessels
currently in the U.S. Gulf of Mexico. Production activity is supported by
similar vessels as well as smaller crew and utility vessels. At March 31,
1996, the Company operated 111 of approximately 500 estimated crew and
utility vessels in the U.S. Gulf of Mexico. The Company also operates seven
specially equipped vessels for customers who provide well stimulation and
seismic data gathering services.
Exploration and drilling activity in the U.S. Gulf of Mexico, which
affects the demand for vessels, is largely a function of the short-term and
long-term trends in the levels of oil and gas prices. Demand for vessels in
the U.S. Gulf of Mexico has increased recently due to increased drilling
activity associated with natural gas exploration and production, deepwater
drilling and rig workover projects. There can be no assurance that this trend
will continue.
OFFSHORE WEST AFRICA. The Company is one of the largest operators
servicing Nigeria and other areas along the West African coast. At March 31,
1996, the Company operated 26 of the approximately 150 offshore support
vessels operating in this market. The number of operators is more
concentrated in this market as compared to the U.S. Gulf of Mexico in that
five companies operate almost all of the vessels currently active in the
region.
The need for offshore support vessels in this market is primarily
dependent upon multi-year offshore oil and gas exploration and development
projects and production support. The demand for vessels in offshore West
Africa has increased over the past year. However, the region is highly
dependent on the level of activity in Nigeria and recent political
developments could have an adverse effect on exploration and development
activity, which in turn would adversely impact the Company's operations in
this market.
NORTH SEA. The Company provides standby safety services to customers in
the North Sea. At March 31, 1996, there were approximately 150 vessels in
this market certified to provide this service and the Company owns and
operates 10 of these vessels. Five additional vessels are marketed by the
Company under a pooling arrangement with a U.K. company. Demand in this
market for standby safety service developed in 1992 after the United Kingdom
promulgated increased safety legislation requiring offshore operations to
maintain standby safety vessels. The legislation generally requires a vessel
to "stand by" to provide a means of evacuation and rescue for platform and
rig personnel in the event of an emergency at an offshore installation. The
Company believes that it was one of the first companies to convert its
existing vessels for use as standby safety service vessels.
Demand for standby safety vessels in the North Sea declined steadily over
the last two years as drilling activity was scaled back due to a decline in
oil prices, tax law changes, and a surplus of certified vessels. However,
since mid-1995, demand has improved with increased exploration activity,
stimulated in part by updated exploration technology and the development of
new drilling areas west of the Shetland Islands.
MEXICO. The Company provides offshore marine services for both exploration
and production activities in Mexico. Of the approximately 75 offshore support
vessels operating in this region at March 31, 1996, 10 were owned and
operated by a joint venture with a Mexican company. See "Joint Ventures and
Pooling Arrangements."
While operating conditions in Mexico are, in many respects, similar to
those in the U.S. Gulf of Mexico, demand for offshore support vessels in
Mexico historically has been affected to a significant degree by Mexican
government policies, particularly those relating to Petroleos Mexicanos
("PEMEX"), the Mexican national oil company. Offshore exploration and
production activity has been level for most of the past year as a result of
political and fiscal changes. While there can be no assurance, the Company
anticipates that these changes will result in increased exploration and
production maintenance activity in future periods.
47
<PAGE>
FLEET
The offshore marine service industry supplies vessels to owners and
operators of offshore drilling rigs and production platforms. One of the
largest groups of offshore support vessels which the Company operates is
supply vessels, which transport drill pipe, drilling fluids and construction
materials. Another significant class of vessels operated by the Company is
towing supply and anchor handling towing supply vessels. These vessels have
more powerful engines, a deck mounted winch and are capable of towing and
positioning offshore drilling rigs as well as providing supply vessel
services. Other large groups of vessels operated by the Company include crew
boats which transport personnel and small loads of cargo when expedited
delivery is required and utility boats which support offshore production by
delivering general cargo and facilitating infield transportation of personnel
and materials. The Company also operates special service vessels which
include well stimulation, seismic data gathering, line handling, freight, oil
spill response vessels and standby safety vessels. As of March 31, 1996, the
average age of the Company's offshore marine fleet was approximately 14
years.
The following table sets forth, at the dates indicated, certain summary
fleet information for the Company. For a description of these types of
vessels, see "Glossary of Selected Industry Terms."
<TABLE>
<CAPTION>
AT DECEMBER 31,
---------------------- AT MARCH 31,
TYPE OF VESSEL 1993 1994 1995 1996(1)
------ ------ ------ --------------
<S> <C> <C> <C> <C>
Supply/Towing supply ............ 40 46 52 52
Anchor Handling Towing Supply .. 8 11 10 11
Crew ............................ 3 2 41 41
Project and Geophysical/Freight 9 9 9 9
Standby Safety .................. 11 11 15 15
Utility/Line Handling ........... 2 4 81 78
------ ------ ------ --------------
Total Fleet ..................... 73 83 208 206(2)
====== ====== ====== ==============
</TABLE>
- ------------
(1) Does not include 36 crew vessels and five utility vessels acquired in
May 1996 pursuant to the McCall Acquisition, and the acquisition of six
vessels in the 1996 CNN Transaction. Since March 31, 1996, the Company
has sold three utility vessels.
(2) Includes 186 vessels owned by the Company and 20 vessels that are not
Company owned. Of the 20 vessels that are not Company owned, 5 are
operated under pooling arrangements with Company owned vessels, 12 are
in joint ventures in which the Company has an interest and three are
bareboat or time chartered-in by the Company for use in its operations.
Effective June 1, 1996, one of the Company's joint ventures was
terminated, and two vessels that participated therein were acquired in
the McCall Acquisition.
The Graham Acquisition and McCall Acquisition significantly increased the
number of vessels owned by the Company. Many of these vessels are easily
adaptable to serve various purposes. In particular, these vessels are
available for use by the Company in its environmental services business. See
"-- Environmental Services." In addition to the Graham Acquisition and the
Company's sale of certain vessels acquired in that transaction, the Company
actively monitors opportunities to buy and sell vessels that will maximize
the overall utility and flexibility of its fleet structure. Since March 31,
1996, the Company has sold three utility vessels.
JOINT VENTURES AND POOLING ARRANGEMENTS
The Company has formed joint ventures and entered into pooling
arrangements with various third parties to enter new markets, enhance its
marketing capabilities and facilitate operations in certain foreign markets.
These arrangements allow the Company to expand its fleet and minimize the
risks and capital outlays associated with independent fleet expansion. The
principal joint venture and pooling arrangements in the various geographic
areas in which the Company operates are described below.
MEXICO. All of the Company's vessel operations in Mexico are conducted
with TMM through the TMM Joint Venture. The fleet currently is comprised of
nine vessels owned by the TMM Joint Venture
48
<PAGE>
and one vessel bareboat chartered to it by the Company. The TMM Joint Venture
has enabled the Company to expand into a new market contiguous to the U.S.
Gulf of Mexico and has provided greater marketing flexibility for the
Company's fleet in the region.
OFFSHORE WEST AFRICA. From January 1, 1994 through September 30, 1995, all
of the Company's vessels operating in offshore West Africa were managed under
a pooling agreement by SEAFISH Ltd. ("SEAFISH"), a Bahamian corporation. The
pool enabled the Company to expand into new markets and broaden its marketing
capabilities by coordinating a larger fleet. Under the terms of the pooling
arrangement, revenue and expenses of certain vessels owned and operated by
the Company and certain vessels owned and operated by CNN were pooled and the
net pool results were shared by both parties equally after giving effect to
certain preference payments. Pursuant to the 1995 CNN Transaction, the
pooling arrangement was terminated effective as of October 1, 1995. The
Company's vessels which were formerly pooled will be managed by FISH, a
French company in which the Company and CNN will each own a 50% interest.
In August 1995, the Company formed a Louisiana limited liability company
in which it and another U.S. operator each own a 50% interest ("SEAMAC"). The
limited liability company was formed to mobilize two large crew vessels from
the U.S. Gulf of Mexico to offshore West Africa. The vessels are operating
under the Company's management arrangements with West Africa Offshore, Ltd.,
a Nigerian company ("WAO"), and FISH. Pursuant to the McCall Acquisition, the
Company acquired the 50% interest in SEAMAC that it did not already own.
NORTH SEA. Standby safety vessels operated by the Company in the North Sea
are owned or chartered-in by the Company's subsidiary, VEESEA Holdings, Inc.
("VEESEA Holdings") and its subsidiaries (collectively, "VEESEA"). All
vessels operated by the Company in the North Sea are managed under an
arrangement with Vector Offshore Limited, a U.K. company ("Vector"), which
owns a 9% interest in VEESEA Holdings.
The Company's joint venture arrangement with Vector enabled it to enter a
niche market using local management and an existing infrastructure. The
Company's fleet of standby safety vessels has grown from one vessel in
December 1991 to ten vessels in service today.
In addition, in January 1995, the Company entered into the SEAVEC Pool, a
pooling arrangement with Toisa Ltd., a U.K. offshore marine transportation
and services company ("Toisa"). Under this pooling arrangement, the Company
and Toisa jointly market their standby safety vessels in the North Sea
market, with operating revenues pooled and allocated to the respective
companies pursuant to a formula based on the class of vessels each company
contributes to the pool. SEAVEC currently markets 15 vessels.
CUSTOMERS
The Company offers offshore marine services primarily to the major
integrated oil companies and large independent oil and gas exploration and
production companies. The Company has enjoyed long-standing relationships
with several of its customers with whom the Company has sought to establish
alliances. The percentage of revenues attributable to an individual customer
varies from time to time, depending on the level of oil and gas exploration
undertaken by a particular customer, the suitability of the Company's vessels
for the customer's projects, and other factors, many of which are beyond the
Company's control. For the year ended December 31, 1995, approximately 19.5%
and 14.8% of the Company's marine operating revenues were received from Mobil
Oil Corporation and Conoco, Inc., respectively. For the fiscal year ended
December 31, 1994, these same companies each accounted for 17.7% and 18.7%,
respectively, of the Company's marine operating revenues.
CHARTER TERMS
Customers generally award charters based on suitability and availability
of equipment, price and reputation for quality service. Consistent with
industry practice, the Company's U.S. Gulf of Mexico fleet is utilized
primarily in the "spot" market pursuant to short-term charters at varying day
rates. Generally, such short-term charters can be terminated by either the
Company or its customer upon notice of five days or less.
49
<PAGE>
The Company's operations in the North Sea, offshore West Africa and Mexico
are typically conducted pursuant to long-term charters although these
charters are subject to early termination by the customer with varying notice
requirements. Long-term charters are defined as those having a term of one
year or more at inception. In addition, the Company has chartered-out, on a
long-term basis, certain special project vessels engaged in well stimulation,
seismic data gathering and freight hauling.
COMPETITION
The offshore marine transportation industry is highly competitive. In
addition to price, service and reputation, the principal competitive factors
for offshore supply fleets include the existence of national flag preference,
operating conditions and intended use (all of which determine the suitability
of vessel types), complexity of maintaining logistical support and the cost
of transferring equipment from one market to another.
Several of the Company's competitors may have significantly greater
financial and other resources than the Company. While there are many
suppliers of marine offshore services, management believes there is only one
company, Tidewater, Inc., which operates in all geographic markets and has a
substantial percentage of the domestic and foreign offshore marine market in
relation to that of the Company and its other competitors.
GOVERNMENT REGULATION
DOMESTIC REGULATION. The Company's operations are subject to significant
federal, state and local regulations, as well as international conventions.
The Company's domestically registered vessels are subject to the jurisdiction
of the Coast Guard, the National Transportation Safety Board, the U.S.
Customs Service and the U.S. Maritime Administration, as well as subject to
rules of private industry organizations such as the American Bureau of
Shipping. These agencies and organizations establish safety standards, are
authorized to investigate vessels and accidents and to recommend improved
maritime safety standards. Moreover, to ensure compliance with applicable
safety regulations, the Coast Guard is authorized to inspect vessels at will.
The Company is also subject to the Shipping Act, 1916, as amended (the
"Shipping Act"), and the Merchant Marine Act of 1920, as amended (the "1920
Act," and collectively with the Shipping Act, the "Acts"), which govern,
among other things, the ownership and operation of vessels used to carry
cargo between U.S. ports. The Acts require that vessels engaged in the U.S.
coastwise trade be (i) owned by U.S. citizens and (ii) built in the United
States. For a corporation engaged in the U.S. coastwise trade to be deemed a
citizen of the U.S., (a) the corporation must be organized under the laws of
the U.S. or of a state, territory or possession thereof, (b) each of the
president or other chief executive officer and the chairman of the board of
directors of such corporation must be U.S. citizens, (c) no more than a
minority of the number of directors of such corporation necessary to
constitute a quorum for the transaction of business can be non-U.S. citizens
and (d) at least 75% of the interest in such corporation must be owned by
U.S. "Citizens" (as defined in the Acts). Should the Company fail to comply
with the U.S. citizenship requirements of the Acts, it would be prohibited
from operating its vessels in the U.S. coastwise trade during the period of
such non-compliance.
To facilitate compliance with the Acts, the Company's Certificate of
Incorporation: (i) contains provisions limiting the aggregate percentage
ownership by Foreigners of any class of the Company's capital stock
(including the Common Stock) to 22.5% of the outstanding shares of each such
class to ensure that such foreign ownership will not exceed the maximum
percentage permitted by applicable maritime law (presently 25.0%), and
authorizes the Board of Directors, under certain circumstances, to increase
the foregoing percentage to 24.0%, (ii) requires institution of a dual stock
certification system to help determine such ownership and (iii) permits the
Board of Directors to make such determinations as reasonably may be necessary
to ascertain such ownership and implement such limitations. In addition, the
Company's By-laws provide that the number of foreign directors shall not
exceed a minority of the number necessary to constitute a quorum for the
transaction of business and restrict any officer who is not a U.S. citizen
from acting in the absence or disability of the Chairman of the Board of
Directors and Chief Executive Officer and the President, all of whom must be
U.S. citizens. At March 31, 1996, approximately 6.1% of the outstanding
Common Stock was owned by Foreigners.
50
<PAGE>
FOREIGN REGULATION. The Company, through its subsidiaries, joint ventures
and pooling arrangements operates vessels registered in the following foreign
jurisdictions: St. Vincent and the Grenadines, Vanuatu, Hong Kong, the Cayman
Islands, France and Mexico. The Company's vessels registered in these
jurisdictions are subject to the laws of the applicable jurisdiction as to
ownership, registration, manning and safety of vessels. In addition, the
vessels are subject to the requirements of a number of international
conventions to which the jurisdiction (where the vessels are registered) are
parties. Among the more significant of these conventions are: (i) the 1978
Protocol Relating to the International Convention for the Prevention of
Pollution from Ships; (ii) the International Convention on the Safety of Life
at Sea, 1974 and 1978 Protocol; and (iii) the International Convention on
Standards of Training, Certification and Watchkeeping for Seafarers, 1978.
The Company believes that its vessels registered in these foreign
jurisdictions are in compliance with all applicable material regulations and
have all licenses necessary to conduct their business. In addition, vessels
operated as standby safety vessels in the North Sea are subject to the
requirements of the Department of Transport of the U.K. pursuant to the U.K.
Safety Act.
ENVIRONMENTAL REGULATION. The Company's vessels routinely transport diesel
fuel to offshore rigs and platforms and carry diesel fuel for their own use,
transport certain bulk chemical materials used in drilling activities, and
transport liquid mud which contains oil and oil by-products. These operations
are subject to a variety of federal and analogous state statutes concerning
matters of environmental protection. Statutes and regulations that govern the
discharge of oil onto navigable waters include OPA 90 and the Clean Water
Act. The Clean Water Act imposes substantial potential liability for the
costs of remediating releases of petroleum and other substances in reportable
quantities. State laws analogous to the Clean Water Act also specifically
address the accidental release of petroleum in reportable quantities.
Although OPA 90, which amended the Clean Water Act, increased the limits
on liability for oil discharges at sea, such limits do not apply in certain
listed circumstances. In addition, some states have enacted legislation
providing for unlimited liability under state law for oil spills occurring
within their boundaries. Other environmental statutes and regulations
governing Company operations include, among other things, the Resource
Conservation and Recovery Act, as amended, which regulates the generation,
transportation, storage, and disposal of on-shore hazardous and non-hazardous
wastes; the Comprehensive Environmental Response, Compensation and Liability
Act, as amended, which imposes strict, joint, and several liability for the
costs of remediating historical environmental contamination; and the Outer
Continental Shelf Lands Act, as amended ("OCSLA"), which regulates oil and
gas exploration and production activities on the Outer Continental Shelf.
OCSLA provides the federal government with broad discretion in regulating
the leasing of offshore resources for the production of oil and gas. Because
the Company's operations rely on offshore oil and gas exploration and
production, the government's exercise of OCSLA authority to restrict the
availability of offshore oil and gas leases could have a material adverse
effect on the Company's financial condition and results of operations.
In addition to these federal laws, state and local laws and regulations
subject the Company to various requirements governing waste disposal and
water and air pollution.
ENVIRONMENTAL SERVICES
MARKET
The Company's environmental services business is operated through NRC and
provides contractual oil spill response services to those who store,
transport, produce or handle petroleum and certain other non-petroleum oils
as required by OPA 90. The market for marine spill response retainer services
has grown substantially since 1990 when the United States Congress passed OPA
90 after the Exxon Valdez spill in Alaska. OPA 90 requires that all tank
vessels operating within the Exclusive Economic Zone of the United States and
all facilities and pipelines handling oil that could have a spill impacting
the navigable waters of the United States, develop a plan to respond to a
"worst case" oil spill and ensure by contract or other approved means the
ability to respond to such a spill.
The Company formed NRC in 1991 in partnership with Miller Environmental
Group ("MEG") , a New York based environmental response corporation, in
response to the enactment of OPA 90 and the
51
<PAGE>
regulations subsequently developed by the Coast Guard. In March and October
1995, respectively, the Company purchased the remaining interest of its
partners in NRC and the equity participation rights of NRC's two founding
customers. See "1995 Transactions -- NRC Merger."
EQUIPMENT AND SERVICES
OIL SPILL RESPONSE SERVICES. The Company owns and maintains specialized
equipment which is positioned in designated areas to comply with regulations
promulgated by the Coast Guard, and also has personnel trained to respond to
oil spills as required by customers and regulations. This specialized oil
spill response equipment includes containment boom, used to protect sensitive
areas and also to trap oil in areas where it can be recovered, pumps, vacuum
transfer units, skimmers, portable barges, mobile command centers equipped
with field communications capability, small boats for deploying boom, and
barges and utility vessels outfitted with skimming equipment to recover oil.
When an oil spill occurs, the Company mobilizes this equipment, using
either its own personnel or personnel under contract, to provide emergency
response services for both land and marine oil spills and also to offer
industrial maintenance services. The Company currently has agreements with
approximately 50 independent oil spill response contractors through a network
organized by the Company. The network is assisted by NRC's regional offices
in Texas, Florida, Tennessee and Puerto Rico, and by NRC's access to the
Company's offshore marine vessels and operating bases, particularly the
Graham and McCall vessels operating in the U.S. Gulf of Mexico. NRC maintains
constant contact with its network members through client drills, training
sessions, standby services and actual oil spill responses. The drills are
mandated by OPA 90 and ensure a constant state of response readiness. NRC has
acted as the principal contractor on several of the largest oil spills that
have occurred in the United States after the enactment of OPA 90.
NRC has expanded its coverage area to include the West Coast of the United
States through Clean Pacific Alliance ("CPA"), a joint venture between NRC
and Crowley Marine Services. CPA has established dedicated oil spill response
capabilities including two response vessels, response depots, a contractually
available Marine Response Network, and a client service center.
The table below sets forth certain summary information regarding the
Company's oil spill response resources at December 31, 1995 and March 31,
1996.
<TABLE>
<CAPTION>
AT DECEMBER 31,
1995(1) AT MARCH 31, 1996(1)
-------------------- --------------------
<S> <C> <C>
Certified Oil Spill Response Vessels(2) .... 12 13
Support Vessels(3) .......................... 167 164
Shallow Water Recovery Barges ............... 60 58
Mobile Trailers ............................. 119 141
Vacuum Transfer Units ....................... 37 37
Mobile Communications Centers ............... 3 3
Containment Boom ............................ 150,000 ft 150,000 ft
Skimming Capacity ........................... 952,027 bbls/day 821,108 bbls/day
Temporary Storage ........................... 250,000 bbls 181,167 bbls
</TABLE>
- ------------
(1) Does not include resources owned by the Company's network of
independent spill response contractors or by the Clean Pacific
Alliance.
(2) At March 31, 1996, included five oil spill response vessels and seven
oil spill response barges owned by the Company and one oil spill
response barge which is chartered-in by the Company.
(3) At March 31, 1996, includes 12 twenty-eight foot boom handling vessels
and 152 vessels operated by the Company in the offshore marine services
business.
TRAINING AND DRILL SERVICES. The Company has developed customized training
programs for industrial companies which educate personnel on the risks
associated with and the prevention of and response to marine and non-marine
oil spills. The Company also plans for and participates in customer oil spill
response drill programs. The Company's drill services and training programs
are offered both on a stand-alone basis and as part of its base retainer
services.
52
<PAGE>
INTERNATIONAL. The Company has also established International Response
Corporation ("IRC"), a wholly owned subsidiary, to evaluate international
opportunities with respect to its environmental services business. IRC is
currently providing consulting services connection with their evaluation of
the feasibility of constructing waste oil, waste water and sludge reception
facilities in Malaysia and Thailand.
CUSTOMERS AND CONTRACT ARRANGEMENTS
The Company offers its retainer services and oil spill response services
primarily to the domestic and international shipping community, including dry
cargo vessel owners and owners of facilities such as refineries, pipelines,
exploration and production platforms, and tank terminals. In addition to its
retainer customers, the Company also provides oil spill response services to
others, including, under certain circumstances, the Coast Guard. The Company
presently has approximately 325 customers and provides retainer coverage to
approximately 1,800 tank vessels, 850 barges and 350 facilities. The
Company's retainer arrangements with these customers include both short-term
contracts (one year or less) and long-term agreements, in some cases as long
as seven years. For the year ended December 31, 1995, Coastal and Phibro,
NRC's two largest customers, accounted for 28.6% of NRC's retainer revenues
collectively. Pursuant to the terms of the Coastal/Phibro Transactions, the
arrangements with these customers were modified. See "1995 Transactions --
Coastal/Phibro Transactions."
The Company also generates revenue from the supervision of activities in
response to oil spill emergencies. The Company's revenue can be dramatically
impacted by the level of spill activity. A single large spill can contribute
significantly to overall revenues and to operating income. However, the
Company is unable to predict revenues from oil spills.
COMPETITION
The principal competitive factors in the environmental response business
are price, service, reputation, experience and operating capabilities.
Management believes that the lack of uniformity of regulatory development and
enforcement on a federal and state level has created a lower barrier to entry
in several market segments which has increased the number of competitors. NRC
faces competition from the Marine Spill Response Corporation, (a non-profit
corporation funded by the major integrated oil companies), other industry
cooperatives, and also from smaller contractors who target specific market
niches.
GOVERNMENT REGULATION
The Coast Guard classifies Oil Spill Removal Organizations ("OSROs") based
on their overall capability of responding to different types and sizes of oil
spills. In November 1993, NRC received classification as a Level E OSRO, the
most advanced level of OSRO classification. NRC's classification expires in
November 1996. The Coast Guard may review NRC's classification at any time,
based on NRC's performance of its response and clean-up activities and may,
under certain circumstances, amend or revoke such classification. In
September 1995, the Coast Guard proposed revised guidelines for classifying
Oil Spill Removal Organizations. On December 28, 1995, the revised OSRO
guidelines were published. Significant revisions include geographics-specific
classifications, proof of subcontractor support and more stringent oversight
by the Coast Guard. NRC has reapplied for new classification under the
revised guidelines. Although NRC expects to receive an interim classification
in July 1996, the Coast Guard must verify the information in the application
and there can be no assurance that NRC will receive a final classification or
a final classification equivalent to its current classification.
In addition to the Coast Guard, the Environmental Protection Agency, the
Minerals Management Service division of the Department of Interior, and
individual states regulate vessels, facilities and pipelines in accordance
with the requirements of OPA 90 or under analogous state law. There is
currently little uniformity among the regulations issued by these agencies.
When responding to third-party oil spills, the Company enjoys federal, and
in some states, state immunity from imposition of liability for any spills
that result from the Company's response efforts, except if the Company is
found to be grossly negligent or to have engaged in willful misconduct or if
the Company was not engaged in response activities. NRC maintains insurance
coverage against such claims arising from its response operations. It
considers the limits of liability adequate, although there can be no
assurance that such coverage will be sufficient to cover future claims which
may arise.
53
<PAGE>
MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
Set forth below is certain information regarding the executive officers
and directors of SEACOR Holdings, Inc.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------ ----- -----------------------------------------
<S> <C> <C>
Charles Fabrikant 51 Chairman of the Board of Directors,
President and Chief Executive Officer
Randall Blank 46 Executive Vice President, Chief Financial
Officer and Secretary
Milton Rose 51 Vice President
Mark Miller 35 Vice President
Timothy McKeand 46 Vice President
Anthony R. Jones 49 Vice President
Keith Gregory 56 Vice President
Lenny P. Dantin 43 Vice President and Treasurer
Granville E. Conway 69 Director
Michael E. Gellert 64 Director
Robert J. Pierot 66 Director
Stephen Stamas 65 Director
Pierre de Demandolx 55 Director
Richard M. Fairbanks III 55 Director
</TABLE>
Charles Fabrikant has been Chairman of the Board and Chief Executive
Officer of SEACOR since December 1989, and has served as a director of
SEACOR's subsidiaries since December 1989. He has been President of SEACOR
since October 1992. For more than the past five years, Mr. Fabrikant has been
the Chairman of the Board and Chief Executive Officer of SCF Corporation
("SCF") and President of Fabrikant International Corporation ("FIC"), each a
privately owned corporation engaged in marine operations and investments.
Since January 1992, Mr. Fabrikant has been Chairman of the Board of NRC.
Since December 1993, Mr. Fabrikant has been a director of SEAFISH Ltd. Each
of SCF and FIC may be deemed to be an affiliate of the Company. Mr. Fabrikant
is a licensed attorney admitted to practice in the State of New York and in
the District of Columbia.
Randall Blank has been Executive Vice President and Chief Financial
Officer of SEACOR since December 1989 and has been the Secretary since
October 1992. Since June 1994, Mr. Blank has been Chief Financial Officer and
Vice President of NRC. From December 1989 to October 1992, Mr. Blank was
Treasurer of SEACOR. In addition, Mr. Blank has been a director of certain of
the Company's subsidiaries since January 1990 and, since December 1993, he
has been a director of SEAFISH. Since 1986, Mr. Blank has served as President
and Chief Operating Officer of SCF.
Milton Rose has been Vice President of SEACOR and President and Chief
Operating Officer of SEACOR Marine, Inc. since January 1993. In addition,
since January 1993, Mr. Rose has been a director of certain of SEACOR's
subsidiaries. Since 1994, he has been a director of one of the companies
comprising the TMM Joint Venture. From 1985 to January 1993, Mr. Rose was
Vice President-Marine Division for Bay Houston Towing Company. Previously,
Mr. Rose served for 12 years as an executive of Zapata Gulf Marine.
54
<PAGE>
Mark Miller has been Vice President of SEACOR since November 1995, and
President and Chief Operating Officer of NRC since November 1992. Since 1992,
Mr. Miller has been a director of certain of NRC's subsidiaries. From 1988 to
1991, Mr. Miller was the Director of Operations for MEG, an environmental
services contractor. Previously, Mr. Miller served for five years as a marine
insurance executive at McDonough and Caperton Insurance Group with
assignments in London, New York and West Virginia.
Timothy McKeand has been Vice President of SEACOR since March 1990 and,
since January 1990, has been Vice President and a director of certain of
SEACOR's subsidiaries which are active in domestic operations. From June 1989
until December 1989, Mr. McKeand was Division Vice President of the U.S. Gulf
of Mexico operations of Nicor Marine Inc. ("NMI"). From April 1981 until June
1989, Mr. McKeand was Vice President of Operations of NMI.
Anthony R. Jones has been Vice President of SEACOR since June 1992 and has
been Vice President-Operations of certain of SEACOR's subsidiaries since
October 1991. Prior to joining SEACOR in October 1991, Mr. Jones had been
Operations Director-North America for Zapata Gulf Marine Corporation since
1988 and Division Manager for that company in the Far East, Europe, West
Africa and South America for varied terms since 1976.
Keith Gregory, except for a three-month period in 1992, has been Vice
President of SEACOR since March 1991 and has been Vice President and director
of certain of SEACOR's subsidiaries which are active in international
operations and special projects since January 1990. Mr. Gregory was employed
by NMI in September 1981, and from January 1983 until December 1989, Mr.
Gregory was a Vice President of NMI. Prior to joining NMI in 1981, Mr.
Gregory had more than seven years of experience in overseas sales and vessel
operations with Zapata Marine Services Inc.
Lenny P. Dantin has been Vice President of SEACOR since March 1991,
Treasurer since October 1992, and has been Vice President and the Secretary,
Treasurer and a director of certain SEACOR's subsidiaries since January 1990.
Also, since 1994, Mr. Dantin has been a director of one of the companies
comprising the TMM Joint Venture. From January 1988 until December 1989, Mr.
Dantin was a Vice President and the Secretary and Treasurer of NMI. From
October 1985 until January 1988, Mr. Dantin was the General Manager of Nicor
National Louisiana, Inc., a NMI shipyard affiliate ("NNL"), and from January
1985 until October 1985, Mr. Dantin was the Assistant General Manager of NNL.
Granville E. Conway is President and Chief Executive Officer of
Cosmopolitan Shipping Co. Inc. ("Cosmopolitan"). Mr. Conway has been employed
by Cosmopolitan since March 1950 and is a graduate of the U.S. Merchant
Marine Academy. Mr. Conway was President of the Company from December 1989 to
October 1992. Since January 1992, Mr. Conway has been a director of NRC. Mr.
Conway has been a director of SEACOR since December 1989.
Michael E. Gellert is one of two general partners of Windcrest Partners,
L.P., a New York limited partnership. Mr. Gellert has been a director of SCF
since 1984 and is currently a director of the following public corporations:
Premier Parks Inc., Devon Energy Corp., The Harvey Group Inc., Humana Inc.,
and Regal Cinemas, Inc. Since January 1992, Mr. Gellert has been a director
of NRC. Mr. Gellert has been a director of SEACOR since December 1989.
Robert J. Pierot is President of Pier Shipping Corp., a private
corporation engaged in debt and equity investments. Mr. Pierot was President
of Jacq. Pierot Jr. & Sons, Inc., a private corporation engaged in marine
brokerage and marine appraisals, until 1987. Mr. Pierot also serves as
Assistant Secretary of Pierot Enterprises, Inc., a closely held corporation
engaged in marine and other investments. Until 1994, Mr. Pierot was a member
of the Board of Advisors of Nedship International, Inc., a wholly owned
subsidiary of Nederlandse Scheepshypoteekbank N.V. Mr. Pierot has been a
director of SEACOR since December 1989.
Stephen Stamas was an employee of Exxon Corporation from February 1960
until August 1986, where he served in a number of financial, corporate and
public affairs positions. He retired from Exxon as a Vice President. He is
currently Chairman of the New York Philharmonic and serves on the boards of
Lincoln Center for the Performing Arts, Rockefeller University and the
American Assembly at Columbia University. He is also currently a director of
BNY Hamilton Funds, Inc. Mr. Stamas has been a director of SEACOR since
December 1992.
55
<PAGE>
Pierre de Demandolx is a Director of CNN, a Paris based public company
belonging to Worms & Cie and President of Heli-Union, a wholly owned
subsidiary of CNN. He was also Chairman of FISH, a position which he held
from 1986 to 1996. Mr. de Demandolx joined Worms & Cie in 1984, holding
various positions in the shipping division. From 1976 to 1983, he was Chief
Executive Officer of the French Shipowners Association. Since December 1993,
he has also served as Chairman of the Board of SEAFISH Ltd. Mr. Demandolx has
been a director of SEACOR since December 1993.
Richard M. Fairbanks III is currently Managing Director for Domestic and
International Issues at the Center for Strategic and International Studies in
Washington, D.C. From February 1992 until March 1994, he was Senior Counsel
in the Washington, D.C. office of Paul, Hastings, Janofsky & Walker (a law
partnership). From September 1985 to February 1992, he was Managing Partner
of that office. Mr. Fairbanks is also a director and a member of the audit
and finance committees of Hercules Incorporated. He formerly served as an
Ambassador-at-Large for the United States and was International Chairman of
the Pacific Economic Cooperation Council. Mr. Fairbanks is admitted to
practice law in the District of Columbia and before the United States Supreme
Court. Mr. Fairbanks has been a director of SEACOR since April 1994.
56
<PAGE>
SELLING STOCKHOLDERS
The table below sets forth certain information regarding the beneficial
ownership of Common Stock by each Selling Stockholder prior to the Offering
and as adjusted to give effect to the consummation of the Offering. See
"Underwriting."
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
AT JUNE 4, 1996(1) AFTER OFFERING(2)
----------------------- -----------------------
NUMBER OF
SHARES COVERED
NUMBER OF PERCENT OF BY THIS NUMBER OF PERCENT OF
SELLING STOCKHOLDERS SHARES CLASS PROSPECTUS SHARES CLASS
- ------------------------------------ ----------- ---------- --------------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Compagnie Nationale de Navigation(3)
50 Boulevard Haussmann
Paris, France 75009 ................ 616,598 7.07% 616,598 -- --%
Coastal Refining & Marketing, Inc. . 155,757 1.82% 155,757 -- --%
Charles Fabrikant(4)
c/o SEACOR Holdings, Inc.
11200 Westheimer
Suite 850
Houston, TX 77042 .................. 605,333 6.95 50,000 555,333 5.78
Donald Toenshoff
39 Wood Land Road
Miller Place, NY 11789 ............. 10,391 * 5,000 5,391 *
Alvin Wood
c/o National Response Corporation
2203 Timberloch Place
Suite 234
The Woodlands, TX 77380 ............ 5,195 * 2,961 2,234 *
Granville Conway(5)
c/o SEACOR Holdings, Inc.
11200 Westheimer
Suite 850
Houston, TX 77042 .................. 140,328 1.64% 15,000 125,328 1.32
</TABLE>
- ------------
* Less than 1.0%
(1) The information contained in the table above reflects "beneficial"
ownership of the Common Stock within the meaning of Rule 13d-3 under
the Exchange Act. Unless otherwise indicated, all shares of Common
Stock are held directly with sole voting and dispositive power.
Beneficial ownership information reflected in the table above includes
shares issuable upon the exercise of outstanding stock options and upon
conversion from the Company's 6.0% Notes and the 2.5% Notes.
(2) Includes 156,650 shares of Common Stock issuable upon conversion of the
2.5% Notes, but does not include (i) Common Stock to be issued by the
Company in connection with the McCall Acquisition and (ii) Common Stock
to be issued upon conversion of the 6.0% Notes.
(3) Share ownership information with respect to CNN was derived from CNN's
Statement of Beneficial Ownership on Schedule 13D filed with the
Commission on March 15, 1996 and includes 156,650 shares of Common
Stock issuable upon conversion of the Company's 2.5% Notes. Pierre de
Demandolx, a director of the Company, is also a director of CNN. He
disclaims beneficial ownership of such shares of Common Stock owned by
CNN.
(4) Share ownership information with respect to Mr. Fabrikant was derived
from Amendment No. 1 to Mr. Fabrikant's Schedule 13G filed with the
Commission on March 12, 1996. Includes 425,907 shares of Common Stock
which Mr. Fabrikant may be deemed to own through his interest in, and
control of, (i) Fabrikant International Corporation ("FIC"), the record
owner of 214,464 shares of Common Stock, (ii) Fabrikant International
Profit Sharing Trust (the "Trust"), the record owner of 13,120 shares
of Common Stock, and (iii) SCF Corporation ("SCF"), the record owner of
198,323 shares of Common Stock. Mr. Fabrikant is the President of FIC,
a beneficiary of Fabrikant International Profit Sharing Trust, and is
the Chairman, Chief Executive Officer and a 38% stockholder of SCF.
Also includes 100,000 and 40,000 shares of Common Stock issuable upon
the exercise of options granted
57
<PAGE>
to Mr. Fabrikant on January 5, 1993 and February 8, 1994, respectively,
and 11,500 and 2,000 shares of Common Stock received by Mr. Fabrikant
as a restricted stock award granted to Mr. Fabrikant on March 14, 1995
and May 7, 1996, respectively. The options may be exercised in full or
in part at any time prior to January 5, 2003 and February 8, 2004,
respectively, and the restricted stock vests in three equal and
consecutive installments, commencing on March 14, 1996 and January 31,
1997, respectively.
(5) Does not include (i) an aggregate of 37,531 shares of Common Stock
owned by Mr. Conway's two sons, G. Todd Conway and Bradley L. Conway
(neither of whom are minors or reside with Mr. Conway), and (ii)
198,323 shares of Common Stock owned by SCF, in which Mr. Conway owns
an approximate 5.5% equity interest, as to which Mr. Conway, in each
case, disclaims beneficial ownership. Mr. Conway is a director of
SEACOR.
58
<PAGE>
UNDERWRITING
Under the terms and subject to the conditions contained in an Underwriting
Agreement dated June , 1996 (the "Underwriting Agreement"), the Underwriters
named below (the "Underwriters"), for whom CS First Boston Corporation,
Salomon Brothers Inc and Wasserstein Perella Securities, Inc. are acting as
representatives (the "Representatives"), have severally but not jointly
agreed to purchase from the Company and the Selling Stockholders the
following respective numbers of shares of Common Stock:
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SHARES
- ----------------------------------------- -------------
<S> <C>
CS First Boston Corporation ..............
Salomon Brothers Inc .....................
Wasserstein Perella Securities, Inc. ....
Total .................................
</TABLE>
The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that the
Underwriters will be obligated to purchase all of the shares of Common Stock
offered hereby (other than those shares covered by the over-allotment option
described below) if any are purchased. The Underwriting Agreement provides
that, in the event of a default by an Underwriter, in certain circumstances
the purchase commitments of non-defaulting Underwriters may be increased or
the Underwriting Agreement may be terminated.
The Company has granted to the Underwriters an option, expiring at the
close of business on the 30th day after the date of this Prospectus, to
purchase up to 239,297 additional shares at the initial public offering price
less the underwriting discounts and commissions, all as set forth on the
cover page of this Prospectus. Such option may be exercised only to cover
over-allotments in the sale of the shares of Common Stock offered hereby. To
the extent such option is exercised, each Underwriter will become obligated,
subject to certain conditions, to purchase approximately the same percentage
of such additional shares of Common Stock as it was obligated to purchase
pursuant to the Underwriting Agreement.
The Company has been advised by the Representatives that the Underwriters
propose to offer the shares to the public initially at the public offering
price set forth on the cover page of this Prospectus and, through the
Representatives, to certain dealers at such price less a concession of $
per share, and the Underwriters and such dealers may allow a discount of $
per share on sales to certain other dealers. After the initial public
offering, the public offering price and concession and discount to dealers
may be changed by the Representatives.
The Company has agreed that it will not offer, sell, contract to sell,
announce its intention to sell, pledge or otherwise dispose of, directly or
indirectly, or file with the Commission a registration statement under the
Securities Act relating to (other than a registration statement required to
be filed by the Company pursuant to the McCall Acquisition), any additional
shares of its Common Stock or any securities convertible into, or
exchangeable or exercisable for, any shares of its Common Stock without the
prior written consent of CS First Boston Corporation for a period of 120 days
after the date of this Prospectus; provided, however, that (i) the Company
may issue and sell Common Stock pursuant to any employee stock option plan,
stock ownership plan or dividend reinvestment plan in effect on the date of
this Prospectus, (ii) the Company may issue Common Stock issuable upon the
conversion of securities or the exercise of warrants outstanding on the date
of this Prospectus and (iii) the Company may issue shares of Common Stock as
consideration to any seller of assets or stock that the Company or any of its
subsidiaries is acquiring, provided that the holder of such shares of Common
Stock contemporaneously with such issuance enters into an agreement with the
Representatives to be bound by the foregoing 120-day restriction.
Furthermore, the Selling Stockholders, all directors and executive officers
of the Company and certain significant stockholders have agreed that they
will not offer, sell, contract to sell, pledge or otherwise dispose of,
directly or indirectly, any shares of Common Stock (other than shares of
Common Stock offered hereby or shares of Common Stock disposed of as bona
fide gifts) or any securities convertible into, or exchangeable or
exercisable for, any shares of Common Stock, or publicly disclose the
intention to make any such offer, sale, pledge or disposal, without the prior
written consent of CS First Boston Corporation for a period of 120 days from
the date of this Prospectus.
59
<PAGE>
In connection with this offering, CS First Boston Corporation and certain
of the Underwriters and selling group members (if any) and their respective
affiliates may engage in passive market making transactions in the Common
Stock on the Nasdaq National Market in accordance with Rule 10b-6A under the
Exchange Act during a period before commencement of offers or sales of the
shares offered hereby. The passive market making transactions must comply
with applicable volume and price limits and be identified as such.
The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including civil liabilities under
the Securities Act, or contribute to payments which the Underwriters may be
required to make in respect thereof.
LEGAL MATTERS
The legality of the shares of Common Stock offered hereby is being passed
upon for the Company by Weil, Gotshal & Manges LLP (a partnership including
professional corporations), New York, New York. Certain legal matters in
connection with the sale of the shares of Common Stock offered hereby are
being passed upon for the Underwriters by Cravath, Swaine & Moore, New York,
New York.
EXPERTS
The audited consolidated financial statements of the Company and the
combined financial statements of the McCall Affiliated Companies included or
incorporated by reference in this Prospectus and elsewhere in the
Registration Statement (referred to under "Available Information") of which
this Prospectus forms a part have been audited, and the pro forma financial
information for the year ended December 31, 1995, included in this
Prospectus, has been examined, by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
included or incorporated by reference, as applicable, in this Prospectus in
reliance upon the authority of such firm as experts in accounting and
auditing. In its report on the Company for 1995, Arthur Andersen LLP states
that with respect to certain subsidiaries, its opinion is based on the report
of other independent public accountants, namely Coopers & Lybrand L.L.P. The
financial statements referred to above have been included herein in reliance
upon the authority of that firm as an expert in giving such report.
With respect to the unaudited interim financial information of the Company
and the McCall Affiliated Companies as of March 31, 1996 and 1995 and for the
three month periods then ended and the unaudited pro forma financial
information as of March 31, 1996, and for the three month period then ended,
which are included in this Prospectus, Arthur Andersen LLP have applied
limited procedures in accordance with professional standards for reviews of
such information. However, their separate reports, state that they did not
audit and they do not express an opinion on such interim financial
information. Accordingly, the degree of reliance of their reports on such
information should be restricted in view of the limited scope of the review
procedures applied. Arthur Andersen LLP is not subject to the liability
provisions of Section 11 of the Securities Act with respect to such unaudited
interim financial information or such pro forma financial information because
those reports are not a "report" or an integral "part" of a registration
statement prepared or certified by such independent auditors within the
meaning of Sections 7 and 11 of the Securities Act.
The audited consolidated financial statements of NRC Holdings and
subsidiaries (and their respective successors) incorporated by reference in
this Prospectus have been audited by Coopers & Lybrand L.L.P., independent
accountants, and the audited financial statements of John E. Graham & Sons and
Offshore Trawlers, Inc. and Subsidiaries incorporated by reference in this
Prospectus have been audited by Dudley, Ruland & Chateau P.C. and are
incorporated by reference in this Prospectus, in each case, in reliance on the
report of that firm, given on the authority of that firm as experts in
accounting and auditing.
60
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act and, in accordance therewith, files periodic reports, proxy statements
and other information with the Commission. Copies of such reports, proxy
statements, and other information filed by the Company with the Commission
can be inspected and copied at the public reference facilities maintained by
the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549,
and also are available for inspection at the Commission's regional offices
located at 500 West Madison, Suite 1400, Chicago, Illinois 60661-2511, and 7
World Trade Center, Suite 1300, New York, New York 10048. Copies of such
material also can be obtained at prescribed rates from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549.
Such reports, proxy statements and other information may also be inspected at
the offices of the Nasdaq National Market at 1735 K Street, N.W., Washington,
D.C. 20006.
The Company has filed with the Commission a Registration Statement on Form
S-3 (together with all amendments thereto, the "Registration Statement")
under the Securities Act with respect to the shares of Common Stock offered
hereby. This Prospectus, which forms a part of the Registration Statement,
does not contain all of the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules
and regulations of the Commission. Statements made in this Prospectus as to
the contents of any contract, agreement, or other document referred to are
not necessarily complete and, with respect to each such contract, agreement,
or other document filed as an exhibit to the Registration Statement,
reference is made to the exhibit for a more complete description of the
matter involved. The Registration Statement and the exhibits thereto can be
inspected and copied at the public reference facilities and regional offices
of the Commission and the offices of the Nasdaq National Market referred to
above.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission pursuant
to the Exchange Act (File No. 0-20904) are incorporated by reference in this
Prospectus:
(1) The Company's Annual Report on Form 10-K for its fiscal year ended
December 31, 1995 filed by the Company with the Commission on March 15,
1996;
(2) The Company's Quarterly Report on Form 10-Q for its fiscal quarter
ended March 31, 1996 filed by the Company with the Commission on May 15,
1996;
(3) The Company's Current Report on Form 8-K dated May 31, 1996 and
filed with the Commission on June 7, 1996; and
(4) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A filed with the Commission on
November 30, 1992, including any amendment or report filed for the
purposes of updating such description.
All reports and other documents filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent
to the date of this Prospectus and prior to the termination of the Offering
shall be deemed to be incorporated herein by reference and to be a part
hereof on and from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by
reference in this Prospectus shall be deemed to be modified or superseded for
purposes of this Prospectus to the extent that a statement contained herein
or incorporated herein by reference or in any other subsequently filed
document that also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
This Prospectus, which is included in and forms an integral part of the
Registration Statement, incorporates certain documents by reference which are
not presented herein or delivered herewith. Copies of any such documents,
other than exhibits to such documents which are not specifically
61
<PAGE>
incorporated by reference therein, are available without charge to any
person, including any beneficial owner of Common Stock to whom this
Prospectus is delivered, upon written or oral request to SEACOR Holdings,
Inc., 1370 Avenue of the Americas, 25th Floor, New York, New York 10019,
Attention: Secretary; Telephone (212) 307-6633.
LIMITATION ON FOREIGN OWNERSHIP OF COMMON STOCK
The shares of Common Stock offered hereby are subject to limitations on
foreign ownership and as a condition to the receipt of Common Stock hereof,
holders will be required to furnish certification as to, and under certain
circumstances, additional proof of their citizenship. In addition, a foreign
person, by reason of such limitations, may have to purchase a lesser number
of shares of Common Stock hereunder. See "Risk Factors -- Limitation on
Foreign Ownership of Common Stock."
62
<PAGE>
GLOSSARY OF SELECTED INDUSTRY TERMS
ANCHOR HANDLING TOWING SUPPLY VESSELS. Anchor handling towing supply
vessels are equipped with winches capable of towing drilling rigs and lifting
and positioning their anchors and other marine equipment. They range in size
and capacity and are usually characterized in terms of horsepower and towing
capacity. For Gulf of Mexico service, anchor handling towing supply vessels
typically require 6,000 horsepower or more to position and service
semi-submersible rigs drilling in deep water areas.
BAREBOAT CHARTER. This is a lease arrangement under which the lessee
(charterer) is responsible for all crewing, insurance and operating expenses,
as well as the payment of bareboat charter hire to the vessel owner.
CREW BOATS. Crew boats transport personnel and cargo to and from
production platforms and rigs. Older crew boats, early 1980's built, are
generally 100 to 110 ft. in length and are generally designed for speed to
transport personnel. Newer crew boat designs are generally larger, 130 to 160
ft. in length, and have greater cargo carrying capacities. They are used
primarily to transport cargo on a time sensitive basis.
FREIGHT VESSELS. Freight vessels have a substantial amount of clear deck
space for cargo and adequate stability to handle tiers of containers or
overdimensional cargo. Speed and fuel consumption are also important factors
in this vessel category.
LINE HANDLING VESSELS. Line handling vessels are outfitted with special
equipment to assist tankers while they are loading at single buoy moorings.
They have a high degree of maneuverability, are well-fendered and include
pollution dispersal capability.
OIL SPILL RESPONSE VESSELS. Oil spill response vessels are specially
equipped to respond to oil spill emergencies, and are certified as such by
the U.S. Coast Guard.
OVERALL UTILIZATION. For any vessel with respect to any period, the ratio
of aggregate number of days worked by such vessel to total calendar days
available during such period.
PROJECT AND GEOPHYSICAL VESSELS. These vessels generally have special
features to meet the requirements of specific jobs. The special features
include large deck spaces, high electrical generating capacities, slow
controlled speed and unique thrusters, extra berthing facilities, and long
range capabilities. These vessels are primarily used for well stimulation and
for the deployment of seismic data gathering equipment.
RATE PER DAY WORKED. For any vessel with respect to any period, the ratio
of total charter revenue of such vessel to the aggregate number of days
worked of such vessel for such period.
STANDBY SAFETY VESSELS. Standby safety vessels operate in the U.K. sector
of the North Sea. They typically remain on station to provide a safety backup
to offshore rigs and production facilities, carry special equipment to rescue
personnel, are equipped to provide first aid and shelter and, in some cases,
also function as supply vessels.
SUPPLY VESSELS. Supply vessels serve drilling and production facilities
and support offshore construction and maintenance work. They are
differentiated from other vessels by cargo flexibility and capacity. The size
of a vessel typically determines deck capacity, although vessels constructed
after 1979 with exhaust stacks forward have better configurations for cargo
stowage and handling. In addition to deck cargo, such as pipe or drummed
materials on pallets, supply vessels transport liquid mud, potable and drill
water, diesel fuel and dry bulk cement. Generally, customers prefer vessels
with large liquid mud and bulk cement capacity and large areas of clear deck
space. For certain jobs, other characteristics such as maneuverability, fuel
efficiency or firefighting capability may also be important.
TOWING SUPPLY VESSELS. These vessels perform the same functions as supply
vessels but are equipped with more powerful engines (3,000 to 5,000
horsepower) and towing winches, giving them the added capability to perform
general towing duties, buoy setting and limited anchor handling work. Towing
supply vessels are primarily used in international operations, which require
the additional versatility that these vessels offer relative to supply
vessels.
UTILITY VESSELS. These vessels provide service to offshore production
facilities and also support offshore maintenance and construction work. Their
capabilities include the transportation of fuel, water, deck cargo, and
personnel. They range in length from 96 feet to 135 feet and can, depending
on the vessel design, have enhanced features such as firefighting and
pollution response capabilities.
63
<PAGE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
FINANCIAL STATEMENTS:
SEACOR Holdings, Inc.
Report of Independent Public Accountants ......................................... F-2
Consolidated Balance Sheets -- December 31, 1995 and 1994 ........................ F-3
Consolidated Statements of Income for each of the three years ended
December 31, 1995 ............................................................... F-4
Consolidated Statements of Changes in Equity for each of the three years ended
December 31, 1995 ............................................................... F-5
Consolidated Statements of Cash Flows for each of the three years ended
December 31, 1995 ............................................................... F-6
Notes to Consolidated Financial Statements ....................................... F-7
Review Report of Independent Public Accountants .................................. F-27
Condensed Consolidated Balance Sheet -- March 31, 1996 ........................... F-28
Condensed Consolidated Statements of Operations for the three months ended
March 31, 1996 and 1995 ......................................................... F-29
Condensed Consolidated Statements of Cash Flows for the three months ended
March 31, 1996 and 1995 ......................................................... F-30
Notes to Condensed Consolidated Financial Statements ............................. F-31
McCall Affiliated Companies
Report of Independent Accountants ................................................ F-33
Combined Balance Sheet -- December 31, 1995 ...................................... F-34
Combined Statements of Operations and Retained Earning for the year ended
December 31, 1995 ............................................................... F-35
Combined Statement of Cash Flows for the year ended December 31, 1995 ........... F-36
Notes to Combined Financial Statements ........................................... F-37
Review Report of Independent Public Accountants .................................. F-42
Condensed Combined Balance Sheet -- March 31, 1996 ............................... F-43
Condensed Combined Statement of Operations for the three months ended
March 31, 1996 and 1995 ......................................................... F-44
Condensed Combined Statement of Cash Flows for the three months ended
March 31, 1996 and 1995 ......................................................... F-45
Notes to Condensed Combined Financial Statements ................................. F-46
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To SEACOR Holdings, Inc.:
We have audited the accompanying consolidated balance sheets of SEACOR
Holdings, Inc. (a Delaware corporation) and subsidiaries as of December 31,
1995 and 1994 and the related consolidated statements of income, changes in
equity and cash flows for each of the three years in the period ended
December 31, 1995. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits. We did not audit the financial
statements of CRN Holdings Inc. and subsidiaries, which statements reflect
total assets and total revenues of 10 percent and 20 percent, respectively,
in 1995 of the consolidated totals. Those statements were audited by other
auditors whose report has been furnished to us and our opinion, insofar as it
relates to the amounts included for those entities, is based solely on the
report of the other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits and the report
of other auditors provide a reasonable basis for our opinion.
In our opinion, based on our audits and the report of other auditors, the
financial statements referred to above present fairly, in all material
respects, the financial position of SEACOR Holdings, Inc. and subsidiaries as
of December 31, 1995 and 1994 and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 1995,
in conformity with generally accepted accounting principles.
Arthur Andersen LLP
New Orleans, Louisiana,
February 20, 1996
F-2
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND 1994
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
ASSETS 1995 1994
----------- -----------
<S> <C> <C>
Current Assets:
Cash and temporary cash investments, including restricted cash of
$305 in 1994 ........................................................ $ 24,637 $ 41,135
Trade and other receivables, net of allowance for doubtful accounts
of $380 and $108, respectively ...................................... 29,584 10,992
Affiliate receivables ................................................ 872 2,594
Inventories .......................................................... 1,572 577
Prepaid expenses and other ........................................... 2,254 494
----------- -----------
Total current assets .............................................. 58,919 55,792
----------- -----------
Investments in and Receivables from 50% or Less Owned Companies, at
Equity ............................................................... 6,647 6,137
----------- -----------
Property and Equipment:
Vessels and equipment ................................................ 279,879 176,160
Other ................................................................ 9,181 2,335
----------- -----------
289,060 178,495
Less-accumulated depreciation ........................................ 54,365 41,055
----------- -----------
234,695 137,440
----------- -----------
Other Assets .......................................................... 12,930 2,428
----------- -----------
$ 313,191 $ 201,797
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt .................................... $ 2,333 $ 5,132
Accounts payable -- trade ............................................ 7,219 2,906
Accounts payable -- affiliates ....................................... 204 396
Accrued insurance .................................................... 975 885
Accrued wages ........................................................ 931 263
Accrued income taxes ................................................. 1,365 498
Other current liabilities ............................................ 3,708 2,105
----------- -----------
Total current liabilities ......................................... 16,735 12,185
----------- -----------
Long-Term Debt ........................................................ 106,626 73,092
Deferred Income Taxes ................................................. 29,685 27,664
Deferred Gain and Other Liabilities ................................... 2,484 1,733
Minority Interest in Subsidiary ....................................... 937 1,279
Stockholders' Equity:
Common stock, $.01 par value, 20,000,000 shares authorized; 8,568,343
and 5,891,573 shares issued and 8,512,575 and 5,835,805 shares
outstanding in 1995 and 1994, respectively .......................... 86 59
Additional paid-in capital ........................................... 127,300 66,306
Retained earnings .................................................... 31,142 20,916
Less 55,768 shares held in treasury, at cost ......................... (576) (576)
Unamortized restricted stock ......................................... (159) --
Currency translation adjustments ..................................... (1,069) (861)
----------- -----------
Total stockholders' equity ........................................ 156,724 85,844
----------- -----------
$ 313,191 $201,797
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
and should be read in conjunction herewith.
F-3
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994, AND 1993
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Operating Revenue:
Marine ......................................................... $ 84,504 $ 74,366 $ 73,720
Environmental --
Oil spill response ............................................ 8,927 -- --
Retainer and other services ................................... 12,838 -- --
----------- ----------- -----------
106,269 74,366 73,720
----------- ----------- -----------
Costs and Expenses:
Cost of spill response ......................................... 7,643 -- --
Operating expenses --
Marine ........................................................ 50,690 42,066 41,718
Environmental ................................................. 4,580 -- --
Administrative and general ..................................... 12,908 6,149 6,097
Depreciation and amortization .................................. 16,740 11,983 10,006
----------- ----------- -----------
92,561 60,198 57,821
----------- ----------- -----------
Operating Income ................................................ 13,708 14,168 15,899
----------- ----------- -----------
Other Income (Expense):
Interest income ................................................ 2,296 1,822 1,010
Other .......................................................... 667 (267) 116
Gain/(loss) from equipment sales or retirements ................ 3,765 (316) (8)
Interest expense ............................................... (6,486) (5,159) (4,359)
----------- ----------- -----------
242 (3,920) (3,241)
----------- ----------- -----------
Income Before Income Taxes, Minority Interest, Equity in
Earnings of 50% or Less Owned Companies, and Extraordinary Item 13,950 10,248 12,658
----------- ----------- -----------
Income Tax Expense (Benefit):
Current ........................................................ 4,252 3,653 3,376
Deferred ....................................................... 606 (152) 1,015
----------- ----------- -----------
4,858 3,501 4,391
----------- ----------- -----------
Income Before Minority Interest, Equity in Earnings of 50%
or Less Owned Companies, and Extraordinary Item ................ 9,092 6,747 8,267
Minority Interest in (Income) Loss of Subsidiary ................ 321 184 (51)
Equity in Net Earnings of 50% or Less Owned Companies .......... 813 975 287
----------- ----------- -----------
Income Before Extraordinary Item ................................ 10,226 7,906 8,503
Extraordinary Item -- Loss on Extinguishment of Debt ........... -- -- (1,093)
----------- ----------- -----------
Net Income ...................................................... $ 10,226 $ 7,906 $ 7,410
----------- ----------- -----------
Earnings (Loss) Per Common Share -- Assuming No Dilution:
Income before extraordinary item .............................. $ 1.64 $ 1.35 $ 1.46
Extraordinary item ............................................ -- -- (0.19)
----------- ----------- -----------
Net income .................................................... $ 1.64 $ 1.35 $ 1.27
=========== =========== ===========
Earnings (Loss) Per Common Share -- Assuming Full Dilution:
Income before extraordinary item .............................. $ 1.44 $ 1.24 $ 1.36
Extraordinary item ............................................ -- -- (0.15)
----------- ----------- -----------
Net income .................................................... $ 1.44 $ 1.24 $ 1.21
=========== =========== ===========
Weighted Average Common Shares:
Assuming no dilution ........................................... 6,240,780 5,835,805 5,821,147
Assuming full dilution ......................................... 8,725,782 8,318,994 7,060,174
</TABLE>
The accompanying notes are an integral part of these financial statements
and should be read in conjunction herewith.
F-4
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994, AND 1993
(IN THOUSANDS)
<TABLE>
<CAPTION>
ADDITIONAL UNAMORTIZED CURRENCY
COMMON PAID-IN RETAINED TREASURY RESTRICTED TRANSLATION
STOCK CAPITAL EARNINGS STOCK STOCK ADJUSTMENTS
-------- ------------ ---------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
1995
- ------------------------------------
Balance, December 31, 1994 .......... $59 $ 66,306 $ 20,916 $(576) $ -- $ (861)
Add -- Issuance of common stock:
NRC Merger .................. 3 5,704 -- -- -- --
CNN Acquisition ............. 5 11,295 -- -- -- --
Public Offering ............. 16 36,926 -- -- -- --
Coastal/Phibro Transaction . 3 7,497 -- -- -- --
-- Issuance of restricted stock -- 216 -- -- (216) --
-- Amortization of restricted
stock ...................... -- -- -- -- 57 --
-- Net income for the year
ended December 31, 1995 ... -- -- 10,226 -- -- --
-- Net currency translation
adjustments ................ -- -- -- -- -- (208)
Deduct -- Public offering costs .... -- (644) -- -- -- --
-------- ------------ ---------- ---------- ------------- -------------
Balance, December 31, 1995 .......... $86 $127,300 $ 31,142 $(576) $(159) $(1,069)
======== ============ ========== ========== ============= =============
1994
- ------------------------------------
Balance, December 31, 1993 .......... $59 $ 66,306 $ 13,010 $(576) $ -- $(2,484)
Add -- Net income for the year
ended December 31, 1994 .. -- -- 7,906 -- -- --
-- Net currency translation
adjustments ................ -- -- -- -- -- 1,623
-------- ------------ ---------- ---------- ------------- -------------
Balance, December 31, 1994 .......... $59 $ 66,306 $ 20,916 $(576) $ -- $ (861)
======== ============ ========== ========== ============= =============
1993
- ------------------------------------
Balance, December 31, 1992 .......... $58 $ 64,432 $ 5,600 $(576) $ -- $(2,388)
Add -- Issue of common stock to
acquire vessels ........... 1 1,874 -- -- -- --
-- Net income for the year
ended December 31, 1993 .... -- -- 7,410 -- -- --
Deduct -- Net currency translation
adjustments .............. -- -- -- -- -- (96)
-------- ------------ ---------- ---------- ------------- -------------
Balance, December 31, 1993 .......... $59 $ 66,306 $ 13,010 $(576) $ -- $(2,484)
======== ============ ========== ========== ============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements
and should be read in conjunction herewith.
F-5
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994, AND 1993
(IN THOUSANDS)
<TABLE>
<CAPTION>
1995 1994 1993
---------- --------- ----------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net income ....................................................... $ 10,226 $ 7,906 $ 7,410
Depreciation and amortization .................................... 16,740 11,983 10,006
Mobilization amortization ........................................ 44 415 953
Restricted stock amortization .................................... 57 -- --
Bad debt expense ................................................. 100 98 20
Debt discount amortization ....................................... 277 309 97
Deferred income taxes ............................................ 606 (152) 1,015
Equity in net earnings of 50% or less owned companies ........... (813) (975) (287)
Extraordinary loss, extinguishment of debt ....................... -- -- 1,093
Gain on purchase of 6% Convertible Subordinated Notes ........... (199) -- --
(Gain)/loss from equipment sales or retirements .................. (3,765) 316 8
Minority interest in income (loss) of subsidiary ................. (321) (184) 51
Other ............................................................ 31 176 19
Changes in operating assets and liabilities -- ...................
Decrease in restricted cash ..................................... 308 87 293
(Increase) decrease in receivables .............................. (13,992) 17 (3,756)
(Increase) in inventories ....................................... (49) (255) (132)
(Increase) in prepaid expenses and other assets ................. (908) (385) (164)
Increase (decrease) in payables and accrued and other
liabilities ...................................................... 29 (1,572) 3,124
---------- --------- ----------
Net cash provided by operations ................................ 8,371 17,784 19,750
---------- --------- ----------
Cash Flows from Investing Activities:
Purchases of property and equipment .............................. (12,777) (1,766) (24,112)
Proceeds from the sale of marine vessels and equipment .......... 7,407 -- 23
Investments in and advances to 50% or less owned companies ...... (1,165) (1,342) (89)
Principal payments on notes due from 50% or less owned companies 431 -- --
Principal payments received under a sale-type lease ............. 117 -- --
Cash acquired in NRC Merger ...................................... 2,176 -- --
Acquisition of John E. Graham & Sons ............................. (73,463) -- --
---------- --------- ----------
Net cash (used in) investing activities ........................ (77,274) (3,108) (24,178)
---------- --------- ----------
Cash Flows from Financing Activities:
Payments of long-term debt ....................................... (64,823) (5,317) (34,601)
Proceeds from issuance of long-term debt ......................... 85,000 -- --
Net proceeds from sale of common stock ........................... 36,298 -- --
Payment of initial public offering costs ......................... -- -- (155)
Purchase of 6% Convertible Subordinated Notes .................... (1,980) -- --
Debt issue cost, Den norske Bank ASA, revolving credit facility . (667) -- --
Payment of debt extinguishment costs ............................. -- -- (519)
Payments on capital lease obligation ............................. (1,037) -- --
Net proceeds from sale of 6% Convertible Subordinated Notes ..... -- -- 55,324
---------- --------- ----------
Net cash provided by (used in) financing activities ........... 52,791 (5,317) 20,049
---------- --------- ----------
Effects of Exchange Rate Changes on Cash and Cash Equivalents .... (81) 130 (80)
---------- --------- ----------
Net Increase (Decrease) in Cash and Cash Equivalents ............. (16,193) 9,489 15,541
Cash and Cash Equivalents, beginning of period .................... 40,830 31,341 15,800
---------- --------- ----------
Cash and Cash Equivalents, end of period .......................... $ 24,637 $40,830 $ 31,341
========== ========= ==========
</TABLE>
The accompanying notes are an integral part of these financial statements
and should be read in conjunction herewith.
F-6
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. NATURE OF OPERATIONS AND ACCOUNTING POLICIES:
NATURE OF OPERATIONS --
SEACOR Holdings, Inc. ("SEACOR") and its subsidiaries (the "Company")
furnish vessel support in the offshore oil and gas exploration and production
industry and provide contractual oil spill response and related services to
companies who store, transport, produce, or handle petroleum and certain
non-petroleum oils as required by the Oil Pollution Act of 1990 ("OPA 90").
The Company operates principally in the United States, offshore West Africa,
the North Sea and Mexico.
BASIS OF CONSOLIDATION --
The consolidated financial statements include the accounts of SEACOR and
its subsidiaries, all of which are wholly owned by SEACOR, except for a 9%
minority interest in a subsidiary that owns 11 vessels and bareboat
charters-in one vessel which operate in the North Sea and U.S. Gulf of
Mexico. The equity method of accounting is used by the Company when it has a
20% to 50% ownership interest in the voting stock of other companies and the
ability to exercise significant influence over their operating and financial
policies. The investments in 50% or less owned companies are carried at cost,
adjusted for the Company's equity in their undistributed earnings. All
significant intercompany accounts and transactions between the Company and
its majority and wholly owned subsidiaries have been eliminated in
consolidation.
The preparation of financial statements in conformity with generally
accepted accounting principals requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
CASH AND TEMPORARY CASH INVESTMENTS --
For purposes of the Consolidated Statements of Cash Flows, cash
equivalents refer to securities with original maturities of three months or
less.
ACCOUNTS RECEIVABLE --
Customers of vessel support services are primarily major and large
independent oil and gas exploration and production companies; whereas,
customers of oil spill response services include tank vessel owner/operators,
refiners, terminals, exploration and production facilities and pipeline
operators. The Company's customers are granted credit on a short-term basis
and related credit risks are considered minimal.
INVENTORIES --
Inventories consist of vessel spare parts, fuel, and supplies that are
recorded at cost and charged to vessel expenses as consumed.
PROPERTY AND EQUIPMENT --
Property and equipment are recorded at historical cost and depreciated
over the estimated useful lives of the related assets. Depreciation is
computed on the straight line method for financial reporting purposes.
Maintenance and repair costs, including routine drydock inspections on
vessels in accordance with maritime regulations, are charged to operating
expense as incurred. Expenditures that extend the useful life or improve the
marketing and commercial characteristics of vessels and major renewals or
improvements to other properties are capitalized.
F-7
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. NATURE OF OPERATIONS AND ACCOUNTING POLICIES: (Continued)
Vessels and related equipment are depreciated over 20 -- 25 years; all
other property and equipment are depreciated and amortized over two to ten
years.
OTHER ASSETS --
Other assets include the following for the years ended December 31, 1995
and 1994, in thousands of dollars:
<TABLE>
<CAPTION>
1995 1994
--------- -------
<S> <C> <C>
Goodwill, net of accumulated amortization of $167 in 1995 (see Note 4 and
7) ........................................................................ $ 7,837 $ --
Sale-type lease (see Note 12) .............................................. 2,543 --
Debt issue costs, net of accumulated amortization of $558 in 1995 and $643
in 1994 ................................................................... 2,214 1,994
Other ...................................................................... 336 434
--------- -------
$12,930 $2,428
========= =======
</TABLE>
Goodwill reflects the excess of cost over the estimated fair value of the
net assets acquired upon the merger of NRC Holdings, Inc. ("NRC Holdings")
with and into a subsidiary of SEACOR (see Note 4) and the excess of the value
of SEACOR's common stock issued in connection with the cancellation of two
customers' options to acquire up to 40% of a subsidiary's common stock over
the previously recorded carrying value of those options (see Note 7).
Goodwill is being amortized on a straight line basis over its estimated
useful life of 20 years.
Deferred debt issue costs relate primarily to the Company's sale of 6%
Convertible Subordinated Notes ("6% Notes") in July 1993 and the
establishment of an $85,000,000 revolving credit loan facility (the "DnB
Facility") with Den norske Bank ASA ("DnB") in September 1995 at a cost of
$667,000. Debt issue costs are being amortized on a straight line basis over
the life of the related debt, ranging from five to ten years.
Combined deferred charge amortization expense was $729,000, $769,000 and
$1,430,000 for the years ended December 31, 1995, 1994, and 1993. A
significant amount of previously deferred mobilization costs was amortized to
expense in 1993 but declined in 1994 and 1995. The Company's policy has been
to defer any significant costs to relocate vessels in association with
long-term charters (i.e., charters having a term of one year or more at
inception) in which the term charter rates are adequate to recover the
mobilization expenses. These deferred mobilization costs are typically
amortized to expense over the primary term of the related charter contracts.
INCOME TAXES --
Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 109, the financial accounting and reporting
standard for income taxes. This standard superseded SFAS No. 96 which had
been previously adopted by the Company. There was no significant effect on
the Company's financial condition or results of operations caused by the
adoption of the new standard.
Deferred income tax assets and liabilities have been provided in
recognition of the income tax effect attributable to the difference between
assets and liabilities reported in the tax return and financial statements.
Deferred tax assets or liabilities are provided using the enacted tax rates
expected to apply to taxable income in the periods in which the deferred tax
assets and liabilities are expected to be settled or realized.
F-8
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. NATURE OF OPERATIONS AND ACCOUNTING POLICIES: (Continued)
FOREIGN CURRENCY TRANSLATION --
The assets, liabilities and results of operations of certain SEACOR
subsidiaries are measured using the currency of the primary foreign economic
environment within which they operate, their functional currency. For purpose
of consolidating these subsidiaries with SEACOR, the assets and liabilities
of these foreign operations are translated to U.S. dollars at currency
exchange rates as of the balance sheet date and for revenue and expenses at
the weighted average currency exchange rates during the applicable reporting
periods. Translation adjustments resulting from the process of translating
these subsidiaries' financial statements are included in stockholders'
equity.
Certain SEACOR subsidiaries also enter into transactions denominated in
currencies other than their functional currency. Changes in currency exchange
rates between the functional currency and the currency in which a transaction
is denominated is included in the determination of net income in the period
in which the currency exchange rates change. Foreign currency exchange gains
or losses included in determining net income have not been material.
REVENUE RECOGNITION --
The Company's marine transportation business earns revenue primarily from
time or bareboat charter of vessels to customers based upon daily rates of
hire. Rates of hire earned under time and bareboat charters vary
substantially in direct proportion to the operating expenses incurred in
conjunction with each type of charter. Typically, under time charter
arrangements, the vessels' operating expenses are the responsibility of the
Company; whereas, under bareboat charters, the vessels' operating expenses
are paid by the charterer. Vessel charters may range from several days to
several years.
Environmental customers are charged retainer fees for ensuring by contract
the availability at predetermined rates of the Company's response services
and equipment. Retainer services include employing a staff to supervise
response to an oil spill emergency and maintaining specialized equipment,
including marine equipment, in a ready state for spill response as
contemplated by response plans filed by the Company's customers. Certain
vessel owners pay in advance a minimum annual retainer fee based upon the
number and size of vessels in each such owner's fleet and in some
circumstances pay the Company additional fees based upon the level of each
vessel owner's voyage activity in the U.S. The Company recognizes the greater
of revenue earned by voyage activity or the portion of the retainer earned in
each accounting period. Certain other vessel owners pay a fixed fee for the
Company's retainer services and such fee is recognized ratably throughout the
year. Facility owners generally pay a quarterly fee based on a formula that
defines and measures petroleum products transported to or processed at the
facility. Some facility owners pay an annual fixed fee and such fee is
recognized ratably throughout the year. Retainer agreements with vessel
owners generally range from one to three years while retainer arrangements
with facility owners are as long as seven years.
Spill response revenue is dependent on the magnitude of any one spill
response and the number of spill responses within a given fiscal year.
Consequently, spill response revenue can vary greatly between comparable
periods.
RELIANCE ON FOREIGN OPERATIONS --
For the years ended December 31, 1995, 1994, and 1993, approximately 37%,
41%, and 51%, respectively, of the Company's offshore marine revenues were
derived from foreign operations. The Company's foreign operations are subject
to various risks inherent in conducting business in foreign nations. These
risks include, among others, political instability, potential vessel seizure,
nationalization of assets, currency restrictions and exchange rate
fluctuations, import-export quotas and other forms of public and governmental
regulation, all of which are beyond the control of the Company. Although,
F-9
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. NATURE OF OPERATIONS AND ACCOUNTING POLICIES: (Continued)
historically, the Company's operations have not been affected materially by
such conditions or events, it is not possible to predict whether any such
conditions or events might develop in the future. The occurrence of any one
or more of such conditions or events could have a material adverse effect on
the Company's financial condition and results of operations.
EARNINGS PER SHARE --
Earnings per common share assuming no dilution was computed based on the
weighted average number of common shares issued and outstanding during the
relevant periods. Shares issuable upon the exercise of stock options were
excluded from the computation since the effect of the assumed exercise thereof
was not material.
On July 1, 1993, the Company sold $57,500,000 principal amount 6% Notes,
and on December 17, 1993, the Company issued $4,750,000 principal amount 2.5%
Convertible Subordinated Notes ("2.5% Notes"). Both note issues are
convertible into shares of the Company's common stock at any time prior to
maturity. The conversion rates for the 6% Notes and the 2.5% Notes are 39.024
and 32.979 shares, respectively, per $1,000 principal amount of notes. In
February 1995, the Company purchased $2,250,000 of the then outstanding
$57,500,000 principal amount of its 6% Notes in the open market.
Earnings per common share assuming full dilution was computed based on the
weighted average number of shares issued and outstanding plus the shares that
would be outstanding assuming the exercise of all stock options using the
treasury stock method and assuming all outstanding convertible subordinated
notes were converted to common stock. For computation purposes, income before
extraordinary item and net income were adjusted for the interest expense (net
of income tax) applicable to the convertible subordinated notes.
RECLASSIFICATIONS --
Certain reclassifications of prior year information have been made to
conform with the current year presentation.
NEW ACCOUNTING STANDARDS --
In 1995, Statement of Financial Accounting Standards No. 121 --"Accounting
for Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
of" was issued and require adoption by the Company in fiscal 1996. Management
believes that such adoption will not have a material effect on the Company's
financial statements taken as a whole.
Also in 1995, Statement of Financial Accounting Standards No. 123 --
"Accounting for Stock-Based Compensation" (the "Statement") was issued which
establishes, among other things, financial accounting and reporting standards
for stock-based employee compensation plans. Entities may either adopt a
"fair value based method" of accounting for an employee stock option as
defined by the Statement or may continue to use accounting methods as
prescribed by APB Opinion No. 25 -- "Accounting for Stock Issued to
Employees." Entities electing to remain with the accounting in APB Opinion
No. 25 are required to make pro forma disclosures of net income and earnings
per share as if the fair value based method of accounting defined in the
Statement had been applied. The accounting requirements of the Statement are
effective for transactions entered into in fiscal years that begin after
December 15, 1995. The Company expects to continue following APB Opinion No.
25 and make appropriate disclosures in the future in accordance with the
Statement.
2. FAIR VALUE OF FINANCIAL INSTRUMENTS:
The estimated fair value amounts of the Company's financial instruments
have been determined using available market information and appropriate
valuation methodologies. Considerable judgment was
F-10
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. FAIR VALUE OF FINANCIAL INSTRUMENTS: (Continued)
required in developing the estimates of fair value, and accordingly, the
estimates presented herein, in thousands of dollars, are not necessarily
indicative of the amounts realizable in a current market exchange.
<TABLE>
<CAPTION>
CARRYING FAIR
DECEMBER 31, 1995 AMOUNT VALUE
- ----------------------------------------------------- ---------- ---------
<S> <C> <C>
Assets:
Cash and temporary cash investments ................. $ 24,637 $ 24,637
Notes receivable from 50% or less owned companies .. 2,902 2,902
Liabilities:
Long-term debt ...................................... 108,959 110,897
Indebtedness to minority shareholder of a subsidiary 1,010 1,196
</TABLE>
The carrying values of cash and temporary cash investments and notes
receivable due from 50% or less owned companies are a reasonable estimate of
their fair value. The estimated value of the Company's long-term debt and
indebtedness to a minority shareholder of a subsidiary of the Company was
determined by discounting the future cash flows using market information as
to borrowing rates for debt of similar terms and maturity.
3. POOLING ARRANGEMENTS:
On December 17, 1993, the Company entered into a pooling arrangement (the
"SEAFISH Pool"), effective January 1, 1994, with Compagnie Nationale de
Navigation ("CNN"), a French corporation engaged in various sectors of the
marine shipping industry, which sold and leased back (bareboat chartered)
from the Company ten offshore towing supply vessels. Under the terms of the
arrangement, revenue and expenses of certain vessels owned and operated by
the Company and certain vessels owned or bareboat chartered and operated by
CNN were pooled and the net pool results were shared by both parties equally
after giving effect to certain preference payments. Pursuant to an agreement
under which the Company acquired additional vessels from CNN, the pooling
arrangement and lease back of ten vessels were terminated effective October
1, 1995, (see Note 5).
SEAFISH Ltd., a Bahamian corporation owned jointly by SEACOR and CNN, was
assigned the responsibility to coordinate the activities of all vessels in
the SEAFISH Pool. Immediately prior to terminating the SEAFISH Pool, the
Company and CNN had 12 and 21 participating vessels, respectively, and at
December 31, 1994, the respective count of participating vessels was 11 and
15. For a fee, the Company provided management and accounting services to
SEAFISH Ltd. For the years ended December 31, 1995 and 1994, the effect on
the Company's revenue from its participation in the SEAFISH Pool was a
reduction in revenue of $972,000 and an increase in revenue of $337,000,
respectively.
On January 1, 1995, the SEAVEC Pool commenced operations. The SEAVEC Pool
was formed to coordinate the marketing in the North Sea standby market of
eleven vessels owned by the Company and five vessels from Toisa Ltd., an
unrelated offshore marine transportation and services company. Under the
pooling arrangement, operating revenue is pooled and distributed to each
company pursuant to a formula derived from the class of vessels each company
contributes to the pool. For the year ended December 31, 1995, the effect on
the Company's revenue from its participation in the SEAVEC Pool was a
reduction in revenue of $313,000. Ten vessels owned by the Company were
participating in the Pool at December 31, 1995.
4. NRC MERGER:
On March 14, 1995, SEACOR acquired the remaining 57.1% of the outstanding
common stock of NRC Holdings that it did not already own through a merger
(the "NRC Merger") of NRC Holdings with
F-11
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. NRC MERGER: (Continued)
and into CRN Holdings Inc. ("CRN"), a wholly owned subsidiary of SEACOR.
Following the NRC Merger, the financial condition, results of operations, and
cash flows of the newly acquired environmental subsidiaries, primarily
operating through the National Response Corporation ("NRC"), were reflected
in the Company's consolidated financial statements. Prior to March 14, 1995,
the Company reported its equity interest in NRC Holdings as an investment in
50% or less owned company that was accounted for by the equity method.
CRN, the surviving corporation of the NRC Merger, primarily through its
wholly owned subsidiary, NRC, is engaged in the business of responding to
marine oil spills and planning for environmental emergencies. SEACOR issued
292,965 shares of its common stock pursuant to the transaction that were
valued at $5,707,000. The Company already owned 42.9% of NRC Holdings which
was carried on the Company's books at a value net of deferred taxes of
$995,000. The purchase method was used to account for this business
combination. The excess of cost over estimated fair value of the net assets
acquired, including $138,000 in direct costs incurred in conjunction with the
transaction, of $3,447,000 will be amortized over 20 years using the straight
line method. The estimated fair values of assets and liabilities of NRC
Holdings at the date of the NRC Merger are as follows, in thousands of
dollars:
<TABLE>
<CAPTION>
CAPTION AMOUNT
- ------------------------- ----------
<S> <C>
Current Assets ........... $ 6,008
Property and Equipment .. 21,219
Capitalized Lease ........ 1,807
Other Assets ............. 100
Goodwill ................. 3,447
Deferred Income Taxes ... 404
Current Liabilities ..... (5,741)
Capital Lease Obligations (1,577)
Bank Loan Payable ........ (12,500)
Deferred Revenue ......... (6,327)
----------
$ 6,840
==========
</TABLE>
The following unaudited pro forma information has been prepared as if the
merger had occurred at the beginning of each of the periods presented, in
thousands of dollars, except per share data. This pro forma information has
been prepared for comparative purposes only and is not necessarily indicative
of what would have occurred had the merger taken place on the dates
indicated, nor does it purport to be indicative of the future operating
results of the Company. The results of NRC Holdings for the year ended
December 31, 1994, were impacted favorably by its involvement in a major oil
spill response in San Juan, Puerto Rico. As spill response revenue is
dependent on the magnitude of any one spill response and the number of spill
responses in a given year, operating results can vary greatly between
periods. The favorable effect of the major spill response and its effect on
operating results in 1994 is not indicative of a trend or of anticipated
results in future periods.
<TABLE>
<CAPTION>
CAPTION 1995 1994
- ----------------------------------------- ---------- ----------
<S> <C> <C>
Revenues ................................. $110,345 $114,437
Net Income ............................... $ 10,378 $ 8,652
Earnings Per Share -- Assuming No
Dilution ................................ $ 1.66 $ 1.41
</TABLE>
F-12
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. VESSEL ACQUISITIONS AND DISPOSITIONS:
GRAHAM ACQUISITION --
On September 15, 1995, the Company acquired substantially all the assets
of John E. Graham & Sons and certain of its affiliated companies
(collectively, "Graham") for $72,854,000 in cash (the "Graham Acquisition").
The purchased assets included 127 marine vessels used to support the offshore
oil and gas exploration and production industry in the U.S. Gulf of Mexico,
real estate, capital equipment and inventory associated with the operation of
these vessels. The acquisition was financed with $74,000,000 of borrowings
under a revolving credit facility entered into with DnB. The difference
between the amount borrowed and paid to Graham to acquire the assets was used
to defray debt issue and acquisition costs, totaling $1,208,000. Acquisition
costs, totaling $609,000, have been allocated to the vessels acquired, and
debt issue costs, totaling $599,000, are included in Other Assets.
CNN ACQUISITION --
On November 14, 1995, the Company acquired three towing supply vessels
from CNN and entered into an agreement to acquire two anchor handling towing
supply vessels and certain other vessel related assets for aggregate
consideration of $21,550,000. Of such consideration, $11,300,000 was paid for
by issuing 459,948 shares of SEACOR's common stock to CNN and $10,250,000 was
paid for in cash on December 14, 1995 when the two anchor handling towing
supply vessels were delivered to the Company (the "CNN Acquisition"). The
Company borrowed $11,000,000 from the DnB Facility to finance the cash
portion of the consideration and pay acquisition costs. Pursuant to the CNN
Acquisition, the Company and CNN agreed to (i) terminate CNN's bareboat
charters covering ten vessels owned by the Company, effective October 1,
1995, (ii) terminate the SEAFISH Pooling arrangement, effective October 1,
1995, (iii) the Company's bareboat charter, effective October 1, 1995, of one
vessel owned by CNN with an option to purchase, (iv) provide the Company a
right of first refusal until December 31, 1999, under which terms CNN shall
not sell or transfer all or part of its interest in any of three additional
vessels owned by CNN, (v) SEACOR's acquisition of 50% of the outstanding
shares of FISH for a cost of $60,000, effective January 1, 1996, (vi) CNN's
sale to SEACOR of all CNN's right, title, and interest in and to all of the
shares owned by CNN in SEAFISH Ltd. for a purchase price of $5,000, effective
January 1, 1996, (vii) reimburse CNN for certain costs associated with CNN's
early termination of employment contracts for officers and crews that worked
aboard seven of the Company's vessels which were previously bareboat
chartered to CNN; at December 31, 1995, the Company recorded a liability of
$700,000 regarding these contract termination costs and has included such
cost in the purchase price of the five vessels acquired, and (viii) permit
Feronia International Shipping S.A. ("FISH"), a French corporation in which
the Company and CNN own a 50% interest, to manage, for a fee, the Company's
vessels operating offshore West Africa and in the Arabian Gulf and certain
other additional vessels owned by CNN.
VESSEL DISPOSITIONS --
During 1995, the Company sold four supply and six utility vessels that
resulted in the recognition of a pre-tax gain, totaling $4,124,000. The gain
was offset by a pre-tax loss of $359,000 from the retirement of certain
previously capitalized costs relating to a vessel which was withdrawn from
standby safety service in the North Sea and relocated to the U.S. Gulf of
Mexico for well stimulation service. A pre-tax loss of $316,000 was recorded
in 1994 from the retirement of certain previously capitalized costs that also
related to a vessel which was withdrawn from standby safety service in the
North Sea and relocated to the U.S. Gulf of Mexico for well stimulation
service.
F-13
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6. INVESTMENTS IN AND RECEIVABLES FROM 50% OR LESS OWNED COMPANIES:
Investments, carried at equity, consist of the following at December 31,
1995 and 1994:
<TABLE>
<CAPTION>
PERCENT OWNED
--------------------
COMPANY 1995 1994
- ------------------------------ --------- ---------
<S> <C> <C>
SEAFISH Ltd. .................. 50.0% 50.0%
SEAMAC Offshore, L.L.C. ...... 50.0% --%
NRC Holdings, Inc ............. --% 42.9%
Maritima Mexicana, S.A ........ 40.0% 40.0%
SEAMEX International, Ltd. ... 40.0% 40.0%
West Africa Offshore, Ltd. ... 40.0% 40.0%
</TABLE>
Until October 1,1995, SEAFISH Ltd. coordinated the activities of certain
vessels owned and operated by the Company and certain vessels owned or
bareboat chartered and operated by CNN that participated in a pooling
arrangement (see Note 3). For purposes of the pooling arrangement, SEAFISH
Ltd. acted as a custodian of cash balances relating to the Company's and
CNN's pool activities and recorded no revenues or expenses from the pooling
arrangement. Therefore, the net pool results were not included in equity in
net earnings of 50% or less owned companies. Pursuant to the CNN Acquisition
(see Note 5), SEACOR and CNN have agreed to terminate the SEAFISH Pool and
SEACOR has agreed to acquire all of CNN's rights, title and interest in and
to all of the shares owned by CNN in SEAFISH Ltd. for a purchase price of
$5,000, effective January 1, 1996.
In August 1995, the Company and McCall Support Vessels Inc. ("McCall")
organized and formed a Louisiana limited liability company, SEAMAC OFFSHORE,
L.L.C. ("SEAMAC") for the primary purpose of acquiring, owning, operating,
and managing marine vessels. SEAMAC's two equally participating members are
McCall and a wholly owned subsidiary of SEACOR. At December 31, 1995, two
crew vessels were bareboat chartered by SEAMAC from corporations affiliated
with McCall and were operating in Nigeria. For the year ended December 31,
1995, the Company's equity in a loss of SEAMAC, net of applicable income
taxes, was $57,000. At December 31, 1995, SEAMAC had one crew vessel under
construction, and subsequent to year end, the members of SEAMAC agreed to
construct an additional crew vessel.
On March 14, 1995, SEACOR acquired the remaining 57.1% of the outstanding
common stock of NRC Holdings that it did not already own through a merger of
NRC Holdings with and into CRN. Following the NRC Merger, the financial
condition, results of operations, and cash flows of the newly acquired
environmental subsidiaries, primarily operating through NRC, were reflected
in the Company's consolidated financial statements. (see Note 4).
Until the NRC Merger on March 14, 1995, and during 1994 and 1993, the
Company earned operating revenue of $68,000, $347,000 and $174,000,
respectively, from NRC. The fees related primarily to capital improvements
made by the Company to an owned and operated vessel and certain other
expenses incurred in support of NRC's oil spill response activities. In 1994
and until the NRC Merger in 1995, the Company also provided management
services to NRC for a fee. The amount previously recorded by the Company as
its equity in the earnings of NRC Holdings differed from its 42.9% pro rata
share of the company's book value primarily because of the effect of the
warrants held by two principal customers to purchase 40% of the common stock
of NRC (see Note 7). Equity in earnings of NRC Holdings, Inc. and its
subsidiaries, net of applicable income taxes, was $607,000, and $287,000 for
the years ended December 31, 1994 and 1993, respectively.
During 1994, the Company and Transportacion Maritima Mexicana ("TMM")
completed their structuring of a joint venture to serve the Mexican offshore
market that began in December 1993 (the "TMM Joint Venture"). As part of
organizing the TMM Joint Venture, the Company: (i) invested $1,630,000
representing its share of the costs to acquire and improve three vessels,
(ii) invested $800,000
F-14
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6. INVESTMENTS IN AND RECEIVABLES FROM 50% OR LESS OWNED COMPANIES:
(Continued)
cash, and (iii) contributed one vessel from its fleet with an agreed value
of $1,350,000. A portion of the Company's initial investment in the TMM Joint
Venture was represented by unsecured notes receivable, totaling $2,350,000.
The Company recorded a deferred gain of $718,000 upon contributing the vessel
to the venture from its fleet which is being amortized to income over the
vessel's depreciable life. The TMM Joint Venture is comprised of two
corporations, Maritima Mexicana, S.A. and SEAMEX International, Ltd
In March 1995, the Company sold an additional supply vessel to the TMM
Joint Venture for $1,700,000 in cash which resulted in the recognition of an
immediate gain of $473,000 and the deferral of a $315,000 gain. The deferred
gain is being amortized to income over the depreciable life of the vessel,
and the amount amortized to other income from this transaction and from the
contribution of a vessel upon establishment of the venture totaled $53,000
and $10,000 for the years ended December 31, 1995 and 1994, respectively.
In 1995, the Company entered into a sale-type lease for one of its vessels
with the TMM Joint Venture. The lease expires in seven years and contains
options which permit the TMM Joint Venture to purchase the vessel at various
dates during the term of the lease. Unearned income and deferred gain
amortized to other income in connection with this lease for the year ended
December 31, 1995, totaled $387,000. Additionally in 1995, the Company
advanced the TMM Joint Venture $680,000 to acquire equipment in exchange for
a note receivable.
Principal and interest payments on the TMM Joint Venture notes are due in
quarterly installments which extend through 2000. The notes bear interest at
prime plus two percent, and earned interest income was $302,000 and $147,000
for the years ended December 31, 1995 and 1994, respectively.
During 1995 and 1994, the TMM Joint Venture chartered vessels and utilized
other services of the Company. Charter and other revenue earned by the
Company from this operation for the years ended December 31, 1995 and 1994
was $369,000 and $624,000, respectively. The Company's equity in earnings of
the TMM Joint Venture, net of applicable income taxes, was $873,000 and
$368,000 for the years ended December 31, 1995 and 1994, respectively.
West Africa Offshore, Ltd. has been the Company's principal agent for
vessels operating offshore West Africa and is reimbursed for its operating
expenses. Pursuant to FISH expanding its vessel management responsibilities
in behalf of the Company, see discussion below, agency support of West Africa
Offshore, Ltd. will be limited primarily to the Company's operations in
Nigeria.
Pursuant to the CNN Acquisition (see Note 5), SEACOR acquired 50% of the
outstanding shares of FISH, a French corporation, for a cost of $60,000,
effective January 1, 1996. FISH has agreed to manage the Company's vessels
operating offshore West Africa and in the Arabian Gulf and certain other
additional vessels owned by CNN. The FISH management fee charged to general
and administrative expense for the year ended December 31, 1995 totaled
$226,000.
F-15
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6. INVESTMENTS IN AND RECEIVABLES FROM 50% OR LESS OWNED COMPANIES:
(Continued)
The summarized financial information below represents an aggregation of
the Company's principal equity investees for the years ended December 31, in
thousands of dollars.
<TABLE>
<CAPTION>
CONDENSED INFORMATION 1995 1994
- ----------------------- --------- ---------
<S> <C> <C>
Current Assets ......... $ 6,985 $10,040
Noncurrent Assets ...... 10,437 32,359
--------- ---------
Total Assets ......... $17,422 $42,399
========= =========
Current Liabilities ... 3,924 24,653
Noncurrent Liabilities 4,941 7,244
--------- ---------
Total Liabilities ... $ 8,865 $31,897
========= =========
Revenues ............... $ 9,472 $50,217
========= =========
Gross Profit ........... $ 4,818 $24,648
========= =========
Net Income ............. $ 3,132 $ 4,397
========= =========
</TABLE>
The amount of consolidated retained earnings that represents undistributed
earnings of 50% or less owned companies accounted for by the equity method
was $1,184,000 at December 31, 1995.
7. COASTAL AND PHIBRO AGREEMENT --
On October 27, 1995, SEACOR and its primary environmental subsidiary, NRC,
amended certain existing agreements with two of its customers, Coastal
Refining and Marketing, Inc. ("Coastal") and Phibro Energy USA, Inc.
("Phibro"). Those agreements provided, among other things, for a reduction
in, and subsequent elimination of, Coastal and Phibro's participating
interest in certain operating results, a reduction in their retainer fees,
and an elimination of certain options held by each of those customers to
purchase up to 20% of the fully diluted common stock of NRC. NRC will
continue to provide one customer through December 31, 2001 and the other
customer through December 31, 1998 various oil spill response services
mandated by the OPA 90. In addition, Coastal's agreements, among other
things, called for SEACOR to issue them 311,357 shares of its common stock
(having a value at time of issuance of $7,500,000) in exchange for the
cancellation of their stock options in NRC. Phibro also agreed to cancel a
similar option in return for amendments to its agreement which related
primarily to the reduction of its retainer payments for OPA 90 services.
SEACOR has accounted for its share issuance as a repurchase of a minority
interest. The difference between the value of the common stock issued and the
previously recorded carrying value of certain deferred revenue, net of income
tax effect, which approximated 40% of NRC's net book value, totaled
$4,558,000 and was recorded as goodwill (see Note 1).
8. INCOME TAXES:
Income (loss) before income taxes, minority interest, equity in net
earnings of 50% or less owned companies, and extraordinary item derived from
the United States and foreign operations for the years ended December 31, are
as follows, in thousands of dollars:
<TABLE>
<CAPTION>
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
United States $16,626 $11,206 $11,881
Foreign ....... (2,676) (958) 777
--------- --------- ---------
$13,950 $10,248 $12,658
========= ========= =========
</TABLE>
F-16
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
8. INCOME TAXES: (Continued)
The Company files a consolidated U.S. Federal tax return. Income tax
expense (benefit) consisted of the following components for the years ended
December 31, 1995, 1994 and 1993, in thousands of dollars:
<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- -------
<S> <C> <C> <C>
Current:
State ..... $ (2) $ 22 $ 42
Federal .. 3,812 3,431 2,658
Foreign .. 442 200 676
Deferred:
Federal .. 1,130 (152) 1,033
Foreign .. (524) -- (18)
-------- -------- -------
$4,858 $3,501 $4,391
======== ======== =======
</TABLE>
The following table reconciles the difference between the statutory
federal income tax rate for the Company to the effective income tax rate:
<TABLE>
<CAPTION>
1995 1994 1993
------- ------- -------
<S> <C> <C> <C>
Statutory rate .......... 34.0% 34.0% 34.0%
Foreign and state taxes 0.8 0.2 0.7
------- ------- -------
34.8% 34.2% 34.7%
======= ======= =======
</TABLE>
The components of the net deferred income tax liability were as follows,
for the years ended December 31, in thousands of dollars:
<TABLE>
<CAPTION>
1995 1994
---------- ---------
<S> <C> <C>
Deferred tax assets:
Foreign Tax Credit .............. $ 522 $ 337
Alternative Minimum Tax Credit . 568 --
Subpart F Loss .................. 1,727 747
Nondeductible Accruals .......... 494 --
Other ........................... 334 340
---------- ---------
Total deferred tax assets ..... 3,645 1,424
Deferred tax liabilities:
Property and equipment .......... 32,682 28,387
Investment in Subsidiaries ..... 603 660
Other ........................... 45 41
---------- ---------
Total deferred tax liabilities 33,330 29,088
---------- ---------
Net deferred tax liabilities . $ 29,685 $ 27,664
========== =========
</TABLE>
As of December 31, 1995, the Company has carryforwards for income tax
purposes of foreign tax credits approximating $522,000 that expire from 1997
through 2000. As of December 31, 1995, the Company also has alternative
minimum tax credit carryforwards of $568,000 for income tax purposes. For
financial reporting purposes, the carryforwards have been recognized through
a reduction in deferred tax liabilities.
9. RELATED PARTY TRANSACTIONS:
The Company reimburses a stockholder for management and administrative
services. These charges totaled $275,000 for the year ended December 31, 1995
and $175,000 for each of the years ended December 31, 1994 and 1993. The fees
relate primarily to the use of the stockholder's physical resources and
administrative and technical personnel.
F-17
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
9. RELATED PARTY TRANSACTIONS: (Continued)
Miller Environmental Group ("MEG"), an environmental contractor based in
Calverton, New York, maintains and stores spill response equipment owned by
NRC and in the event of a spill, provides labor, equipment and materials to
assist in NRC's spill response activities. In fiscal 1995, NRC paid
approximately $1,750,000 to MEG for these services. The father of a SEACOR
corporate officer is Vice President, Secretary and Treasurer of MEG.
NRC also contracts with James Miller Marine Services ("JMMS"), an
environmental contractor based in Staten Island, New York, for services
similar to those provided by MEG. In fiscal 1995, NRC paid approximately
$600,000 to JMMS for these services. The brother of a SEACOR corporate
officer is Vice President of JMMS.
10. LONG-TERM DEBT:
Long-term debt balances, maturities, and interest rates are as follows for
the years ended December 31, in thousands of dollars:
<TABLE>
<CAPTION>
1995 1994
----------- ---------
<S> <C> <C>
Notes payable to former vessel owners, due in quarterly or semi-annual
installments and maturing from 1996 through 2003, at interest rates
ranging from 3.75% to 7.50% ............................................. $ 11,147 $13,210
Notes payable to Nederlandse Scheepshypotheekbank N.V. ("Nedship Bank"),
due in quarterly installments payable from 1991 through 1996, secured by
vessels, bearing interest at LIBOR plus 2.0% (7.375% at December 31,
1994) ................................................................... -- 5,227
DnB Revolving Credit Facility, interest payable based upon interest
option period at LIBOR plus 1.25% prior to term conversion and principal
and interest after conversion on August 31, 1996 due semi-annually
through August 31, 2002 bearing interest at LIBOR plus maximum of 1.5%
(7.1875% at December 31, 1995) .......................................... 40,000 --
6% Convertible Subordinated Notes, due 2003, interest payable
semi-annually commencing 1994 ........................................... 55,250 57,500
2.5% Convertible Subordinated Notes, due 2004, interest payable
semi-annually commencing 1994 ........................................... 4,750 4,750
----------- ---------
111,147 80,687
Less -- Portion due within one year ...................................... 2,333 5,132
-- Debt discount .................................................... 2,188 2,463
----------- ---------
$ 106,626 $ 73,092
=========== =========
</TABLE>
Annual maturities of long-term debt for the five years following December
31, 1995, are as follows, in thousands of dollars.
<TABLE>
<CAPTION>
YEAR 1996 1997 1998 1999 2000
- -------- --------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
AMOUNT . $ 2,333 $1,476 $ 1,338 $ 1,200 $ 1,200
</TABLE>
The long-term debt maturities schedule does not include future annual
maturities for borrowings outstanding under the DnB Facility at December 31,
1995. It is uncertain how much, if any, of the outstanding senior secured
revolving bridge loans due DnB at December 31, 1995 may be converted into
term loans on August 31, 1996, the date upon which the Company may elect to
extend all or a portion of the DnB Facility. If the outstanding senior
secured revolving bridge loans at December 31, 1995 were converted to term
loans and the Company did not extend its commitment for any other unused
portion of the DnB Facility on August 31, 1996, future annual maturities for
the DnB Facility would be $6,667,000 in each of the years 1997 through 2000
and $13,332,000 thereafter.
F-18
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
10. LONG-TERM DEBT: (Continued)
On August 20, 1993, the Company retired U.S. Government Guaranteed Ship
Financing Bonds in the amount of $7,303,000 with proceeds from the issuance
of the 6% Notes. At that time, $549,000 and $52,000 of unamortized debt
discount and deferred bond issue costs, respectively, were written off, and a
redemption premium and fees of $341,000 were paid, all of which was recorded
as an extraordinary loss. Debt discount amortization expense related to these
bonds was $66,000 for the year ended December 31, 1993.
In July 1993, the Company retired notes payable to a bank and former
vessel owners in the amount of $18,110,000 with proceeds from the issuance of
the 6% Notes. At that time, $1,011,000 of unamortized deferred debt issue
costs was written off, and fees of $178,000 were paid to the bank, all of
which was recorded as an extraordinary loss.
In April 1991, in conjunction with the Company's expansion in the North
Sea, VEESEA Holdings Inc. ("VEESEA"), a 91% owned subsidiary of SEACOR, and
its subsidiaries (collectively, the "VEESEA Group") entered into a loan
agreement with Nedship Bank, pursuant to which Nedship Bank loaned pounds
sterling10,700,000 (or $18,426,000 based upon exchange rates in 1991). In
conjunction with regularly scheduled payments during 1995, the Company made
optional principal prepayments, amounting to $2,266,000, on the Nedship Bank
loan, and the loan was completely repaid by December 31, 1995.
In conjunction with eight vessels acquired in March 1993, SEACOR issued
two notes payable to the former vessel owners: (i) a $1,875,000, 7.5%
unsecured note repayable in eleven equal quarterly installments of $100,000
commencing June 1993 with a final installment of $775,000 in March 1996, and
(ii) a $975,000, 6% unsecured note repayable in twelve quarterly installments
of $81,250 commencing June 1993 and maturing March 1996.
On August 6, 1993, a customer who had previously sold a project vessel to
the Company for a promissory note confirmed a decision to terminate a
long-term charter of that vessel. Pursuant to this transaction, the customer
forgave $450,000 in principal amount of the note payable due from the Company
under a first preferred mortgage on vessels which had a net book value of
$4,222,000 at December 31, 1995, made other adjustments to the mortgage, and
paid the Company a demobilization fee of $235,000. The forgiveness of the
note was recorded as an extraordinary gain, and the demobilization fee was
included in income before extraordinary item.
On July 1, 1993, SEACOR sold $57,500,000 principal amount of 6% Notes. The
agreements under which the 6% Notes were issued provided for underwritten
resales to qualified institutional buyers and to non-U.S. purchasers in
transactions exempt from registration under applicable securities laws. The
6% Notes are convertible into shares of SEACOR's Common Stock at any time
prior to July 1, 2003, at a conversion rate of 39.024 shares per $1,000
principal amount of the 6% Notes. There is no sinking fund for the 6% Notes;
however, the 6% Notes are redeemable, in whole or part, at the election of
SEACOR any time on or after July 1, 1996, initially at 104.2% of the
principal amount thereof and declining by 0.67% each year thereafter to 100%
of the principal amount in 2003. In addition, upon the occurrence of a change
in control of SEACOR (as defined in the indenture of the 6% Notes), holders
of the 6% Notes may elect to require SEACOR to purchase their 6% Notes, in
whole or in part, at a purchase price equal to 100% of the principal amount
thereof, plus accrued interest to the date of purchase. SEACOR incurred
$2,176,000 in costs associated with the sale of the 6% Notes including
$1,869,000 of underwriters discount. These debt issue costs were charged to
other assets and are being amortized to expense over ten years.
In February 1995, the Company purchased $2,250,000 of the then outstanding
$57,500,000 principal amount of its 6% Notes in the open market. The
difference between the amount paid to acquire the 6% Notes and their carrying
value resulted in the Company recognizing a gain of $199,000, net after
giving effect to a write-off of $71,000 in unamortized deferred debt issue
costs associated with the sale of the 6% Notes. The gain is included in other
income.
F-19
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
10. LONG-TERM DEBT: (Continued)
In December 1993, the Company financed, in part, the acquisition of ten
offshore towing supply vessels from CNN with: (i) $12,000,000 principal
amount senior unsecured notes payable having varying maturities of one to ten
years, bearing interest rates ranging from 3.25% to 5.50% per annum and which
have been guaranteed by SEACOR, and (ii) $4,750,000 principal amount of 2.5%
Notes. The 2.5% Notes are convertible into shares of SEACOR's Common Stock at
any time prior to maturity at a conversion rate of 32.979 shares per $1,000
principal amount of the 2.5% Notes. There is no sinking fund for the 2.5%
Notes; however, the 2.5% Notes are redeemable, in whole or part, at the
election of SEACOR any time on or after July 1, 1997, initially at 104.2% of
the principal amount thereof and declining by 0.60% each year thereafter to
100% of the principal amount after July 1, 2003. In addition, upon the
occurrence of a change in control of SEACOR (as defined in the indenture of
the 2.5% Notes), holders of the 2.5% Notes may elect to require SEACOR to
purchase their 2.5% Notes, in whole or in part, at a purchase price equal to
100% of the principal amount thereof, plus accrued interest to the date of
purchase. The stated interest rates on the unsecured notes and the 2.5% Notes
(collectively, the "Notes") were considered lower than interest rates at
which the Company would normally obtain similar financing which were
determined to range from 5.10% to 9.14%. The Notes were valued based on
discounting concepts to approximate their fair market value. The difference
between the Notes' fair market and stated values at inception, $2,749,000,
was recorded as debt discount and as a reduction in the carrying value of the
vessels acquired. Amortized debt discount included in interest expense was
$277,000 and $309,000 for the years ended December 31, 1995 and 1994,
respectively.
Certain of SEACOR's subsidiaries (the "borrowing subsidiaries") are
parties to the DnB Facility, with DnB as lender and SEACOR as guarantor.
Pursuant to the DnB Facility, the borrowing subsidiaries may borrow up to
$85,000,000 aggregate principal amount of senior secured revolving bridge
loans any time prior to August 31, 1996 (the "Initial Term"). At the
Company's election, such loans, on or prior to August 31, 1996, may be
converted into senior secured reducing revolving credit loans maturing on
August 31, 2003. Until termination of the DnB Facility, a commitment fee is
payable to DnB on a quarterly basis, computed at the rate of one-half of one
percent per annum on the average unfunded portion of the credit facility.
During the Initial Term of the DnB Facility, outstanding borrowings bear
interest at an annual rate equal to 125 basis points above LIBOR. If the
Borrowing Subsidiaries elect to convert the senior secured bridge loans to
senior secured reducing revolving credit loans (the "Term Loans"), the
Maximum Committed Amount automatically will decrease semi-annually by certain
percentages described in the DnB Facility. The DnB Facility requires the
Company, on a consolidated basis, to maintain a minimum ratio of indebtedness
to vessel value, as defined, a minimum cash and cash equivalent level, and a
specified debt service coverage ratio. The Company also is prohibited from
entering into additional indebtedness above a certain level without consent.
Furthermore, SEACOR, without prior written consent of DnB, is prohibited
through August 31, 1996 (the maturity date of the bridge loan portion of the
DnB Facility) from paying dividends to its shareholders. Pursuant to the DnB
Facility, the Term Loans would bear interest at the annual rate equal to a
maximum of 150 basis points above LIBOR.
Borrowings outstanding pursuant to the DnB Facility are secured by, among
other things, a guaranty of SEACOR of the obligations of the Borrowing
Subsidiaries, first preferred mortgages on vessels owned by the Borrowing
Subsidiaries which had a net book value of $72,980,000 at December 31, 1995,
a negative pledge relating to certain vessels, and an assignment of earnings
and certain contract rights with respect to vessels owned and operated by the
Borrowing Subsidiaries. If the Borrowing Subsidiaries exercise the
aforementioned conversion election, certain additional subsidiaries of the
Company will be required to guaranty the obligations of the Borrowing
Subsidiaries under the DnB Facility and provide mortgages on additional
vessels to secure such guaranty.
On September 15, 1995, $74,000,000 principal amount was borrowed under the
DnB Facility to finance the acquisition of offshore marine service vessels
and other related assets pursuant to the Graham
F-20
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
10. LONG-TERM DEBT: (Continued)
Acquisition and to pay related debt issue and acquisition costs. On November
14, 1995, the Company repaid $14,000,000 principal amount of the indebtedness
from existing cash balances. On December 14, 1995, the Company borrowed an
additional $11,000,000 under the DnB Facility to finance the cash portion of
the CNN Acquisition and pay related acquisition costs. On December 21, 1995,
the Company repaid $31,000,000 principal amount of the indebtedness with
proceeds from the sale of common stock, and an additional $5,000,000
principal amount was repaid subsequent to year end.
Following the NRC Merger in March 1995, the Company repaid the remaining
outstanding principal balance, $12,500,000, under a Credit Agreement between
NRC and CIBC Inc., as amended.
11. EXTRAORDINARY ITEM:
In 1993, the Company recognized a net extraordinary loss caused by debt
extinguishment of $1,093,000 ($0.19 per share), net of a $588,000 income tax
benefit. Of the extraordinary loss, $1,385,000 was caused by the write-off of
unamortized debt discount, bond issue and debt issue costs, and the payment
of redemption premiums and fees relating to the retirement of outstanding
indebtedness due U.S. Government Guaranteed Ship Financing Bond holders, note
holders and a bank. The redemption premiums, fees, and indebtedness were paid
with the net proceeds from the Company's sale of 6% Notes. The extraordinary
loss was reduced by a $292,000 gain recognized upon the forgiveness of
indebtedness associated with the termination of a vessel charter.
12. LEASES:
From December 1993 through September 30, 1995, the Company was the lessor
of ten offshore towing supply vessels under bareboat charter agreements with
CNN. Pursuant to the CNN Acquisition, the Company and CNN agreed to terminate
CNN's bareboat charter of these vessels. Operating revenue earned from the
bareboat charter of these vessels totaled $3,795,000, $5,074,000 and $350,000
for the years ended December 31, 1995, 1994, and 1993, respectively.
In 1995, the Company entered into a sale-type lease with the TMM Joint
Venture for one anchor handling towing supply vessel. The lease expires in
seven years and contains options which permit the TMM Joint Venture to
purchase the vessel at various dates during the term of the lease. Unearned
income and deferred gain amortized to other income for the year ended
December 31, 1995, totaled $387,000. The following lists the components of
the net investment in the sale-type lease as of December 31, of which
$183,000 and $2,543,000 are reported in current and noncurrent other assets,
respectively, in thousands of dollars:
<TABLE>
<CAPTION>
1995
---------
<S> <C>
Minimum lease payments receivable .......... $ 4,161
Estimated residual value of leased property 781
Less: Unearned income ...................... (2,216)
---------
Net investment in sale-type lease .......... $ 2,726
=========
</TABLE>
Minimum rental receivables due from sale-type leases are $667,000 in each
of the fiscal years ended December 31, 1996 through 2001 and $159,000 due in
2002.
The Company is the lessee under a capital lease for offshore oil boom that
is used in conjunction with its oil spill response activities. The offshore
boom, with gross cost and accumulated depreciation of $1,807,000 and
$269,000, respectively at December 31, 1995, is being depreciated over an
estimated useful life of seven years. Included in current and noncurrent
liabilities, respectively, at December 31, 1995 are $172,000 and $368,000 of
obligations under capital leases. The following is a schedule of future
minimum
F-21
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
12. LEASES: (Continued)
lease payments due under a capital lease together with the present value of
the net minimum lease payments as of December 31, in thousands of dollars:
<TABLE>
<CAPTION>
1995
------
<S> <C>
1996 .................................... $300
1997 .................................... 450
------
Total minimum lease payments ............ 750
Less: amount representing interest ..... 210
------
Present value of minimum lease payments $540
======
</TABLE>
13. MAJOR CUSTOMERS AND SEGMENT DATA:
Two customers accounted for approximately 16% and 12%, respectively, of
revenues in the year ended December 31, 1995; two customers accounted for
approximately 19% and 18%, respectively, of revenues in the year ended
December 31, 1994; and one customer accounted for approximately 22% of
revenues in the year ended December 31, 1993.
Operations are conducted through two business segments, offshore vessel
and environmental services. On March 14, 1995, the remaining outstanding
stock that the Company did not already own, in corporations now comprising
the Company's environmental segment, was acquired, and from that date
forward, the Company has reflected the financial condition and results of
operations of those environmental subsidiaries in its consolidated financial
statements. Prior to March 14, 1995, the Company reported its interest in the
environmental subsidiaries as an investment in 50% or less owned companies
which were accounted for under the equity method. The Company's offshore
service vessel segment operates in different geographical areas; whereas, the
environmental segment's primary operations are in the United States.
Information by business segment and geographical area is as follows for the
years ended December 31, in thousands of dollars:
<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
OPERATING REVENUE:
MARINE --(A)
United States ..................................... $ 52,935 $43,664 $36,416
North Sea ......................................... 13,523 16,222 20,007
West Africa ....................................... 14,276 10,189 12,374
Other Foreign ..................................... 3,770 4,291 4,923
---------- ---------- ----------
84,504 74,366 73,720
ENVIRONMENTAL ...................................... 21,765 -- --
---------- ---------- ----------
$106,269 $74,366 $73,720
========== ========== ==========
OPERATING PROFIT:
MARINE --(A)
United States ..................................... $ 15,544 $11,541 $11,575
North Sea ......................................... (2,952) 7 3,085
West Africa ....................................... 4,012 2,582 1,683
Other Foreign ..................................... 1,843 1,667 1,816
---------- ---------- ----------
18,447 15,797 18,159
ENVIRONMENTAL ...................................... 1,626 -- --
---------- ---------- ----------
20,073 15,797 18,159
Other income (expense) (c) ........................ 190 (73) 116
General corporate administration .................. (2,123) (2,139) (2,268)
Net interest expense .............................. (4,190) (3,337) (3,349)
</TABLE>
F-22
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
13. MAJOR CUSTOMERS AND SEGMENT DATA: (Continued)
<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Minority interest in loss (income) of a subsidiary 321 184 (51)
Equity in earnings of 50% or less owned companies 813 975 287
Income tax expense ................................ (4,858) (3,501) (4,391)
---------- ---------- ----------
Income before extraordinary item .................. $ 10,226 $ 7,906 $ 8,503
========== ========== ==========
IDENTIFIABLE ASSETS:
MARINE --
United States (e) ................................. $173,000 $103,837 $ 88,225
North Sea ......................................... 24,105 32,004 36,860
West Africa (e) ................................... 66,452 41,476 29,428
Other Foreign (b) ................................. 9,850 15,093 42,009
---------- ---------- ----------
273,407 192,410 196,522
ENVIRONMENTAL ...................................... 32,652 -- --
CORPORATE (D) ...................................... 7,132 9,387 839
---------- ---------- ----------
$313,191 $201,797 $197,361
========== ========== ==========
PROVISION FOR DEPRECIATION AND AMORTIZATION:
MARINE --
United States ..................................... $ 6,575 $ 5,179 $ 4,474
North Sea ......................................... 3,621 3,490 3,522
West Africa ....................................... 2,877 2,151 1,220
Other Foreign ..................................... 664 976 692
---------- ---------- ----------
13,737 11,796 9,908
ENVIRONMENTAL ...................................... 2,875 -- --
CORPORATE .......................................... 128 187 98
---------- ---------- ----------
$ 16,740 $ 11,983 $ 10,006
========== ========== ==========
CAPITAL EXPENDITURES:
MARINE --
United States ..................................... $ 74,111 $ 1,247 $ 7,818
North Sea ......................................... 45 225 1,934
West Africa ....................................... 21,636 70 1,020
Other Foreign ..................................... 38 18 32,163
---------- ---------- ----------
95,830 1,560 42,935
ENVIRONMENTAL ...................................... 688 -- --
CORPORATE .......................................... 75 206 14
---------- ---------- ----------
$ 96,593 $ 1,766 $ 42,949
========== ========== ==========
</TABLE>
- ------------
(a) "West Africa" and "Other Foreign" include the results of vessels
bareboat chartered-out to CNN from December 1993 through September
1995, at which time the bareboat charters were canceled and the
Company resumed operation of the vessels.
(b) In 1993, identifiable assets include vessels acquired from CNN that
operated only during December.
(c) Other income (expense) excludes gain/(loss) from equipment sales or
retirements of property and certain other expenses that were
reclassified to operating profit in geographical areas of the Marine
segment.
(d) The Company's corporate assets include investments in 50% or less
owned companies.
(e) In 1995, identifiable assets include the effect of the Graham and CNN
Acquisitions.
F-23
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
14. COMMON STOCK:
In March 1993, SEACOR issued 125,000 shares of common stock at $15.00 per
share or $1,875,000 pursuant to the acquisition of seven supply vessels.
On March 14, 1995, pursuant to the NRC Merger, SEACOR acquired the
remaining 57.1% of the outstanding common stock of NRC Holdings that it did
not already own through a merger of NRC Holdings with and into CRN. SEACOR
issued 292,965 shares of its common stock pursuant to the transaction that
was valued at $5,707,000.
On October 27, 1995, SEACOR and its primary environmental subsidiary, NRC,
amended certain existing agreements with Coastal. Those agreements, among
other things, eliminated certain options held by Coastal to purchase up to
20% of the fully diluted common stock of NRC. SEACOR issued 311,357 shares of
common stock, having a value at time of issuance of $7,500,000, in exchange
for the cancellation of Coastal's stock options in NRC.
On November 14, 1995, pursuant to the CNN Acquisition, SEACOR issued
459,948 shares of common stock that was valued at $11,300,000 at the date of
issuance to acquire three towing supply vessels.
In December 1995, SEACOR completed a public offering of its common stock
that resulted in the sale of 1,612,500 shares. The proceeds received from
this sale, net of underwriting discount, totaled $36,942,000. The Company
incurred $644,000 in expenses associated with this stock offering (other than
underwriting discount) which was charged against additional paid-in capital
arising from the sale. The public offering included 1,550,000 shares of
common stock sold by several of SEACOR's stockholders.
15. MINORITY INTEREST:
In December 1991, the managing agent of the Company's vessels operating in
the North Sea invested approximately $1,278,000 of cash in VEESEA. In return
for this investment and for services rendered to the VEESEA Group, which were
included in mobilization expense, the agent received 9% of the equity of
VEESEA, and SEACOR, through another subsidiary, assigned to the agent a
$679,000 participation in debt due to the SEACOR subsidiary from the VEESEA
Group. The obligation due the agent, including accrued interest at 12% per
annum, was subordinated to the Nedship Bank loans to the VEESEA Group and is
reported in the consolidated balance sheet as other noncurrent liabilities.
A fee is paid the minority stockholder for managing the Company's vessels
in the North Sea. The U.S. dollar equivalent of fees paid in pounds sterling
under this arrangement approximated $960,000 in each of the years ended
December 31, 1995, 1994, and 1993.
16. BENEFIT PLANS:
NON-QUALIFIED STOCK OPTION PLAN --
SEACOR's 1992 Non-Qualified Stock Option Plan (the "Plan") provides for
the grant of non- qualified options to purchase shares of common stock to
officers and key employees of the Company. Under the Plan, 500,000 shares of
common stock have been reserved for sale. The exercise price per share of
options granted under the Plan cannot be less than 75% or greater than 100%
of the "Fair Market Value" (as defined in the Plan) of one share of common
stock on the date of the grant.
Options granted under the Plan expire no later than the tenth anniversary
of the date of grant. Recipients of options must remain employed for at least
two years from date of grant before options become exercisable, subject to
earlier exercise under certain circumstances. The exercise price per share of
each option may be paid in cash, shares of common stock owned by the grantee,
in a combination of cash and common stock or by delivery of a promissory note
not to exceed 90% of the total exercise price.
F-24
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
16. BENEFIT PLANS: (Continued)
The following transactions occurred in the stock option plan during the
years ended December 31,:
<TABLE>
<CAPTION>
1995 1994 1993
------------- -------------- -------------
<S> <C> <C> <C>
Options outstanding, at beginning of year ...... 309,250 266,750 50,000
Options granted ................................. 117,747 42,500 267,500
Options exercised ............................... -- -- --
Options canceled ................................ (1,800) -- (50,750)
------------- -------------- -------------
Options outstanding, at end of year ............. 425,197 309,250 266,750
============= ============== =============
Price range of options exercised ................ $ -- $ -- $ --
Price range of options outstanding, end of year $9.64-21.25 $14.75-21.25 $14.75-21.00
</TABLE>
At December 31, 1995, 74,803 shares were available for future grant and
264,950 options were exercisable. At December 31, 1994 and 1993, there were
no exercisable options.
On March 14, 1995, the Executive Compensation and Stock Option Committee
of the Board of Directors granted two officers of SEACOR and three key
employees of NRC options to purchase a total of 102,192 shares of common
stock of SEACOR at an exercise price of $18.75 per share. Furthermore, as
part of the NRC Merger, the Company assumed the obligations of the NRC
Holdings 1994 Non-Qualified Stock Option Plan. As a result, the Company
converted existing options for shares of NRC Holdings into options for 15,555
shares of SEACOR's common stock at an exercise price of $9.64 per share. The
exercise price per share for options issued or converted in 1995 equaled the
market price at the original dates the options were granted.
SEACOR SAVINGS PLAN --
The Company established the SEACOR Savings Plan ("SEACOR Plan"), effective
July 1, 1994. This defined contribution plan provides eligible employees with
an opportunity to accumulate retirement savings. Requirements for eligibility
include, (i) one year of full time employment, (ii) attainment of 21 years of
age, and (iii) residency in the United States.
Participants may contribute up to 15% of their pre-tax annual
compensation. During 1995 and 1994, the Company matched 50% up to the first
4% of an employee's contribution to the SEACOR Plan, and the Board of
Directors of the Company determine the Company's matching contribution
annually. The participants' and Company's contributions are funded to the
SEACOR Plan monthly.
Participants are fully vested in the Company's contribution upon (i)
attaining the age of 65, (ii) death, (iii) becoming disabled, or (iv)
completing five years of employment service. Forfeitures of Company
contributions for non-vested and terminated employees will be used to reduce
future contributions of the Company or pay administrative expenses of the
SEACOR Plan.
In connection with the NRC Merger, the Company assumed the obligations of
a tax-deferred savings plan that was implemented by NRC in 1993. Under the
terms of the NRC plan, eligible employees can elect to contribute up to 15%
of their compensation, and NRC matches 100% up to the first 3% of the
employee's contribution.
The combined Companies' contributions to the plans were $202,000 and
$51,000 for the years ended December 31, 1995 and 1994, respectively.
EMPLOYEE RESTRICTED STOCK AWARD --
On March 14, 1995, in recognition of an executive officer's commitment to
the continued growth and financial success of the Company, the executive
officer was granted 11,500 restricted shares of SEACOR's
F-25
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
16. BENEFIT PLANS: (Continued)
common stock. The market value of the restricted shares was $216,000 at time
of grant and was recorded as unamortized restricted stock compensation in a
separate component of stockholders' equity. This compensation will be
amortized to expense over a three year vesting period. Notwithstanding the
forgoing, 100% beneficial ownership of the restricted stock shall vest
immediately upon death, disability, termination of the employee without
"cause" or the occurrence of a "change in control" of the Company.
17. QUARTERLY FINANCIAL INFORMATION (UNAUDITED):
<TABLE>
<CAPTION>
QUARTER ENDED
--------------------------------------------
DEC. 31 SEPT. 30 JUNE 30 MARCH 31
--------- ---------- --------- ----------
(THOUSANDS OF DOLLARS, EXCEPT PER SHARE
AMOUNT)
<S> <C> <C> <C> <C>
1995
Revenue ................... $39,385 $31,257 $20,339 $15,288
Gross profit .............. 12,277 7,123 4,315 2,901
Net income ................ 5,011 1,821 1,987 1,407
Earnings per common share:
Assuming no dilution .... 0.74 0.30 0.32 0.24
Assuming full dilution .. 0.60 0.28 0.30 0.24
</TABLE>
18. SUPPLEMENTAL INFORMATION FOR STATEMENTS OF CASH FLOWS:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Cash income taxes paid ..................................... $ 3,842 $3,486 $ 3,083
Cash interest paid ......................................... 5,921 6,510 2,779
Schedule of Non-Cash Investing and Financing Activities:
Property exchanged for investment in and notes receivable
from 50% or less owned company ........................... -- 2,045 --
Joint venture investment increase related to deferred gain 315 718 --
Common stock issued in exchange for stock options in NRC . 7,500 -- --
Purchase of vessels with -- long-term notes, net of
discount .................................................. -- -- 13,185
-- common stock .................. 11,300 -- 1,875
-- 2.5% notes, net of discount . -- -- 3,665
-- accounts receivable .......... -- -- 112
</TABLE>
F-26
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To SEACOR Holdings, Inc.
We have reviewed the accompanying condensed consolidated balance sheet of
SEACOR Holdings, Inc. and subsidiaries as of March 31, 1996, and the related
condensed consolidated statements of operations and cash flows for three
month periods then ended March 31, 1996 and 1995. These financial statements
are the responsibility of the Company's management.
We conducted our reviews 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 financial statements referred to above for them to be
in conformity with generally accepted accounting principles.
Arthur Andersen LLP
New Orleans, Louisiana
May 9, 1996
F-27
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA, UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31,
1996
-----------
<S> <C>
ASSETS
Current Assets:
Cash and temporary cash investments ....................................... $ 24,849
Trade and other receivables, net of allowance for doubtful accounts of $521 36,095
Affiliate receivables ..................................................... 690
Inventories ............................................................... 1,610
Prepaid expenses and other ................................................ 1,677
-----------
Total current assets ................................................... 64,921
-----------
Investments in, at Equity, and Receivables from 50% or Less Owned Companies 6,577
-----------
Property and Equipment ...................................................... 289,645
Less -- Accumulated depreciation .......................................... (59,001)
-----------
Net property and equipment ............................................. 230,644
-----------
Other Assets ................................................................ 14,029
-----------
$316,171
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt ......................................... $ 1,476
Accounts payable -- trade ................................................. 7,480
Accounts payable -- affiliates ............................................ 838
Other current liabilities ................................................. 11,637
-----------
Total current liabilities .............................................. 21,431
-----------
Long-Term Debt, Less Debt Discount of $2,120 and $2,188, respectively ...... 98,557
Deferred Income Taxes ....................................................... 30,177
Deferred Revenue, Gain, and Other Liabilities ............................... 2,253
Minority Interest and Indebtedness to Minority Shareholder .................. 1,834
Stockholders' Equity:
Common stock, $.01 par value, 8,569,593 issued ............................ 86
Additional paid-in capital ................................................ 127,326
Retained earnings ......................................................... 36,735
Less 55,768 shares held in treasury at March 31, 1996 at cost ............. (576)
Less unamortized restricted stock compensation ............................ (140)
Currency translation adjustments .......................................... (1,512)
-----------
Total stockholders' equity ............................................. 161,919
-----------
$316,171
===========
</TABLE>
The accompanying notes are an integral part of these financial statements
and should be read in conjunction herewith.
F-28
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE DATA, UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH
31,
-------------------------
1996 1995
------------ -----------
<S> <C> <C>
Operating Revenue:
Marine ........................................................... $ 37,222 $ 15,288
Environmental --
Oil spill response .............................................. 2,422 --
Retainer fees and other services ................................ 4,431 --
------------ -----------
44,075 15,288
------------ -----------
Costs and Expenses:
Cost of oil spill response ....................................... 2,046 --
Operating expenses --
Marine .......................................................... 21,484 9,267
Environmental ................................................... 1,249 --
Administrative and general ...................................... 5,226 1,406
Depreciation and amortization ................................... 5,165 3,120
------------ -----------
35,170 13,793
------------ -----------
Operating Income ................................................... 8,905 1,495
------------ -----------
Other (Expense) Income:
Interest on debt ................................................. (1,759) (1,215)
Interest income .................................................. 669 659
Gain from equipment sales ........................................ 243 473
Other ............................................................ 249 224
------------ -----------
(598) 141
------------ -----------
Income Before Income Taxes, Minority Interest, and Equity in Net
Earnings of 50% or Less Owned Companies ........................... 8,307 1,636
Income Tax Expense ................................................. 2,931 562
------------ -----------
Income Before Minority Interest and Equity in Net Earnings of 50%
or Less Owned Companies ............................................ 5,376 1,074
Minority Interest in Loss of a Subsidiary .......................... 76 97
Equity in Net Earnings of 50% or Less Owned Companies ............. 141 236
------------ -----------
Net Income ......................................................... $ 5,593 $ 1,407
============ ===========
Earnings Per Common Share -- Assuming No Dilution .................. $ 0.66 $ 0.24
============ ===========
Earnings Per Common Share -- Assuming Full Dilution ................ $ 0.56 $ 0.24
============ ===========
Weighted Average Common Shares:
Assuming no dilution ............................................. 8,524,550 5,894,398
Assuming full dilution ........................................... 11,075,199 8,332,504
</TABLE>
The accompanying notes are an integral part of these financial statements
and should be read in conjunction herewith.
F-29
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS, UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------
1996 1995
--------- ---------
<S> <C> <C>
Net Cash Provided by Operating Activities ....................... $ 9,936 $ 3,627
--------- ---------
Cash Flows from Investing Activities:
Purchase of property and equipment ............................ (1,682) (263)
Proceeds from sale of marine vessels and equipment ............ 624 1,700
Investments in and advances to 50% or less owned companies .... (60) (730)
Principal payments on notes due from 50% or less owned
companies ................................................... 342 --
Cash acquired in a business combination ....................... -- 1,966
Principal payments received under a sale-type lease ........... 42 --
--------- ---------
Net cash provided (used) in investing activities ............. (734) 2,673
--------- ---------
Cash Flows from Financing Activities:
Payments of long-term debt .................................... (8,994) (1,808)
Purchase of 6% convertible subordinated notes ................. -- (1,980)
Proceeds from exercise of stock options ....................... 26 --
--------- ---------
Net cash used in financing activities ........................ (8,968) (3,788)
--------- ---------
Effect of Exchange Rate Changes on Cash and Cash Equivalents ... (22) 12
--------- ---------
Net Increase in Cash and Cash Equivalents ....................... 212 2,524
Cash and Cash Equivalents, Beginning of Period .................. 24,637 40,830
--------- ---------
Cash and Cash Equivalents, End of Period ........................ $24,849 $43,354
========= =========
Supplemental Disclosures of Cash Flow Information:
Cash income taxes paid ........................................ $ 761 $ 352
Cash interest paid ............................................ 742 175
</TABLE>
The accompanying notes are an integral part of these financial statements
and should be read in conjunction herewith.
F-30
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION --
The condensed consolidated financial information for the three-month
periods ended March 31, 1996, and 1995, has been prepared by the Company and
was not audited by its independent public accountants. In the opinion of
management, all adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position, results of operations and
cash flows at March 31, 1996, and for all periods presented have been made.
Results of operations for the interim periods presented are not necessarily
indicative of the operating results for the full year or any future periods.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. These condensed
consolidated financial statements should be read in conjunction with the
financial statements and related notes thereto included in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1995.
2. EARNINGS PER SHARE --
Earnings per common share assuming no dilution were computed based on the
weighted average number of common shares issued and outstanding and the
number of shares expected to be issued under restricted stock grant
agreements during the relevant periods. The additional common stock assumed
to be outstanding to reflect the dilutive effect of other common stock
equivalents (stock options) were excluded from the computation as
insignificant.
Earnings per common share assuming full dilution were computed based on
the weighted average number of shares issued and outstanding, additional
shares assumed to be outstanding to reflect the dilutive effect of all common
stock equivalents using the treasury stock method, and the assumption that
all convertible subordinated notes were converted to common stock. Net income
has been adjusted for interest expense and debt discount amortization (net of
income tax) associated with the convertible subordinated notes.
3. INCOME TAXES --
Income tax expense for the three-month periods ended March 31, 1996, and
1995, was based upon an estimated effective tax rate for the entire fiscal
year of 35% and 34%, respectively.
4. LONG-TERM DEBT --
During the first quarter of 1996, the Company repaid $8,000,000 under a
revolving credit loan facility with Den norske Bank ASA. The revolving credit
loan facility was established by the Company in conjunction with its
acquisition of vessels in 1995.
5. NON-QUALIFIED STOCK OPTION PLAN --
On February 9, 1996, the Executive Compensation and Stock Option Committee
of the Board of Directors granted certain employees options to purchase a
total of 7,300 shares of common stock of the Company at an exercise price of
$30.75 per share under the SEACOR Holdings, Inc. 1992 Non-Qualified Stock
Option Plan. On the date of grant, the stock option price equaled the
Company's common stock trading price at the close of business.
At March 31, 1996, shares available for future grant under the SEACOR
Holdings, Inc. 1992 Non-Qualified Stock Option Plan totaled 67,503.
F-31
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
6. SUBSEQUENT EVENTS --
LETTER OF INTENT:
On April 18, 1996, the Company signed a letter of intent to acquire all of
the capital stock of McCall Enterprises Inc. ("McCall") and affiliated
companies for 1,215,500 shares of common stock of the Company, subject to
adjustments to reflect changes in working capital on the date of closing (the
"McCall Transaction"). Based on the Company's closing sale price on April 17,
1996, the McCall Transaction has a value of approximately $48,900,000. The
McCall Transaction is intended to qualify as a tax free reorganization and to
be consummated in the Company's second quarter of 1996. McCall, based in
Cameron, Louisiana, operates through McCall's Boat Rentals, Inc., a wholly
owned subsidiary of McCall, and other affiliated companies. Its fleet
includes five utility boats and 36 crew boats dedicated to serving the oil
and gas industry, primarily in the U.S. Gulf of Mexico. The McCall
Transaction is conditioned upon, among other things, satisfactory completion
of due diligence, execution of definitive documentation and receipt of
necessary government approvals.
RESTRICTED STOCK AWARDS:
On May 7, 1996, in recognition of a commitment to the continued growth and
financial success of the Company, certain officers and key employees were
granted a total of 12,250 restricted shares of the Company's common stock
under the SEACOR Holdings, Inc. 1996 Share Incentive Plan.
The market value of the restricted shares, amounting to $487,000 at time
of grant, will be recorded as unamortized restricted stock compensation in a
separate component of stockholders' equity. This compensation will be
amortized to expense over a three year vesting period. Notwithstanding the
foregoing, 100% beneficial ownership of the restricted stock shall vest
immediately upon death, disability, termination of the employee without
"cause," or the occurrence of a "change-in-control" of the Company.
F-32
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Stockholders of McCall Affiliated Companies:
We have audited the accompanying combined balance sheet of McCall Affiliated
Companies ("the Companies" -- see Note 1) as of December 31, 1995, and the
related combined statements of operations and retained earnings and cash
flows for the year then ended. These financial statements are the
responsibility of the Companies' management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above presently fairly,
in all material respects, the financial position of the McCall Affiliated
Companies as of December 31, 1995, and the results of their operations and
their cash flows for the year then ended, in conformity with generally
accepted accounting principles.
ARTHUR ANDERSEN LLP
New Orleans, Louisiana,
May 10, 1996
F-33
<PAGE>
MCCALL AFFILIATED COMPANIES
COMBINED BALANCE SHEET
AS OF DECEMBER 31, 1995
<TABLE>
<CAPTION>
<S> <C>
CURRENT ASSETS:
Cash ......................................... $ 3,950,000
Investment securities ........................ 623,000
Accounts receivable .......................... 3,495,000
Prepaid expenses and other ................... 1,236,000
--------------
Total current assets ...................... 9,304,000
INVESTMENT IN 50% OR LESS OWNED COMPANY ...... 163,000
PROPERTY AND EQUIPMENT:
Vessels and equipment ........................ 47,473,000
Other ........................................ 1,327,000
--------------
Total property and equipment .............. 48,800,000
Less -- accumulated depreciation ............. (20,673,000)
--------------
28,127,000
OTHER ASSETS 288,000
--------------
Total assets .............................. $ 37,882,000
==============
CURRENT LIABILITIES:
Current portion of long-term debt ............ $ 156,000
Loans from stockholders ...................... 1,665,000
Accounts payable ............................. 523,000
Accrued salaries and wages ................... 321,000
Accrued liabilities .......................... 40,000
Deferred income taxes ........................ 500,000
--------------
Total current liabilities ................. 3,205,000
LONG-TERM LIABILITIES:
Notes payable -- noncurrent .................. 1,440,000
DEFERRED INCOME TAXES ......................... 6,497,000
STOCKHOLDERS' EQUITY:
Contributed capital .......................... 30,000
Retained earnings ............................ 27,012,000
Less 64 shares held in treasury, at cost .... (302,000)
--------------
Total stockholders' equity ................ 26,740,000
--------------
Total liabilities and stockholders' equity $ 37,882,000
==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-34
<PAGE>
MCCALL AFFILIATED COMPANIES
COMBINED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
<S> <C>
OPERATING REVENUE .............................. $20,029,000
COSTS AND EXPENSES:
Vessel operations ............................. 14,982,000
Administrative and general .................... 1,045,000
Depreciation .................................. 2,102,000
-------------
Total operating expenses ................... 18,129,000
-------------
INCOME FROM OPERATIONS ......................... 1,900,000
-------------
OTHER INCOME (EXPENSES):
Gain on sale of equipment ..................... 85,000
Interest income ............................... 74,000
Interest expense .............................. (195,000)
-------------
(36,000)
-------------
INCOME BEFORE INCOME TAXES ..................... 1,864,000
INCOME TAX EXPENSE (BENEFIT):
Current ....................................... 923,000
Deferred ...................................... (211,000)
-------------
Total income tax expense ................... 712,000
EQUITY IN NET LOSS OF 50% OR LESS OWNED COMPANY (53,000)
-------------
NET INCOME ..................................... $ 1,099,000
=============
RETAINED EARNINGS, beginning of year ........... $25,914,000
NET INCOME ..................................... 1,099,000
DIVIDENDS PAID ................................. (1,000)
-------------
RETAINED EARNINGS, end of year ................. $27,012,000
=============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-35
<PAGE>
MCCALL AFFILIATED COMPANIES
COMBINED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ......................................... $ 1,099,000
Depreciation ....................................... 2,102,000
Gain on sale of equipment .......................... (85,000)
Equity in net loss of 50% or less owned company ... 53,000
Deferred income taxes .............................. (211,000)
Changes in operating assets and liabilities:
Increase in accounts receivable ................... (642,000)
Increase in prepaid expenses and other ............ (712,000)
Increase in accounts payable and accrued expenses 178,000
-------------
Net cash provided by operating activities ...... 1,782,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment ................. (1,671,000)
Purchase of securities ............................. (28,000)
Proceeds from sale of equipment .................... 115,000
Investments in 50% or less owned company .......... (250,000)
-------------
Net cash used in investing activities .......... (1,834,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from capital contributions ................ 4,000
Proceeds from notes payable ........................ 1,625,000
Proceeds from stockholders' loans .................. 658,000
Payments on notes payable .......................... (1,323,000)
Payments on stockholders' loans .................... (463,000)
Dividends paid ..................................... (1,000)
-------------
Net cash provided by financing activities ...... 500,000
NET INCREASE IN CASH AND CASH EQUIVALENTS .......... 448,000
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR ..... 3,502,000
-------------
CASH AND CASH EQUIVALENTS AT END OF YEAR ............ $ 3,950,000
=============
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid in 1995 for taxes ........................ $ 1,100,000
Cash paid in 1995 for interest ..................... $ 211,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-36
<PAGE>
MCCALL AFFILIATED COMPANIES
NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The McCall Affiliated Companies (the "Companies") furnish vessel support
in the offshore oil and gas exploration and production industry. The
Companies operate in the United States Gulf of Mexico.
Principles of Combination
The combined financial statements include the accounts of a group of
affiliated companies which are under the common management of Mr. Norman
McCall and common ownership of Mr. McCall and other family members. McCall
Enterprises, Inc. is the primary holding company of the affiliated companies.
The companies in the group are as follows:
Cameron Boat Rentals, Inc.
Cameron Crews, Inc.
McCall's Boat Rentals, Inc.
Gladys McCall, Inc.
Philip Alan McCall, Inc.
Gulf Marine Transportation, Inc.
Carroll McCall, Inc.
N.F. McCall Crews, Inc.
McCall Marine Services, Inc.
McCall Crewboats, L.L.C.
McCall Support Vessels, Inc.
McCall Enterprises, Inc.
All intercompany balances and transactions have been eliminated.
Each member of the group has a December 31 fiscal year-end except McCall's
Boat Rentals, Inc., which has a fiscal year ending September 30. The
financial information of McCall's Boat Rentals, Inc. has been restated in the
combined financial statements to reflect a year end date of December 31.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Accounts Receivable
Customers of vessel support services are primarily major and large
independent oil and gas exploration and production companies. The Companies'
customers are granted credit on a short-term basis and related credit risks
are considered minimal.
Investments in Marketable Securities
At December 31, 1995, the Companies held $623,000 in investments in U. S.
Government debt securities. These securities are accounted for as
held-to-maturity securities; and, accordingly are reflected at amortized
cost, which approximates fair value at December 31, 1995.
Property and Equipment
Property and equipment are recorded at historical cost and depreciated
over the estimated useful lives of the related assets. Depreciation is
computed on the straight-line method for financial reporting purposes.
Maintenance and repair costs, including routine drydock inspections on
vessels in accordance
F-37
<PAGE>
MCCALL AFFILIATED COMPANIES
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Continued)
with maritime regulations, are charged to operating expense as incurred.
Expenditures that extend the useful life or improve the marketing and
commercial characteristics of vessels and major renewals or improvements to
other properties are capitalized.
Vessels and related equipment are depreciated over 20 years; all other
property and equipment are depreciated and amortized over approximately five
to ten years.
Fair Value of Financial Instruments
The carrying value of long-term debt approximates its fair value.
Loans from stockholders are generally advances made from stockholders. The
Companies believe it is not practicable to estimate the fair market values of
these loans.
Income Taxes
The Companies follow the principles of Statement of Financial Accounting
Standards ("SFAS") No. 109, the financial accounting and reporting standard
for income taxes.
Deferred income tax assets and liabilities have been provided in
recognition of the income tax effect attributable to the difference between
assets and liabilities reported in the tax return and financial statements.
Deferred tax assets or liabilities are provided using the enacted tax rates
expected to apply to taxable income in the periods in which the deferred tax
assets and liabilities are expected to be settled or realized.
Each company files its own Federal income tax return except for Gladys
McCall, Inc., which files a consolidated return with its parent, Cameron Boat
Rentals, Inc. Three of the companies have a net operating loss carryforward
of $31,000. If not offset against future years with net income, $7,000 will
expire in year 2008, $15,000 will expire in the year 2009, and $9,000 will
expire in the year 2010.
McCall Crewboats, L.L.C. is treated as a partnership for income tax
purposes; therefore, income taxes are the responsibility of the individual
members. Accordingly, no provision for income taxes is provided for this
company in the accompanying statement of operations. The operating results of
McCall Crewboats, L.L.C. are not material relative to the combined group.
Revenue Recognition
The Companies' marine transportation business earns revenue primary from
time or bareboat charter of vessels to customers based upon daily rates of
hire. Vessel charters may range from several days to several years.
Earnings Per Share
Management believes that earnings per share for the combined Companies is
not relevant.
New Accounting Standard
In 1995, SFAS No. 121 -- "Accounting for Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed Of" was issued and requires adoption
by the Companies in fiscal 1996. Management believes that such adoption will
not have a material effect on the Companies' financial statements taken as a
whole.
2. INVESTMENT IN 50% OR LESS OWNED COMPANY:
In August 1995, McCall Support Vessels, Inc. ("MSV") and SEACOR Holdings,
Inc. ("SEACOR") organized and formed a Louisiana limited liability company,
SEAMAC OFFSHORE, L.L.C.
F-38
<PAGE>
MCCALL AFFILIATED COMPANIES
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995
2. INVESTMENT IN 50% OR LESS OWNED COMPANY: (Continued)
("SEAMAC") for the primary purpose of acquiring, owning, operating, and
managing marine vessels. SEAMAC's two equally participating members are MSV
and a wholly owned subsidiary of SEACOR. At December 31, 1995, two crew
vessels were bareboat chartered by SEAMAC from the Companies and were
operating in Nigeria. For the year ended December 31, 1995, the Company's
equity in the loss of SEAMAC, net of applicable income taxes, was $53,000. At
December 31, 1995, SEAMAC had one crew vessel with an estimated hull cost of
$1,337,000 and approximately $1,000,000 in engine and electronic costs which
is under construction, and subsequent to year end, the members of SEAMAC
agreed to construct two additional crew vessels with an estimated aggregate
cost of approximately $7.5 million. The members of SEAMAC are expected to
fund the costs to construct these vessels.
3. LONG-TERM DEBT:
Monthly payments on principal and interest at 9.75% per annum are made on
a mortgage note outstanding to one bank on one motor vessel as follows:
<TABLE>
<CAPTION>
MONTHLY
VESSEL PRINCIPAL BALANCE MATURITY
- ---------------- ----------- ------------ ----------
<S> <C> <C> <C>
Phyllis II ...... $ 13,000 $1,596,000 2007
Current portion (156,000)
------------
$1,440,000
</TABLE>
Maturities of long-term debt are as follows:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
- --------------
<S> <C>
1996 .......... $ 156,000
1997 .......... 156,000
1998 .......... 156,000
1999 .......... 156,000
2000 .......... 156,000
Thereafter .... 816,000
-----------
$1,596,000
===========
</TABLE>
4. LOANS FROM STOCKHOLDERS:
The $1,665,000, of loans from stockholders is made up of unsecured loans
due to Norman and Joyce McCall. The loans are due on demand and bear interest
at 7% per annum. Monthly payments of $70,000 of principal are due until the
loans are called. On May 3, 1996, the loans from stockholders were repaid in
full.
F-39
<PAGE>
MCCALL AFFILIATED COMPANIES
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995
5. INCOME TAXES:
Income tax expense (benefit) consisted of the following components for the
year ended December 31, 1995, in thousands of dollars:
<TABLE>
<CAPTION>
1995
-----------
<S> <C>
Current:
State ..... $ 113,000
Federal .. 810,000
-----------
923,000
Deferred:
Federal .. (211,000)
-----------
$ 712,000
===========
</TABLE>
The following table reconciles the difference between the statutory
Federal income tax rate for the Company to the effective income tax rate:
<TABLE>
<CAPTION>
1995
-------
<S> <C>
Statutory rate ............... 34.0%
State income taxes and other 4.2%
-------
38.2%
=======
</TABLE>
The components of the net deferred income tax liability were as follows,
as of December 31, 1995 in thousands of dollars:
<TABLE>
<CAPTION>
1995
---------------
<S> <C>
Deferred tax assets:
Equity in net loss of 50% or less owned company $ 33,000
---------------
Total deferred tax assets ...................... $ 33,000
---------------
Deferred tax liabilities:
Property and equipment .......................... $ (6,420,000)
Other ........................................... (610,000)
---------------
Total deferred tax liabilities ................. $ (7,030,000)
---------------
Net deferred tax liabilities ................... $(6,997,000)
</TABLE>
6. CAPITAL STOCK:
McCall Enterprises, Inc., the principal holding company of the Companies,
has 2,522 shares of no par, non cumulative preferred stock authorized, issued
and outstanding for a total of $12,000 at December 31, 1995. The Companies
have common stock totalling $18,000 after eliminations.
Four companies hold, in their respective treasuries, shares of common
stock purchased ranging in number from approximately 4 to 40, at a cost
ranging from approximately $400 to $8,000 per share. These shares of common
stock represent approximately 4%, 15%, 5%, and 40%, respectively, of the
issued shares of Cameron Boat Rentals, Inc., Gladys McCall, Inc., Cameron
Crews, Inc., and Gulf Marine Transportation, Inc.
F-40
<PAGE>
MCCALL AFFILIATED COMPANIES
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995
7. COMMITMENTS:
As of December 31, 1995 the Companies were committed to the purchase of
two new motor vessels being built at an approximate cost of $4,360,000, with
expected delivery in November, 1996 and March, 1997.
8. 401(K) PLAN:
The Companies established the N. F. McCall Crews, Inc. Employees Savings
Trust ("the Plan") effective August 30, 1995. This defined contribution plan
provides eligible employees with an opportunity to accumulate retirement
savings. Requirements for eligibility include, (i) one year of full time
employment, and (ii) attainment of 21 years of age.
Participants may contribute up to 15% of their pre-tax annual
compensation. During 1995, the Companies matched 1/3 of the first 6% of an
employee's contributions to the Plan. The Board of Directors of the Companies
determine the matching contribution annually. The participants' and
Companies' contributions are funded to the Plan monthly.
In general, participants are fully vested in the Companies' contributions
upon (i) attaining the age of 65, (ii) death, (iii) becoming disabled, or
(iv) completing three years of employment service. Forfeitures of Companies'
contributions for non-vested and terminated employees will be used to reduce
future contributions of the Companies or pay administrative expenses.
The Companies' contribution to the Plan was $13,000 for the year ended
December 31, 1995.
The Companies offer no other employee or post-employment benefits.
9. MAJOR CUSTOMERS
Three customers accounted for 35%, 16% and 11%, respectively, of revenues
in the year ended December 31, 1995.
10. SUBSEQUENT EVENT:
On April 18, 1996, the Companies signed a letter of intent with SEACOR
whereby SEACOR will acquire all of the outstanding capital stock of the
Companies in exchange for 1,215,500 shares of SEACOR common stock. The
transaction is expected to qualify as a tax-free reorganization and be
consummated in the second quarter of 1996. It is conditioned upon, among
other things, satisfactory completion of due diligence, execution of
definitive documentation and receipt of necessary governmental approvals.
F-41
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To McCall Affiliated Companies:
We have reviewed the accompanying condensed combined balance sheet of McCall
Affiliated Companies as of March 31, 1996, and the related condensed combined
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 reviews 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 reviews, we are not aware of any material modifications that
should be made to the financial statements referred to above for them to be
in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
New Orleans, Louisiana,
May 17, 1996
F-42
<PAGE>
MCCALL AFFILIATED COMPANIES
CONDENSED COMBINED BALANCE SHEET
AS OF MARCH 31, 1996
<TABLE>
<CAPTION>
<S> <C>
CURRENT ASSETS:
Cash ........................................... $ 5,532,000
Investment securities .......................... 923,000
Accounts receivable ............................ 3,461,000
Prepaid expenses and other ..................... 766,000
--------------
Total current assets ........................ 10,682,000
INVESTMENT IN 50% OR LESS OWNED COMPANY ........ 250,000
PROPERTY AND EQUIPMENT .......................... 48,800,000
Less -- accumulated depreciation ............... (21,208,000)
--------------
27,592,000
OTHER ASSETS .................................... 288,000
--------------
Total assets ................................ $ 38,812,000
==============
CURRENT LIABILITIES:
Current portion of long-term debt .............. $ 156,000
Loans from stockholders ........................ 1,570,000
Accounts payable and other current liabilities 1,740,000
Total current liabilities ................... 3,466,000
LONG-TERM LIABILITIES:
Notes payable -- noncurrent .................... 1,325,000
DEFERRED INCOME TAXES ........................... 6,551,000
STOCKHOLDERS' EQUITY:
Contributed capital ............................ 30,000
Retained earnings .............................. 27,742,000
Less 64 shares held in treasury, at cost ...... (302,000)
--------------
Total stockholders' equity .................. 27,470,000
--------------
Total liabilities and stockholders' equity . $ 38,812,000
==============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
F-43
<PAGE>
MCCALL AFFILIATED COMPANIES
CONDENSED COMBINED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH
31,
--------------------------
1996 1995
------------ ------------
<S> <C> <C>
OPERATING REVENUE $5,328,000 $4,895,000
COSTS AND EXPENSES:
Vessel operations .......................... 3,412,000 3,889,000
Administrative and general ................. 295,000 256,000
Depreciation ............................... 535,000 520,000
------------ ------------
Total operating expenses ................ 4,242,000 4,665,000
------------ ------------
INCOME FROM OPERATIONS 1,086,000 230,000
------------ ------------
OTHER INCOME (EXPENSE):
Interest income ............................ 11,000 11,000
Interest expense ........................... (62,000) (30,000)
------------ ------------
(51,000) (19,000)
------------ ------------
INCOME BEFORE INCOME TAXES AND EQUITY IN NET
EARNINGS OF 50% OR LESS OWNED COMPANY 1,035,000 211,000
INCOME TAX EXPENSE 362,000 81,000
------------ ------------
INCOME BEFORE EQUITY IN NET EARNINGS OF 50%
OR LESS OWNED COMPANY 673,000 130,000
EQUITY IN NET EARNINGS OF 50% OR LESS OWNED
COMPANY 57,000 --
------------ ------------
NET INCOME $ 730,000 $ 130,000
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-44
<PAGE>
MCCALL AFFILIATED COMPANIES
CONDENSED COMBINED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH
31,
-------------------------
1996 1995
------------ -----------
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES $2,092,000 $ 482,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment ........... -- (1,000)
Purchase of securities ....................... (300,000) --
------------ -----------
Net cash used in investing activities .... (300,000) (1,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on notes payable .................... (115,000) (661,000)
Payments on stockholders' loans .............. (95,000) (50,000)
------------ -----------
Net cash provided by financing activities (210,000) (711,000)
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 1,582,000 (230,000)
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 3,950,000 3,502,000
------------ -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $5,532,000 $3,272,000
============ ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
F-45
<PAGE>
MCCALL AFFILIATED COMPANIES
NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS
MARCH 31, 1996
1. BASIS OF PRESENTATION:
The condensed consolidated financial information for the three-month
periods ended March 31, 1996 and 1995 has been prepared by the Companies and
was not audited by its independent public accountants. In the opinion of
management, all adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position, results of operations and
cash flows at March 31, 1996, and for all periods presented have been made.
Result of operations for the interim periods presented are not necessarily
indicative of the operating results for the full year or any future periods.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. These condensed
combined financial statements should be read in conjunction with the
financial statements and related notes thereto for the fiscal year ended
December 31, 1995 included herein.
Income Taxes
Income tax expense for the three-month periods ended March 31, 1996 and
1995 was based upon an estimated effective tax rate for the entire fiscal
year of 35% and 38%, respectively.
Earnings Per Share
Management believes that earnings per share for the combined Companies is
not relevant.
2. SUBSEQUENT EVENT:
On April 18, 1996, the Companies signed a letter of intent with SEACOR
Holdings, Inc. ("SEACOR") whereby SEACOR will acquire all of the outstanding
capital stock of the Companies in exchange for 1,215,500 shares of SEACOR
common stock plus an adjustment for working capital. The transaction is
expected to qualify as a tax-free reorganization and be consummated in the
second quarter of 1996. It is conditioned upon, among other things,
satisfactory completion of due diligence, execution of definitive
documentation and receipt of necessary governmental approvals.
F-46
<PAGE>
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE SELLING STOCKHOLDERS OR
ANY UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE SUCH DATE.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
Prospectus Summary ........................... 3
Risk Factors ................................. 11
Recent Developments .......................... 16
Use of Proceeds .............................. 19
Price Range of Common Stock .................. 19
Capitalization ............................... 20
Report of Independent Public Accountants .... 21
Pro Forma Financial Statements ............... 22
Selected Historical Financial Information ... 30
Management's Discussion and Analysis of
Financial Condition and Results of
Operations .................................. 32
Business ..................................... 45
Management ................................... 54
Selling Stockholders ......................... 57
Underwriting ................................. 59
Legal Matters ................................ 60
Experts ...................................... 60
Available Information ........................ 61
Incorporation of Certain Information by
Reference ................................... 61
Limitation on Foreign Ownership of Common
Stock ....................................... 62
Glossary of Selected Industry Terms ......... 63
Index to Consolidated Financial Statements .. F-1
</TABLE>
- -------------------------------------------------------------------------------
GRAPHIC OMITTED
- -------------------------------------------------------------------------------
SEACOR Holdings, Inc.
1,595,316 Shares
Common Stock
($.01 par value)
PROSPECTUS
CS First Boston
Salomon Brothers Inc
Wasserstein Perella
Securities, Inc.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The table below sets forth the estimated expenses of the Offering (other
than underwriting discounts and commissions):
<TABLE>
<CAPTION>
<S> <C>
SEC Registration Fee ........................... $ 30,286.93
Nasdaq National Market Listing Fee ............. 17,500.00
NASD Filing Fee ................................ 9,280.00
"Blue Sky" Fees and Expenses ................... 10,000.00
Legal Fees and Expenses ........................ 200,000.00
Accounting Fees and Expenses ................... 50,000.00
Printing and Engraving Expenses ................ 150,000.00
Transfer Agent and Registrar Fees and Expenses 8,000.00
Miscellaneous Fees and Expenses ................ 24,933.07
------------
Total .......................................... $500,000.00
============
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As more fully described below, Section 145 of the DGCL permits Delaware
corporations to indemnify each of their present and former directors or
officers under certain circumstances, provided that such persons acted in
good faith and in a manner which they reasonably believed to be in, or not
opposed to, the best interests of the corporation. Article Eight of SEACOR's
By-laws provides that the Company shall indemnify, to the fullest extent
permitted by Section 145 of the DGCL, as the same may be amended from time to
time, all persons whom it may indemnify pursuant to such section.
Specifically, Section 145 of the DGCL provides that a corporation may
indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an
action by or in the right of the corporation) by reason of the fact that he
is or was a director, officer, employee, or agent of the corporation, or is
or was serving at the request of the corporation as a director, officer,
employee, or agent of another corporation, partnership, joint venture, trust
or other enterprise against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by him
in connection with such action, suit, or proceeding if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, or, with respect to any criminal action or
proceeding, that he had reasonable cause to believe that his conduct was
unlawful.
Section 145 of the DGCL also provides that a corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that he
is or was a director, officer, employee, or agent of the corporation, or is
or was serving at the request of the corporation as a director, officer,
employee, or agent of another corporation or is or was serving at the request
of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by him
in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in
which such action or suit was brought shall determine upon adjudication
II-1
<PAGE>
that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
Any such indemnification (unless ordered by a court) shall be made by the
corporation only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances because such person has met the applicable standard of conduct
set forth above.
Section 145 of the DGCL permits a Delaware business corporation to
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against such person and incurred by him in any
such capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify such person.
Section 102(b) of the DGCL enables a Delaware corporation to include a
provision in its certificate of incorporation limiting a director's liability
to the corporation or its stockholders for monetary damages for breaches of
fiduciary duty as a director. The Company's Certificate of Incorporation
contains provisions that limit the personal liability of each director to the
Registrant or its stockholders for monetary damages for breach of the
fiduciary duty of care as a director. These provisions eliminate personal
liability to the fullest extent permitted by the Delaware General Corporation
Law.
ITEM 16. EXHIBITS AND FINANCIAL SCHEDULES
(a) Exhibits
1.0 Form of Underwriting Agreement.
5.1 Legal Opinion of Weil, Gotshal & Manges LLP.*
10.0 The Master Agreement, dated as of June 6, 1996, by and among
Compagnie Nationale de Navigation, SEACOR Holdings, Inc. and SEACOR
Worldwide Inc.
15.1 Letter from Arthur Andersen LLP regarding use of unaudited interim
financial statements.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Weil, Gotshal & Manges LLP (included in its opinion filed
as Exhibit 5.1).*
23.3 Consent of Coopers & Lybrand L.L.P.
23.4 Consent of Dudley, Ruland & Chateau P.C.
24.0 Powers of Attorney (included on the signature pages hereto).
- ------------
* To be filed by amendment.
(b) Financial Statement Schedules
<TABLE>
<CAPTION>
<S> <C>
Report of Independent Public Accountants on Financial Statement Schedule ... S-1
II -- Valuation and Qualifying Accounts for each of the three years ended
December 31, 1995 .......................................................... S-2
</TABLE>
All schedules, except those set forth above, have been omitted since the
information required is included in the financial statements or notes or have
been omitted as not applicable or not required.
II-2
<PAGE>
ITEM 17. UNDERTAKINGS
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be
a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(e) The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the Prospectus, to each person to whom the Prospectus is sent
or given, the latest annual report, to security holders that is incorporated
by reference in the Prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Exchange Act; and, where
interim financial information required to be presented by Article 3 of
Regulation S-X is not set forth in the Prospectus, to deliver, or cause to be
delivered to each person to whom the Prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in the
Prospectus to provide such interim financial information.
(i) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus 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.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused the registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York on June 7, 1996.
SEACOR HOLDINGS, INC.
By: /s/ Randall Blank
-----------------------------------
Randall Blank
Executive Vice President,
Chief Financial Officer and
Secretary
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears
below on this Registration Statement hereby constitutes and appoints Charles
Fabrikant and Randall Blank and each of them, 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 or supplements (including post-effective amendments thereto) to
this Form S-3 Registration Statement of SEACOR Holdings, Inc. and any
registration statement filed pursuant to Rule 462 and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto each said attorneys-in-fact
and agents, full power and authority to do and perform each and every act and
thing requisite and necessary fully to all intents and purposes as he might
or could do in person, thereby ratifying and confirming all that each of said
attorneys-in-fact and agents, or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ Charles Fabrikant Chairman of the Board of June 7, 1996
-------------------------------- Directors, President and
Charles Fabrikant Chief Executive Officer
/s/ Randall Blank Executive Vice President, June 7, 1996
-------------------------------- Chief Financial Officer and
Randall Blank Secretary (Principal
Financial Officer)
/s/ Granville E. Conway Director June 7, 1996
--------------------------------
Granville E. Conway
/s/ Michael E. Gellert Director June 7, 1996
--------------------------------
Michael E. Gellert
/s/ Robert J. Pierot Director June 7, 1996
--------------------------------
Robert J. Pierot
/s/ Stephen Stamas Director June 7, 1996
--------------------------------
Stephen Stamas
II-4
<PAGE>
/s/ Richard M. Fairbanks III Director June 7, 1996
--------------------------------
Richard M. Fairbanks III
/s/ Pierre de Demandolx Director June 7, 1996
--------------------------------
Pierre de Demandolx
/s/ Lenny P. Dantin Vice President and Treasurer June 7, 1996
-------------------------------- (Principal Accounting Officer
Lenny P. Dantin and Controller)
</TABLE>
II-5
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE
To SEACOR Holdings, Inc.:
We have audited in accordance with generally accepted auditing standards,
the consolidated financial statements of SEACOR Holdings, Inc. and its
subsidiaries and have issued our report thereon dated February 20, 1996. Our
audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The schedule listed in the index above is the
responsibility of the Company's management and is presented for the purpose
of complying with the Securities and Exchange Commission's rules and is not
part of the basic financial statements. This schedule has been subjected to
the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, fairly states in all material respects the
financial data required to be set forth therein in relation to the basic
financial statements taken as a whole.
Arthur Andersen LLP
New Orleans, Louisiana
February 20, 1996
S-1
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993, AND 1992
(IN THOUSANDS)
<TABLE>
<CAPTION>
BALANCE CHARGED TO CHARGED TO BALANCE
BEGINNING COST AND OTHER (A) END OF
DESCRIPTION OF YEAR EXPENSES ACCOUNTS DEDUCTIONS YEAR
- ------------------------------------ ----------- ------------ ------------ ------------ ---------
<S> <C> <C> <C> <C> <C>
Year Ended December 31, 1994
Allowance for doubtful accounts
(deducted from accounts receivable) $10 $98 $-- $-- $108
=========== ============ ============ ============ =========
Year Ended December 31, 1993
Allowance for doubtful accounts
(deducted from accounts receivable) $-- $20 $-- $10 $ 10
=========== ============ ============ ============ =========
Year Ended December 31, 1992
Allowance for doubtful accounts
(deducted from accounts receivable) $36 $-- $-- $36 $ --
=========== ============ ============ ============ =========
</TABLE>
- ------------
(a) Recovery of accounts receivable which had been previously reserved as
uncollectible or accounts receivable amounts deemed uncollectible and
removed from accounts receivable and allowance for doubtful accounts.
The notes which accompany the financial statements included in the Form 10-K
are an integral part of this schedule and should be read in conjunction
herewith.
S-2
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION PAGE NO.
- ----------- ----------------------------------------------------------------------------------------- --------
<S> <C> <C>
1.0 Form of Underwriting Agreement.
5.1 Legal Opinion of Weil, Gotshal & Manges LLP.*
The Master Agreement, dated as of June 6, 1996, by and among Compagnie Nationale de Navigation,
10.0 SEACOR Holdings, Inc. and SEACOR Worldwide Inc.
15.1 Letter from Arthur Andersen LLP regarding use of unaudited interim financial statements.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Weil, Gotshal & Manges LLP (included in its opinion filed as Exhibit 5.1).*
23.3 Consent of Coopers & Lybrand L.L.P.
23.4 Consent of Dudley, Ruland & Chateau P.C.
24.0 Powers of Attorney (included on signature pages hereto).
</TABLE>
- ------------
* To be filed by amendment.
EXHIBIT 1.0
Seacor Holdings, Inc.
Shares*
Common Stock
(par value $.01 per share)
Form of
Underwriting Agreement
New York, New York
, 1996
CS First Boston Corporation
Salomon Brothers Inc
Wasserstein Perella Securities, Inc.
As Representatives of the several Underwriters,
c/o CS First Boston Corporation
Park Avenue Plaza
55 East 52nd Street
New York, New York 10055
Dear Sirs:
Seacor Holdings, Inc., a Delaware corporation (the
"Company"), proposes to sell to the underwriters named in
Schedule I hereto (the "Underwriters"), for whom you (the
"Representatives") are acting as representatives,
shares of Common Stock, par value $.01 per share
("Common Stock") of the Company, and the persons named in
Schedule II hereto (the "Selling Stockholders") propose to
sell to the Underwriters shares of Common Stock
(said shares to be issued and sold by the Company and said
shares to be sold by the Selling Stockholders collectively
being hereinafter called the "Underwritten Securities").
The Company also proposes to grant to the Underwriters an
option to purchase up to additional shares of Common
Stock (the "Option Securities"; the Option Securities,
together with the Underwritten Securities, collectively
being hereinafter called the "Securities").
- --------
*Plus an option to purchase from Seacor Holdings, Inc.
up to additional shares to cover over-allotments.
2
1. Representations and Warranties.
(a) The Company represents and warrants to, and
agrees with, each Underwriter as set forth below in
this Section 1. Certain terms used in this Section 1
are defined in paragraph (iii) hereof.
(i) The Company meets the requirements for
use of Form S-3 under the Securities Act of 1933
(the "Act") and has filed with the Securities and
Exchange Commission (the "Commission") a registra-
tion statement (file number 333- ) on such
Form, including a related preliminary prospectus,
for the registration under the Act of the offering
and sale of the Securities. The Company may have
filed one or more amendments thereto, including
the related preliminary prospectus, each of which
has previously been furnished to you. The Company
will next file with the Commission either
(A) prior to effectiveness of such registration
statement, a further amendment to such
registration statement (including the form of
final prospectus) or (B) after effectiveness of
such registration statement, a final prospectus in
accordance with Rules 430A and 424(b)(1) or (4).
In the case of clause (B), the Company has
included in such registration statement, as
amended at the Effective Date, all information
(other than Rule 430A Information) required by the
Act and the rules thereunder to be included in the
Prospectus with respect to the Securities and the
offering thereof. As filed, such amendment and
form of final prospectus, or such final
prospectus, shall contain all Rule 430A Informa-
tion, together with all other such required
information, with respect to the Securities and
the offering thereof and, except to the extent the
Representatives shall agree in writing to a
modification, shall be in all substantive respects
in the form furnished to you prior to the
Execution Time or, to the extent not completed at
the Execution Time, shall contain only such
specific additional information and other changes
(beyond that contained in the latest Preliminary
Prospectus) as the Company has advised you, prior
to the Execution Time, will be included or made
therein. Upon your request, but not without your
prior agreement, the Company also will file a
3
Rule 462(b) Registration Statement in accordance
with Rule 462(b).
(ii) On the Effective Date, the Registration
Statement did or will, and when the Prospectus is
first filed (if required) in accordance with
Rule 424(b) and on the Closing Date, the Prospec-
tus (and any supplements thereto) will, comply in
all material respects with the applicable require-
ments of the Act, the Securities Exchange Act of
1934 (the "Exchange Act") and the respective rules
thereunder; on the Effective Date, the Registra-
tion Statement did not or will not contain any
untrue statement of a material fact or omit to
state any material fact required to be stated
therein or necessary in order to make the state-
ments therein not misleading; and, on the Effec-
tive Date, the Prospectus, if not filed pursuant
to Rule 424(b), did not or will not, and on the
date of any filing pursuant to Rule 424(b) and on
the Closing Date, the Prospectus (together with
any supplement thereto) will not, include any
untrue statement of a material fact or omit to
state a material fact necessary in order to make
the statements therein, in the light of the cir-
cumstances under which they were made, not mis-
leading; provided, however, that the Company makes
no representations or warranties as to the infor-
mation contained in or omitted from the Registra-
tion Statement, or the Prospectus (or any supple-
ment thereto) in reliance upon and in conformity
with information furnished in writing to the
Company by or on behalf of any Underwriter through
the Representatives specifically for inclusion in
the Registration Statement or the Prospectus (or
any supplement thereto).
(iii) The terms which follow, when used in
this Agreement, shall have the meanings indicated.
The term "the Effective Date" shall mean each date
that the Registration Statement and any post-
effective amendment or amendments thereto or any
Rule 462(b) Registration Statement became or
become effective and each date after the date
hereof on which a document incorporated by refer-
ence is filed by the Company with the Commission
under the Exchange Act. "Execution Time" shall
mean the date and time that this Agreement is
4
executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean any prelim-
inary prospectus referred to in paragraph (a)(i)
above and any preliminary prospectus included in
the Registration Statement at the Effective Date
that omits Rule 430A Information. "Prospectus"
shall mean the prospectus relating to the Secu-
rities that is first filed pursuant to Rule 424(b)
after the Execution Time or, if no filing pursuant
to Rule 424(b) is required, shall mean the form of
final prospectus relating to the Securities
included in the Registration Statement at the
Effective Date. "Registration Statement" shall
mean the registration statement referred to in
paragraph (a)(i) above, including incorporated
documents, exhibits and financial statements, as
amended at the Execution Time (or, if not effec-
tive at the Execution Time, in the form in which
it shall become effective) and, in the event any
post-effective amendment thereto or any
Rule 462(b) Registration Statement becomes effec-
tive prior to the Closing Date (as hereinafter
defined), shall also mean such registration state-
ment as so amended. Such term shall include any
Rule 430A Information deemed to be included
therein at the Effective Date as provided by
Rule 430A. "Rule 424", "Rule 430A", "Rule 462(b)"
and "Regulation S-K" refer to such rules or regu-
lation under the Act. "Rule 430A Information"
means information with respect to the Securities
and the offering thereof permitted to be omitted
from the Registration Statement when it becomes
effective pursuant to Rule 430A. "Rule 462(b)
Registration Statement" shall mean a registration
statement filed pursuant to Rule 462(b) relating
to the offering covered by the initial Registra-
tion Statement (File No. 333- ). Any
reference herein to the Registration Statement, a
Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the documents
incorporated by reference therein pursuant to
Item 12 of Form S-3 which were filed under the
Exchange Act on or before the Effective Date of
the Registration Statement or the issue date of
such Preliminary Prospectus or the Prospectus, as
the case may be; and any reference herein to the
terms "amend", "amendment" or "supplement" with
respect to the Registration Statement, any
5
Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the filing of any
document under the Exchange Act after the
Effective Date of the Registration Statement, or
the issue date of any Preliminary Prospectus or
the Prospectus, as the case may be, deemed to be
incorporated therein by reference.
(iv) Neither the Company nor any of its sub-
sidiaries has sustained since the date of the
latest audited financial statements included in
the Prospectus any material loss or interference
with its business from fire, explosion, flood or
other calamity, whether or not covered by insur-
ance, or from any labor dispute or court or gov-
ernmental action, order or decree, otherwise than
as set forth or contemplated in the Prospectus;
and, since the respective dates as of which infor-
mation is given in the Registration Statement and
the Prospectus, there has not been any change in
the capital stock or long-term debt of the Company
or any of its subsidiaries or any material adverse
change, or any development involving a prospective
material adverse change, in or affecting the
general affairs, management, financial position,
stockholders' equity or results of operations of
the Company and its subsidiaries, taken as a
whole, otherwise than as set forth or contemplated
in the Prospectus.
(v) The Company and its subsidiaries have
good title to all real and personal property owned
by them free and clear of all liens, encumbrances
and defects other than liens in respect of crews'
wages, salaries, general average, demurrage,
claims arising under maritime torts and maritime
contract liens, mortgages and other security
interests relating to the DnB Facility (as
defined), mortgages in favor of Dowell
Schlumberger on the Big Orange 25 and the Strong
Cajun, mortgages in favor of Coastal Refining and
Marketing, Inc. and Phibro Energy USA, Inc. on the
NRC Admiral, the NRC Defender, the NRC Endeavor,
the NRC Guardian, the NRC Patriot, the NRC
Protector, the NRC Resolute, the NRC Sentinel, the
NRC Sentry, the NRC Valiant and the NRC Vigilant
[to be reviewed] and except such as are described
in the Prospectus or such as do not materially
6
affect the value of such property and do not
interfere with the use made and proposed to be
made of such property by the Company and its
subsidiaries; any real property and buildings held
under lease by the Company and its subsidiaries
are held by them under valid, subsisting leases
enforceable against them with such exceptions as
are not material and do not interfere with the use
made and proposed to be made of such property and
buildings by the Company and its subsidiaries;
since entering into the DnB Facility on
September 15, 1995, neither the Company nor any of
its subsidiaries has granted or conveyed any
mortgage or any other security interest with
respect to any of its vessels; and since
September 15, 1995, the only vessels the Company
has sold are the Brenda G., the Jean G., the
Lisa G., the Louise G., the Mary G., the
Herman G., the Willie G., the Matt G., the
Chris G., the Hazel G., the Jennie G. and the
Big Orange 24.
(vi) The Company has been duly incorporated
and is validly existing as a corporation in good
standing under the laws of the State of Delaware,
with power and authority (corporate and other) to
own its properties and conduct its business as
described in the Prospectus, and has been duly
qualified as a foreign corporation for the trans-
action of business and is in good standing under
the laws of each other jurisdiction in which it
owns or leases properties, or conducts any busi-
ness, so as to require such qualification, except
where the failure to be so qualified would not
have a material adverse effect on the general
affairs, prospects, management, financial posi-
tion, stockholders' equity or result of operations
of the Company and its subsidiaries, taken as a
whole (a "Material Adverse Effect"); and each sub-
sidiary of the Company has been duly incorporated
and is validly existing as a corporation in good
standing under the laws of its jurisdiction of
incorporation.
(vii) The Company has an authorized capital-
ization as set forth under the heading "Capital-
ization" in the Prospectus, and all of the out-
standing shares of capital stock of the Company
7
have been validly authorized and issued, are fully
paid and non-assessable and conform to the
description of the capital stock of the Company
incorporated by reference in the Prospectus; and
all of the outstanding shares of capital stock of
each subsidiary of the Company have been validly
authorized and issued, are fully paid and non-
assessable and (except for directors' qualifying
shares and except as set forth in the Prospectus)
are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances,
equities or claims.
(viii) The unissued Securities to be issued and
sold by the Company to the Underwriters hereunder
have been validly authorized and, when issued and
delivered against payment therefor as provided
herein, will be validly issued and fully paid and
non-assessable and will conform to the description
of the Common Stock incorporated by reference in
the Prospectus.
(ix) The issuance and sale of the Securities
by the Company and the compliance by the Company
with all of the provisions of this Agreement and
the consummation by the Company of the
transactions herein contemplated will not conflict
with or result in a breach or violation of any of
the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of
trust, loan agreement, stockholders' agreement or
other agreement or instrument to which the Company
or any of its subsidiaries is a party or by which
the Company or any its subsidiaries is bound or to
which any of the property or assets of the Company
or any of its subsidiaries is subject, nor will
such action result in any violation of the provi-
sions of the Restated Certificate of Incorporation
or Amended By-laws of the Company or any statute
or any order, rule or regulation of any court or
governmental agency or body having jurisdiction
over the Company or any of its subsidiaries or any
of their properties; and no consent, approval,
authorization, order, registration or qualifica-
tion of or with any such court or governmental
agency or body is required for the issuance and
sale of the Securities or the consummation by the
Company of the transactions contemplated by this
8
Agreement, except the registration under the Act
of the Securities and such consents, approvals,
authorizations, registrations or qualifications as
may be required under state securities or Blue Sky
laws in connection with the purchase and distribu-
tion of the Securities by the Underwriters.
(x) Other than as set forth in the Pro-
spectus, there are no legal or governmental pro-
ceedings pending to which the Company or any of
its subsidiaries is a party or of which any prop-
erty of the Company or any of its subsidiaries is
the subject which, if determined adversely to the
Company or any of its subsidiaries, would indi-
vidually or in the aggregate have a Material
Adverse Effect; and, to the best of the Company's
knowledge, no such proceedings are threatened by
governmental authorities or threatened by others.
(xi) The Company is a citizen of the United
States within the meaning of Section 2 of the
Shipping Act of 1916, as amended (the "Shipping
Act") and is qualified to engage in the coastwise
trade of the United States; the issue and sale of
the Securities by the Company and the compliance
by the Company with all of the provisions of this
Agreement and the consummation of the transactions
herein contemplated will not cause the Company to
cease to be a citizen of the United States within
the meaning of Section 2 of the Shipping Act or
cause the Company to cease to be qualified to
engage in the coastwise trade of the United
States.
(xii) The Company and its subsidiaries hold
all licenses, consents and approvals required by,
and are in compliance with, all regulations of
state, Federal and foreign governmental author-
ities that regulate the conduct of the business of
the Company and its subsidiaries, except where the
failure to hold any such license, consent or
approval or to be in compliance with any such
regulation would not have a Material Adverse
Effect.
(xiii) National Response Corporation ("NRC")
has been designated an Oil Spill Removal Organ-
9
ization by the U.S. Coast Guard pursuant to the
Oil Pollution Act of 1990.
(xiv) Except as disclosed in the Prospectus,
there are no contracts, agreements or
understandings between the Company and any person
that would give rise to a valid claim against the
Company or any Underwriter for a brokerage
commission, finder's fee or other like payment.
(b) Each Selling Stockholder represents and
warrants to, and agrees with, each Underwriter that:
(i) Such Selling Stockholder is the lawful
owner of the Securities to be sold by such Selling
Stockholder hereunder and upon sale and delivery
of, and payment by the Underwriters for, such
Securities, as provided herein, such Selling
Stockholder will convey good and marketable title
to such Securities, free and clear of all liens,
encumbrances, equities and claims whatsoever.
(ii) While such Selling Stockholder has made
no independent inquiry with respect to such
matters, such Selling Stockholder has no reason to
believe that the representations and warranties of
the Company contained in this Section 1 are not
true and correct, and has no knowledge of any
material fact, condition or information not
disclosed in the Prospectus or any supplement
thereto which has adversely affected or may
adversely affect the business of the Company or
any of its subsidiaries; and the sale of
Securities by such Selling Stockholder pursuant
hereto is not prompted by any information
concerning the Company or any of its subsidiaries
which is not set forth in the Prospectus or any
supplement thereto.
(iii) Such Selling Stockholder has not taken
and will not take (or cause any person to take)
any action which causes or results, under the
Exchange Act or otherwise, in stabilization or
manipulation of the price of any security of the
Company to facilitate the sale or resale of the
Securities and has not effected any sales of
shares of Common Stock which, if effected by the
10
issuer, would be required to be disclosed in
response to Item 701 of Regulation S-K.
(iv) Certificates in negotiable form for such
Selling Stockholder's Securities have been placed
in custody, for delivery pursuant to the terms of
this Agreement, under a Power of Attorney and
Custody Agreement duly authorized, executed and
delivered by such Selling Stockholders, in the
form heretofore furnished to you (the "Custody
Agreement") with Charles Fabrikant and
Stephen Stamas as Custodians and Attorneys-in-Fact
(the "Custodians"); the Securities represented by
the certificates so held in custody for each
Selling Stockholder are subject to the interests
hereunder of the Underwriters, the Company and the
other Selling Stockholders; the arrangements for
custody and delivery of such certificates, made by
such Selling Stockholder hereunder and under the
Custody Agreement, are not subject to termination
by any acts of such Selling Stockholder, or by
operation of law, whether by the death or
incapacity of such Selling Stockholder or the
occurrence of any other event, except as
specifically set forth in the Custody Agreement;
and if any such death, incapacity or any other
such event shall occur before the delivery of such
Securities hereunder, certificates for the Secu-
rities will be delivered by the Custodian in
accordance with the terms and conditions of this
Agreement and the Custody Agreement as if such
death, incapacity or other event had not occurred,
regardless of whether or not the Custodian shall
have received notice of such death, incapacity or
other event.
(v) No consent, approval, authorization or
order of any court or governmental agency or body
is required for the consummation by such Selling
Stockholder of the transactions contemplated
herein, except such as may have been obtained
under the Act and such as may be required under
the blue sky laws of any jurisdiction in connec-
tion with the purchase and distribution of the
Securities by the Underwriters, as to which such
Selling Stockholder has made no investigation, and
such other approvals as have been obtained.
11
(vi) Neither the sale of the Securities being
sold by such Selling Stockholder nor the consumma-
tion of any other of the transactions herein con-
templated by such Selling Stockholder or the ful-
fillment of the terms hereof by such Selling
Stockholder will conflict with, result in a breach
or violation of, or constitute a default under any
law or the charter or by-laws of such Selling
Stockholder or the terms of any indenture or other
agreement or instrument to which such Selling
Stockholder or any of its subsidiaries is a party
or bound, or any judgement, order or decree
applicable to such Selling Stockholder or any of
its subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbi-
trator having jurisdiction over such Selling
Stockholder or any of its subsidiaries.
In respect of any statements in or omissions from
the Registration Statement or the Prospectus or any supple-
ments thereto made in reliance upon and in conformity with
information furnished in writing to the Company by any
Selling Stockholder specifically for use in connection with
the preparation thereof and set forth under the caption
"Selling Stockholders", such Selling Stockholder hereby
makes the same representations and warranties to each Under-
writer as the Company makes to such Underwriter under para-
graph (a)(ii) of this Section.
2. Purchase and Sale. (a) Subject to the terms
and conditions and in reliance upon the representations and
warranties herein set forth, the Company and the Selling
Stockholders agree, severally and not jointly, to sell to
each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Company and the Selling
Stockholders, at a purchase price of $ per share, the
Company's or such Selling Stockholder's pro rata portion of
the amount of the Underwritten Securities set forth opposite
such Underwriter's name in Schedule I hereto.
(b) Subject to the terms and conditions and in
reliance upon the representations and warranties herein
set forth, the Company hereby grants an option to the
several Underwriters to purchase, severally and not
jointly, up to shares of the Option Securities
at the same purchase price per share as the Under-
writers shall pay for the Underwritten Securities.
Said option may be exercised only to cover over-
12
allotments in the sale of the Underwritten Securities
by the Underwriters. Said option may be exercised in
whole or in part at any time and from time to time on
or before the 30th day after the date of the Prospectus
upon written, facsimile transmission or telegraphic
notice by the Representatives to the Company setting
forth the number of shares of the Option Securities as
to which the several Underwriters are exercising the
option and the settlement date. Delivery of
certificates for the shares of Option Securities by the
Company, and payment therefor by the several Under-
writers to the Company, shall be made as provided in
Section 3 hereof. The number of shares of the Option
Securities to be purchased by each Underwriter shall be
the same percentage of the total number of shares of
the Option Securities to be purchased by the several
Underwriters as such Underwriter is purchasing of the
Underwritten Securities, subject to such adjustments as
you in your absolute discretion shall make to eliminate
any fractional shares.
3. Delivery and Payment. Delivery of and payment
for the Underwritten Securities and the Option Securities
(if the option provided for in Section 2(b) hereof shall
have been exercised on or before the second business day
prior to the Closing Date) shall be made at 10:00 a.m.,
New York City time, on , 1996, or such later date
(not later than , 1996) as the Representatives
shall designate, which date and time may be postponed by
agreement among the Representatives, the Company and the
Selling Stockholders or as provided in Section 9 hereof
(such date and time of delivery and payment for the Securi-
ties being herein called the "Closing Date"). Delivery of
the Securities shall be made to the Representatives for the
respective accounts of the several Underwriters against
payment therefor by the several Underwriters through the
Representatives of the respective aggregate purchase prices
of the Securities being sold by the Company and each of the
Selling Stockholders in immediately available funds to or
upon the order of the Company and the Selling Stockholders.
Delivery of the Underwritten Securities and the Option
Securities shall be made at such location as the
Representatives shall reasonably designate at least one
business day in advance of the Closing Date and payment for
such Securities shall be made at the office of Cravath,
Swaine & Moore, Worldwide Plaza, 825 Eighth Avenue,
New York, New York. Certificates for the Securities shall
be registered in such names and in such denominations as the
13
Representatives may request not less than three full busi-
ness days in advance of the Closing Date.
The Company and the Selling Stockholders agree to
have the Securities available for inspection, checking and
packaging by the Representatives in New York, New York, not
later than 1:00 p.m. on the business day prior to the
Closing Date.
Each Selling Stockholder will pay all applicable
state transfer taxes, if any, involved in the transfer to
the several Underwriters of the Securities to be purchased
by them from such Selling Stockholder and the respective
Underwriters will pay any additional stock transfer taxes
involved in further transfers.
If the option provided for in Section 2(b) hereof
is exercised after the second business day prior to the
Closing Date, the Company will deliver (at the expense of
the Company) to the Representatives, at Park Avenue Plaza,
55 East 52nd Street, New York, New York, on the date
specified by the Representatives (which shall be within
three business days after exercise of said option), certifi-
cates for the Option Securities in such names and denomina-
tions as the Representatives shall have requested against
payment by the Underwriters of the purchase price thereof in
immediately available funds to or upon the order of the
Company. If settlement for the Option Securities occurs
after the Closing Date, the Company will deliver to the
Representatives on the settlement date for the Option
Securities, and the obligation of the Underwriters to
purchase the Option Securities shall be conditioned upon
receipt of, supplemental opinions, certificates and letters
confirming as of such date the opinions, certificates and
letters delivered on the Closing Date pursuant to Section 6
hereof.
4. Offering by Underwriters. It is understood
that the several Underwriters propose to offer the Securi-
ties for sale to the public as set forth under the caption
"Underwriting" in the Prospectus.
14
5. Agreements.
(a) The Company agrees with the several Under-
writers that:
(i) The Company will use its best efforts to
cause the Registration Statement, if not effective
at the Execution Time, and any amendment thereof
to become effective. Prior to the termination of
the offering of the Securities, the Company will
not file any amendment of the Registration State-
ment, any supplement to the Prospectus or any
Rule 462(b) Registration Statement without your
prior consent. Subject to the foregoing sentence,
if the Registration Statement has become or
becomes effective pursuant to Rule 430A, or filing
of the Prospectus is otherwise required under
Rule 424(b), the Company will cause the Prospec-
tus, properly completed, and any supplement
thereto to be filed with the Commission pursuant
to the applicable paragraph of Rule 424(b) within
the time period prescribed by such Rule and will
provide evidence satisfactory to the Representa-
tives of such timely filing. Upon your request,
the Company will cause the Rule 462(b) Registra-
tion Statement, properly completed, to be filed
with the Commission pursuant to Rule 462(b) and
will provide evidence satisfactory to the Repre-
sentatives of such filing. The Company will
promptly advise the Representatives (A) when the
Registration Statement, if not effective at the
Execution Time, and any amendment thereto, shall
have become effective, (B) when the Prospectus,
and any supplement thereto, shall have been filed
(if required) with the Commission pursuant to
Rule 424(b), (C) when, prior to termination of the
offering of the Securities, any amendment to the
Registration Statement shall have been filed or
become effective, (D) of any request by the
Commission for any amendment of the Registration
Statement or supplement to the Prospectus or for
any additional information, (E) of the issuance by
the Commission of any stop order suspending the
effectiveness of the Registration Statement or the
institution or threatening of any proceeding for
that purpose and (F) of the receipt by the Company
of any notification with respect to the suspension
of the qualification of the Securities for sale in
15
any jurisdiction or the initiation or threatening
of any proceeding for such purpose. The Company
will use its best efforts to prevent the issuance
of any such stop order and, if issued, to obtain
as soon as possible the withdrawal thereof.
(ii) If, at any time when a prospectus relat-
ing to the Securities is required to be delivered
under the Act, any event occurs as a result of
which the Prospectus as then supplemented would
include any untrue statement of a material fact or
omit to state any material fact necessary to make
the statements therein in the light of the circum-
stances under which they were made not misleading,
or if it shall be necessary to amend the Registra-
tion Statement or supplement the Prospectus to
comply with the Act or the rules thereunder, the
Company promptly will (A) prepare and file with
the Commission, subject to the second sentence of
paragraph (a)(i) of this Section 5, an amendment
or supplement which will correct such statement or
omission or effect such compliance and (B) supply
any supplemented Prospectus to you in such quanti-
ties as you may reasonably request. Neither CS
First Boston Corporation's consent to, nor the
Underwriters' delivery of, any such amendment or
supplement shall constitute a waiver of any of the
conditions set forth in Section 6.
(iii) As soon practicable, the Company will
make generally available to its security holders
and to the Representatives an earnings statement
or statements of the Company and its subsidiaries
which will satisfy the provisions of Section 11(a)
of the Act and Rule 158 under the Act.
(iv) The Company will furnish to the Repre-
sentatives and counsel for the Underwriters, with-
out charge, signed copies of the Registration
Statement (including exhibits thereto) and to each
other Underwriter a copy of the Registration
Statement (without exhibits thereto) and, so long
as delivery of a prospectus by an Underwriter or
dealer may be required by the Act, as many copies
of each Preliminary Prospectus and the Prospectus
and any supplement thereto as the Representatives
may reasonably request. The Company will pay the
16
expenses of printing or other production of all
documents relating to the offering.
(v) The Company will arrange for the quali-
fication of the Securities for sale under the laws
of such jurisdictions as the Representatives may
designate, will maintain such qualifications in
effect so long as required for the distribution of
the Securities and will pay the fee of the
National Association of Securities Dealers, Inc.,
in connection with its review of the offering.
(vi) For a period of 120 days after the date
of the initial public offering of the Securities
(the "Lock-up Period"), the Company will not
offer, sell, contract to sell, pledge or otherwise
dispose of, directly or indirectly, or file with
the Commission a registration statement under the
Act relating to (other than a registration
statement to be filed by the Company with respect
to approximately 1.3 million shares of Common
Stock pursuant to the Company's acquisition on
May 31, 1996 of McCall Enterprises, Inc. and its
affiliated companies), any additional shares of
its Securities or securities convertible into, or
exchangeable or exercisable for, any shares of its
Securities, or publicly disclose the intention to
make any such offer, sale, pledge, disposal or
filing, without the prior written consent of
CS First Boston Corporation; provided, however,
that (I) the Company may issue and sell Common
Stock pursuant to any employee stock option plan,
stock ownership plan or dividend reinvestment plan
of the Company in effect at the Execution Time,
(II) the Company may issue Common Stock issuable
upon the conversion of securities or the exercise
of warrants outstanding at the Execution Time and
(III) the Company may issue shares of Common Stock
during the Lock-up Period as consideration to any
seller of assets or stock that the Company or any
of its subsidiaries is acquiring, provided that
the holder of such shares of Common Stock
contemporaneously with such issuance enters into
an agreement with the Representatives in
substantially the same form as the agreement
described in this paragraph (vi) for the remainder
of the Lock-up Period.
17
(vii) The Company confirms as of the date
hereof that it is in compliance with all provi-
sions of Section 1 of Laws of Florida,
Chapter 92-198, An Act Relating to Disclosure of
Doing Business with Cuba, and the Company further
agrees that if it commences engaging in business
with the government of Cuba or with any person or
affiliate located in Cuba after the date the
Registration Statement becomes or has become
effective with the Commission or with the Florida
Department of Banking and Finance (the
"Department"), whichever date is later, or if the
information reported in the Prospectus, if any,
concerning the Company's business with Cuba or
with any person or affiliate located in Cuba
changes in any material way, the Company will
provide the Department notice of such business or
change, as appropriate, in a form acceptable to
the Department.
(b) Each Selling Stockholder agrees, for a period
of 120 days after the date of the initial public
offering of the Securities, not to offer, sell,
contract to sell, pledge or otherwise dispose of,
directly or indirectly, any additional shares of Common
Stock (other than shares of Common Stock disposed of as
bona fide gifts) or securities convertible into, or
exchangeable or exercisable for, any shares of Common
Stock, or publicly disclose the intention to make any
such offer, sale, pledge or disposal, without the prior
written consent of CS First Boston Corporation.
6. Conditions to the Obligations of the Under-
writers. The obligations of the Underwriters to purchase
the Underwritten Securities and the Option Securities, as
the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company
and the Selling Stockholders contained herein as of the
Execution Time, the Closing Date and any settlement date
pursuant to Section 3 hereof, to the accuracy of the state-
ments of the Company and the Selling Stockholders made in
any certificates pursuant to the provisions hereof, to the
performance by the Company and the Selling Stockholders of
their respective obligations hereunder and to the following
additional conditions:
(a) If the Registration Statement has not become
effective prior to the Execution Time, unless the
18
Representatives agree in writing to a later time, the
Registration Statement will become effective not later
than (i) 10:00 p.m. New York City time on the date of
determination of the public offering price, if such
determination occurred at or prior to 3:00 p.m. New
York City time on such date or (ii) 12:00 Noon on the
business day following the day on which the public
offering price was determined, if such determination
occurred after 3:00 p.m. New York City time on such
date; if filing of the Prospectus, or any supplement
thereto, is required pursuant to Rule 424(b), the
Prospectus, and any such supplement, will be filed in
the manner and within the time period required by
Rule 424(b); and no stop order suspending the effec-
tiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have
been instituted or threatened.
(b) The Company shall have furnished to the
Representatives the opinion of Weil, Gotshal & Manges,
counsel for the Company, dated the Closing Date, to the
effect that:
(i) each of the Company and SEACOR Marine
Inc., Acadian Supply Ships Inc., SEACOR Offshore,
Inc., SEACOR Marine International Inc., SEACOR
Ocean Boats, Inc., VEESEA Holdings Inc., GEM
Shipping Inc., STORM Shipping Inc., SEACOR
Management Services Inc., CRN Holdings Inc.,
SEACOR Worldwide Inc., OSRV Holdings, Inc.,
National Response Corporation, National Response
Corporation of Puerto Rico, NRC Services, Inc.,
International Response Corporation, GRAHAM Boats
Inc., GRAHAM Offshore Inc. and GRAHAM Marine Inc.
(each a "Delaware Subsidiary" and collectively the
"Delaware Subsidiaries") has been duly incorpo-
rated and is validly existing as a corporation in
good standing under the laws of the State of
Delaware, with full corporate power and authority
to own its properties and conduct its business as
described in the Prospectus, and is duly qualified
to do business as a foreign corporation and is in
good standing under the laws of each jurisdiction
which requires such qualification wherein it owns
or leases material properties or conducts material
business;
19
(ii) all the outstanding shares of capital
stock of each Delaware Subsidiary have been duly
and validly authorized and issued and are fully
paid and nonassessable, and, except as otherwise
set forth in the Prospectus, all outstanding
shares of capital stock of the Delaware Subsidi-
aries are owned by the Company either directly or
through wholly owned subsidiaries free and clear
of any perfected security interest and, to the
knowledge of such counsel, after due inquiry, any
other security interests, claims, liens or encum-
brances;
(iii) the Company's authorized equity capital-
ization is as set forth in the Prospectus; the
capital stock of the Company conforms to the
description thereof incorporated by reference in
the Prospectus; the outstanding shares of Common
Stock (including the Securities being sold here-
under by the Selling Stockholders) have been duly
and validly authorized and issued and are fully
paid and nonassessable; the Securities being sold
hereunder by the Company have been duly and
validly authorized, and, when issued and delivered
to and paid for by the Underwriters pursuant to
this Agreement, will be fully paid and non-
assessable; the Securities being sold by the
Selling Stockholders are duly listed and admitted
for trading on the Nasdaq National Market; the
Securities being sold hereunder by the Company are
duly authorized for listing, subject to official
notice of issuance, on the Nasdaq National Market;
the certificates for the Securities are in valid
and sufficient form; and the holders of outstand-
ing shares of capital stock of the Company are not
entitled to preemptive or other rights to sub-
scribe for the Securities;
(iv) to the best knowledge of such counsel,
there is no pending or threatened action, suit or
proceeding before any court or governmental
agency, authority or body or any arbitrator
involving the Company or any of its subsidiaries
of a character required to be disclosed in the
Registration Statement which is not adequately
disclosed in the Prospectus, and there is no fran-
chise, contract or other document of a character
required to be described in the Registration
20
Statement or Prospectus, or to be filed as an
exhibit, which is not described or filed as
required;
(v) the Registration Statement has become
effective under the Act; any required filing of
the Prospectus, and any supplements thereto,
pursuant to Rule 424(b) has been made in the
manner and within the time period required by
Rule 424(b); to the best knowledge of such
counsel, no stop order suspending the effective-
ness of the Registration Statement has been
issued, no proceedings for that purpose have been
instituted or threatened;
(vi) this Agreement has been duly authorized,
executed and delivered by the Company;
(vii) no consent, approval, authorization or
order of any court or governmental agency or body
is required for the consummation of the transac-
tions contemplated herein, except such as have
been obtained under the Act and such as may be
required under the blue sky laws of any jurisdic-
tion (and maritime, admiralty and related laws,
rules and regulations, as to which such counsel
need express no opinion) in connection with the
purchase and distribution of the Securities by the
Underwriters and such other approvals (specified
in such opinion) as have been obtained;
(viii) neither the issue and sale of the Securi-
ties, nor the consummation of any other of the
transactions herein contemplated nor the fulfill-
ment of the terms hereof will conflict with,
result in a breach or violation of, or constitute
a default under any law (other than maritime,
admiralty and related laws, rules and regulations,
as to which such counsel need express no opinion)
or the charter or by-laws of the Company or the
terms of any indenture or other agreement or
instrument known to such counsel and to which the
Company or any of its subsidiaries is a party or
bound or any judgment, order or decree known to
such counsel to be applicable to the Company or
any of its subsidiaries of any court, regulatory
body, administrative agency, governmental body or
arbitrator having jurisdiction over the Company or
21
any of its subsidiaries (other than public or
governmental authorities having jurisdiction over
maritime, admiralty or related matters or who
enforce or interpret maritime or admiralty laws or
promulgate any regulations as to such matters);
(ix) except as disclosed in the Registration
Statement, no holders of securities of the Company
have rights to the registration of such securities
under the Registration Statement; and
(x) the statements in the Prospectus under
the captions "Risk Factors--Government Regulation"
and "Business--Government Regulation" fairly
present and summarize the laws and regulations
referred to therein.
In rendering such opinion, such counsel may
rely (A) as to matters involving the application of
laws of any jurisdiction other than the State of New
York or the United States or the corporation law of the
State of Delaware, to the extent they deem proper and
specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reli-
able and who are satisfactory to counsel for the Under-
writers and (B) as to matters of fact, to the extent
they deem proper, on certificates of responsible
officers of the Company and public officials. Refer-
ences to the Prospectus in this paragraph (b) include
any supplements thereto at the Closing Date.
In addition to the foregoing, such counsel
shall provide a statement confirming to you that, in
the opinion of such counsel, the Registration Statement
and the Prospectus and any further amendments and
supplements thereto made by the Company prior to the
Closing Date (other than the financial statements and
related schedules therein, as to which such counsel
need express no view), and the documents incorporated
by reference in the Prospectus, when they became
effective or were filed with the Commission, as the
case may be (other than the financial statements and
related schedules therein, as to which such counsel
need express no view), appeared on their face to be
appropriately responsive in all material respects to
the requirements of the Act and the rules and regula-
tions thereunder; and such counsel shall provide a
statement to you to the effect that, although such
22
counsel does not assume any responsibility for the
accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospec-
tus, such counsel's work in connection with this matter
did not disclose any information that gave him reason
to believe that, as of its effective date, the Regis-
tration Statement or any further amendment thereto made
by the Company prior to the Closing Date (other than,
in each case, the financial statements and related
statements and related schedules therein, as to which
such counsel need express no view), contained an untrue
statement of a material fact or omitted to state a
material fact required to be stated therein or neces-
sary to make the statement therein not misleading or
that, as of its date, the Prospectus or any further
amendment or supplement thereto made by the Company
prior to the Closing Date (other than the financial
statements and related schedules therein, as to which
such counsel need express no view) contained an untrue
statement of a material fact or omitted to state a
material fact necessary to make the statements therein,
in the light of the circumstances under which they were
made, not misleading or that, as of the Closing Date,
either the Registration Statement or the Prospectus or
any further amendment or supplement thereto made by the
Company prior to such Closing Date (other than the
financial statements and related schedules therein, as
to which such counsel need express no view) contains an
untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein,
in the light of the circumstances under which they were
made, not misleading.
(c) The Company shall have furnished to the
Representatives the opinion of Lugenbuhl, Burke,
Wheaton, Peck, Rankin & Hubbard, Louisiana counsel for
the Company, dated the Closing Date, in form and sub-
stance satisfactory to you, to the effect that each of
Acadian Offshore Services Inc., SEACOR Marine (Nigeria)
Inc., SEACOR Supply Ships Associates Inc., SEACOR Ocean
Lines Inc., Arthur Levy Enterprises Inc., SEACOR Marine
(Mexico) Inc., SEACOR Ocean Support Services Inc. and
SEAMAC Offshore LLC (each a "Louisiana Subsidiary" and
collectively the "Louisiana Subsidiaries") has been
duly organized and is validly existing as a corporation
or limited liability company, as applicable, in good
standing under the laws of the State of Louisiana, with
full corporate power and authority to own its
23
properties and conduct its business as described in the
Prospectus, and is duly qualified to do business as a
foreign corporation and is in good standing under the
laws of each jurisdiction which requires such
qualification wherein it owns or leases material
properties or conducts material business; all the
outstanding shares of capital stock of each Louisiana
Subsidiary have been duly and validly authorized and
issued and are fully paid and nonassessable, and,
except as otherwise set forth in the Prospectus, all
outstanding shares of capital stock of the Louisiana
Subsidiaries are owned by the Company either directly
or through wholly owned subsidiaries free and clear of
any perfected security interest and, to the knowledge
of such counsel, after due inquiry, any other security
interests, claims, liens or encumbrances.
(d) The Company shall have furnished to the
Representatives the opinion of Vickers, Riis, Murray
and Curran, Alabama counsel for the Company, dated the
Closing Date, in form and substance satisfactory to
you, to the effect that Anna Offshore Inc. has been
duly incorporated and is validly existing as a corpora-
tion in good standing under the laws of the state of
Alabama, with full corporate power and authority to own
its properties and conduct its business as described in
the Prospectus, and is duly qualified to do business as
a foreign corporation and is in good standing under the
laws of each jurisdiction which requires such qualifi-
cation wherein it owns or leases material properties or
conducts material business; all the outstanding shares
of capital stock of Anna Offshore Inc. have been duly
and validly authorized and issued and are fully paid
and nonassessable, and except as otherwise set forth in
the Prospectus, all outstanding shares of capital stock
of Anna Offshore Inc. are owned by the Company either
directly or through wholly owned subsidiaries free and
clear of any perfected security interest and, to the
knowledge of such counsel, after due inquiry, any other
security interests, claims, liens or encumbrances.
(e) The Company shall have furnished to the
Representatives the opinion of Fort & Schlefer, special
regulatory counsel for the Company, dated the Closing
Date, to the effect that:
(i) the issue and sale of the shares of
Common Stock being delivered by the Company and
24
the compliance by the Company with all of the
provisions of this Agreement and the consummation
of the transactions herein contemplated will not
conflict with, or violate or constitute a default
under, (i) any U.S. Federal maritime or admiralty
law or regulation, or (ii) any judgment, writ,
injunction, decree or order binding on the Company
or any of its subsidiaries of which such counsel
is aware of any U.S. Federal court or governmental
authority having jurisdiction over any maritime or
admiralty matters or who enforce or interpret any
maritime or admiralty laws or promulgate any regu-
lations as to such matters;
(ii) no consent, approval, waiver, license or
other authorization by or filing with any U.S.
Federal maritime or admiralty governmental author-
ity is required for the issue and sale of the
shares of Common Stock being issued by the Company
or the consummation by the Company of the
transactions contemplated herein;
(iii) immediately prior to the Closing Date,
the Company was a citizen of the United States
within the meaning of Section 2 of the Shipping
Act and was qualified to operate vessels in the
coastwise trade of the United States; immediately
following the issue and sale of the shares of
Common Stock by the Company and the compliance by
the Company and the Underwriters with all of the
provisions of this Agreement (and the consummation
of the transactions herein contemplated and
assuming that at least ___% of the shares are
issued and sold to, and held of record and
beneficially owned by, persons who are citizens of
the United States), the Company will remain a
citizen of the United States within the meaning of
Section 2 of the Shipping Act and will continue to
be qualified to operate vessels in the coastwise
trade of the United States;
(iv) the statements in the Prospectus under
the caption "Risk Factors--Limitation on Foreign
Ownership of Common Stock" fairly present and sum-
marize the maritime laws and regulations referred
to therein and the statements in the Prospectus
under the captions "Business--Offshore
Marine--Government Regulation--Domestic
25
Regulation" and "--Foreign Regulation" fairly
identify the domestic governmental and
international maritime regulation to which the
Company is subject; and
(v) as of September 15, 1995, each of (a) the
vessels listed on Schedule 12 to the Revolving
Credit Facility Agreement dated September 15,
1995, by and between Arthur Levy Enterprises,
Inc., Graham Offshore Inc. and Seacor Offshore
Inc. as borrowers and Den norske Bank AS as lender
(the "DnB Facility") (the "Mortgaged Vessels"),
(b) those vessels listed on Schedule 13 to the DnB
Facility as registered under the laws and flag of
the United States of America (the "Negative Pledge
Vessels") and those vessels listed on Schedule 14
to the DnB Facility as Owned by Graham Boats Inc.,
was documented solely in the name of the
respective majority owned subsidiary of the
Company indicated as owner thereof in such sched-
ules under the laws and flag of the United States
of America, free and clear of all liens and encum-
brances of record except, in the case of the
Mortgaged Vessels, the respective first preferred
fleet mortgage recorded against such Mortgaged
Vessel in favor of Den norske Bank AS as mortgagee
pursuant to the DnB Facility and, in the case of
the Negative Pledge Vessels, the liens and
encumbrances listed on a schedule to such opinion.
In rendering such opinion, such counsel may rely
(A) as to matters involving the application of laws of any
jurisdiction other than the District of Columbia or the
United States, to the extent they deem proper and specified
in such opinion, upon the opinion of other counsel of good
standing whom they believe to be reliable and who are satis-
factory to counsel for the Underwriters and (B) as to
matters of fact, to the extent they deem proper, on certifi-
cates of responsible officers of the Company and public
officials. References to the Prospectus in this para-
graph (e) include any supplements thereto at the Closing
Date.
(f) Each of the Selling Stockholders shall have
furnished to the Representatives the opinion of counsel
26
for such Selling Stockholder, dated the Closing Date,
to the effect that:
(i) this Agreement and the Power of Attorney
and Custody Agreement have been duly authorized,
executed and delivered by such Selling Stock-
holder, the Custody Agreement is valid and binding
on such Selling Stockholder and such Selling
Stockholder has full legal right and authority to
sell, transfer and deliver in the manner provided
in this Agreement and the Custody Agreement the
Securities being sold by such Selling Stockholder
hereunder;
(ii) the delivery by such Selling Stockholder
to the several Underwriters of certificates for
the Securities being sold hereunder by such
Selling Stockholder against payment by the Under-
writers therefor as provided herein, will pass
good and marketable title to such Securities to
the several Underwriters, free and clear of all
adverse claims whatsoever, assuming that the
several Underwriters purchase such Securities in
good faith without notice of any adverse claim, as
such term is used in Section 8-302(2) of the
Uniform Commercial Code as in effect in the State
of New York;
(iii) no consent, approval, authorization or
order of any court or governmental agency or body
is required for the consummation by any Selling
Stockholder of the transactions contemplated
herein, except such as may be required under the
Act and the rules and regulations thereunder and
such as may be required under the blue sky laws of
any jurisdiction in connection with the purchase
and distribution of the Securities by the Under-
writers (as to which such counsel need express no
opinion) and such other approvals (specified in
such opinion) as have been obtained; and
(iv) neither the sale of the Securities being
sold by such Selling Stockholder nor the consumma-
tion of any other of the transactions herein
contemplated by such Selling Stockholder or the
fulfillment of the terms hereof by such Selling
Stockholder will conflict with, result in a breach
or violation of, or constitute a default under any
27
applicable law or the charter or By-laws (or
equivalent organizational document) of the Selling
Stockholder or the terms of any indenture or other
agreement or instrument known to such counsel and
to which such Selling Stockholder or any of its
subsidiaries is a party or bound, or any judge-
ment, order or decree known to such counsel to be
applicable to such Selling Stockholder or any of
its subsidiaries of any court, regulatory body,
administrative agency, governmental body or
arbitrator having jurisdiction over such Selling
Stockholder or any of its subsidiaries (except
that such counsel need not express any opinion as
to the Act and the rules and regulations
thereunder, the anti-fraud provisions of any
federal securities law of the United States or the
securities or Blue Sky laws of the various states
of the United States).
In rendering such opinion, such counsel need not
opine as to the application of laws other than those of the
United States or the States of New York, New Jersey or
Delaware, but if such counsel does so opine, counsel may
rely (A) as to matters involving the application of laws of
any jurisdiction other than the States of New York,
New Jersey or Delaware or the United States, to the extent
they deem proper and specified in such opinion, upon the
opinion of other counsel of good standing whom they believe
to be reliable and who are satisfactory to counsel for the
Underwriters, and (B) as to matters of fact, to the extent
they deem proper, on certificates of the Selling Stock-
holders or responsible officers thereof, as applicable, and
public officials.
(g) The Representatives shall have received from
Cravath, Swaine & Moore, counsel for the Underwriters,
such opinion or opinions, dated the Closing Date, with
respect to the issuance and sale of the Securities, the
Registration Statement, the Prospectus (together with
any supplement thereto) and other related matters as
the Representatives may reasonably require, and the
Company and each Selling Stockholder shall have fur-
nished to such counsel such documents as they request
for the purpose of enabling them to pass upon such
matters.
(h) The Company shall have furnished to the
Representatives a certificate of the Company, signed by
28
the Chairman of the Board or the President and the
principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that the
signers of such certificate have carefully examined the
Registration Statement, the Prospectus, any supplements
to the Prospectus and this Agreement and that:
(i) the representations and warranties of the
Company in this Agreement are true and correct in
all material respects on and as of the Closing
Date with the same effect as if made on the
Closing Date and the Company has complied with all
the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior
to the Closing Date;
(ii) no stop order suspending the effective-
ness of the Registration Statement has been issued
and no proceedings for that purpose have been
instituted or, to the Company's knowledge, threat-
ened; and
(iii) since the date of the most recent finan-
cial statements included in the Prospectus
(exclusive of any supplement thereto), there has
been no material adverse change in the condition
(financial or other), earnings, business or prop-
erties of the Company and its subsidiaries,
whether or not arising from transactions in the
ordinary course of business, except as set forth
in or contemplated in the Prospectus (exclusive of
any supplement thereto).
(i) Each of the Selling Stockholders shall have
furnished to the Representatives a certificate, signed
by such Selling Stockholder, or by the Chairman of the
Board or the President and the principal financial or
accounting officer of such Selling Stockholder, or by
an authorized officer of such Selling Stockholder, as
applicable, dated the Closing Date, to the effect that
the representations and warranties of such Selling
Stockholder in this Agreement are true and correct in
all material respects on and as of the Closing Date to
the same effect as if made on the Closing Date.
(j) At the Execution Time and at the Closing
Date, Arthur Andersen LLP shall have furnished to the
Representatives a letter or letters, dated respectively
29
as of the Execution Time and as of the Closing Date, in
form and substance satisfactory to the Representatives,
confirming that they are independent accountants within
the meaning of the Act and the applicable published
rules and regulations thereunder and stating in effect
that:
(i) in their opinion the audited financial
statements and financial statement schedules and
pro forma financial statements included or incor-
porated in the Registration Statement and the
Prospectus and reported on by them comply in form
in all material respects with the applicable
accounting requirements of the Act and the
Exchange Act and the related published rules and
regulations;
(ii) on the basis of a reading of the latest
unaudited financial statements made available by
the Company and its subsidiaries; their limited
review in accordance with standards established by
the American Institute of Certified Public
Accountants of the unaudited interim financial
information for the three-month period ended
March 31, 1996, and as at March 31, 1996, as
indicated in their report dated May 9, 1996;
carrying out certain specified procedures (but not
an examination in accordance with generally
accepted auditing standards) which would not
necessarily reveal matters of significance with
respect to the comments set forth in such letter;
a reading of the minutes of the meetings of the
stockholders, directors and committees of the
Company and its subsidiaries; and inquiries of
certain officials of the Company who have
responsibility for financial and accounting
matters of the Company and its subsidiaries as to
transactions and events subsequent to December 31,
1995, nothing came to their attention which caused
them to believe that:
(1) any unaudited financial statements
included in the Registration Statement and
the Prospectus do not comply in form in all
material respects with applicable accounting
requirements and with the published rules and
regulations of the Commission with respect to
financial statements included or incorporated
30
in quarterly reports on Form 10-Q under the
Exchange Act; and said unaudited financial
statements are not in conformity with gener-
ally accepted accounting principles applied
on a basis substantially consistent with that
of the audited financial statements included
in the Registration Statement and the Pros-
pectus;
(2) with respect to the period subse-
quent to March 31, 1996, there were any
changes, at a specified date not more than
five business days prior to the date of the
letter, in the long-term debt of the Company
and its subsidiaries or capital stock of the
Company or decreases in the stockholders'
equity of the Company or decreases in working
capital of the Company and its subsidiaries
as compared with the amounts shown on the
March 31, 1996 consolidated balance sheet
included in the Registration Statement and
the Prospectus, or for the period from
April 1, 1996, to such specified date there
were any decreases, as compared with the
corresponding period in the preceding year in
operating income, net revenues or income
before income taxes or in total or per share
amounts of net income of the Company and its
subsidiaries, except in all instances for
changes or decreases set forth in such
letter, in which case the letter shall be
accompanied by an explanation by the Company
as to the significance thereof unless said
explanation is not deemed necessary by the
Representatives;
(3) the information included or incorpo-
rated by reference in the Registration State-
ment and the Prospectus in response to Regu-
lation S-K, Item 301 (Selected Financial
Data), Item 302 (Supplementary Financial
Information), Item 402 (Executive Compensa-
tion) and Item 503(d) (Ratio of Earnings to
Fixed Charges) is not in conformity with the
applicable disclosure requirements of Regula-
tion S-K;
31
(iii) they have performed certain other speci-
fied procedures as a result of which they deter-
mined that certain information of an accounting,
financial or statistical nature (which is limited
to accounting, financial or statistical informa-
tion derived from the general accounting records
of the Company and its subsidiaries) set forth in
the Registration Statement and the Prospectus,
including the information set forth under the
captions "Prospectus Summary", "Selected Histori-
cal Financial Data", "Risk Factors", "Use of
Proceeds", "Capitalization", "Management's Dis-
cussion and Analysis of Financial Condition and
Results of Operations" and "Pro Forma Financial
Statements" in the Prospectus, and certain speci-
fied information incorporated by reference in the
Registration Statement and the Prospectus agrees
with the accounting records of the Company and its
subsidiaries, excluding any questions of legal
interpretation; and
(iv) on the basis of a reading of the unau-
dited pro forma financial statements included in
the Registration Statement and the Prospectus (the
"pro forma financial statements"); carrying out
certain specified procedures; inquiries of certain
officials of the Company who have responsibility
for financial and accounting matters; and proving
the arithmetic accuracy of the application of the
pro forma adjustments to the historical amounts in
the pro forma financial statements, nothing came
to their attention which caused them to believe
that the pro forma financial statements do not
comply in form in all material respects with the
applicable accounting requirements of Rule 11-02
of Regulation S-X.
References to the Prospectus in this paragraph (j)
include any supplement thereto at the date of the letter.
The Representatives shall have also received from
Arthur Andersen LLP a letter stating that the Company's
system of internal accounting controls taken as a whole is
sufficient to meet the broad objectives of internal account-
ing control insofar as those objectives pertain to the pre-
vention or detection of errors or irregularities in amounts
that would be material in relation to the financial state-
ments of the Company and its subsidiaries.
32
(k) Subsequent to the Execution Time or, if
earlier, the dates as of which information is given in
the Registration Statement (exclusive of any amendment
thereof) and the Prospectus (exclusive of any supple-
ment thereto), there shall not have been (i) any change
or decrease specified in the letter or letters referred
to in paragraph (i) of this Section 6 or (ii) any
change, or any development involving a prospective
change, in or affecting the business or properties of
the Company and its subsidiaries the effect of which,
in any case referred to in clause (i) or (ii) above,
is, in the judgment of the Representatives, so material
and adverse as to make it impractical or inadvisable to
proceed with the offering or delivery of the Securities
as contemplated by the Registration Statement (exclu-
sive of any amendment thereof) and the Prospectus
(exclusive of any supplement thereto).
(l) At the Execution Time, the Company shall have
furnished to the Representatives a letter substantially
in the form of Exhibit A hereto from each officer and
director of the Company, from each Selling Shareholder
and from certain major shareholders to be named by the
Representatives addressed to the Representatives, in
which each such person agrees, for a period of 120 days
after the date of the initial public offering of the
Securities, not to offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly,
any shares of Common Stock (other than the Securities
or shares of Common Stock disposed of as bona fide
gifts) or securities convertible into, or exchangeable
or exercisable for, any shares of Common Stock, or
publicly disclose the intention to make any such offer,
sale, pledge or disposal, without the prior written
consent of CS First Boston Corporation.
(m) Subsequent to the Execution Time, there shall
not have been (i) any decrease in the rating of any of
the Company's debt securities by any "nationally
recognized statistical rating organization" (as defined
for purposes of Rule 436(g) under the Act) or any
notice given of any intended or potential decrease in
any such rating or of a possible change in any such
rating that does not indicate the direction of the
possible change, (ii) any suspension of trading in the
Company's Common Stock by the Commission or the
National Association of Securities Dealers Automated
Quotation National Market System or any suspension or
33
limitation of trading in securities generally on the
New York Stock Exchange or the National Association of
Securities Dealers Automated Quotation National Market
System or any establishment of minimum prices on either
of such Exchange or Market System, (iii) any
declaration of a banking moratorium either by Federal
or New York State authorities or (iv) any outbreak or
escalation of hostilities, declaration by the United
States of a national emergency or war or other calamity
or crisis the effect of which on financial markets is
such as to make it, in the judgment of the
Representatives, impracticable or inadvisable to
proceed with the offering or delivery of the Securities
as contemplated by the Prospectus (exclusive of any
supplement thereto).
(n) Prior to the Closing Date, the Company and
Selling Stockholders shall have furnished to the Repre-
sentatives such further information, certificates and
documents as the Representatives may reasonably
request.
If any of the conditions specified in this
Section 6 shall not have been fulfilled in all material
respects when and as provided in this Agreement, or if any
of the opinions and certificates mentioned above or else-
where in this Agreement shall not be in all material
respects reasonably satisfactory in form and substance to
the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder
may be canceled at, or at any time prior to, the Closing
Date by the Representatives. Notice of such cancellation
shall be given to the Company and each Selling Stockholder
in writing or by telephone or telegraph confirmed in writ-
ing.
The documents required to be delivered by this
Section 6 shall be delivered at the office of Cravath,
Swaine & Moore, counsel for the Underwriters, at Worldwide
Plaza, 825 Eighth Avenue, New York, New York, on the Closing
Date.
7. Reimbursement of Underwriters' Expenses. If
the sale of the Securities provided for herein is not con-
summated because any condition to the obligations of the
Underwriters set forth in Section 6 hereof is not satisfied
or because of any refusal, inability or failure on the part
of the Company or any Selling Stockholder to perform any
34
agreement herein or comply with any provision hereof other
than by reason of a default by any of the Underwriters, the
Company will reimburse the Underwriters severally upon
demand for all out-of-pocket expenses (including reasonable
fees and disbursements of counsel) that shall have been
incurred by them in connection with the proposed purchase
and sale of the Securities. If the Company is required to
make any payments to the Underwriters under this Section 7
because of any Selling Stockholder's refusal, inability or
failure to satisfy any condition to the obligations of the
Underwriters set forth in Section 6, such Selling Stock-
holder shall reimburse the Company on demand for all amounts
so paid.
8. Indemnification and Contribution. (a) The
Company agrees to indemnify and hold harmless each Under-
writer, the directors, officers, employees and agents of
each Underwriter and each person who controls any Underwrit-
er within the meaning of either the Act or the Exchange Act
against any and all losses, claims, damages or liabilities,
joint or several, to which they or any of them may become
subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or other-
wise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a
material fact contained in the registration statement for
the registration of the Securities as originally filed or in
any amendment thereof, or in any Preliminary Prospectus or
the Prospectus, or in any amendment thereof or supplement
thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements
therein not misleading, and agrees to reimburse each such
indemnified party, promptly after the receipt of demand
therefor accompanied by an invoice in reasonable detail, for
any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that
the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises
out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any
Underwriter through the Representatives specifically for
inclusion therein. This indemnity agreement will be in
35
addition to any liability which the Company may otherwise
have.
(b) Each Selling Stockholder severally and not
jointly agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers
who signs the Registration Statement, each Underwriter,
the directors, officers, employees and agents of each
Underwriter and each person who controls the Company or
any Underwriter within the meaning of either the Act or
the Exchange Act and each other Selling Stockholder to
the same extent as the foregoing indemnity from the
Company to each Underwriter, but only with reference to
written information furnished to the Company by or on
behalf of such Selling Stockholder specifically for
inclusion in the documents referred to in the foregoing
indemnity and set forth under the caption "Selling
Stockholders". This indemnity agreement will be in
addition to any liability which any Selling Stockholder
may otherwise have; provided, however, that in no case
shall the liability of any Selling Stockholder under
this Section 8(b) exceed the aggregate public offering
price of the Securities sold by such Selling Stock-
holder to the Underwriters (before deducting expenses)
minus the underwriting discounts or commissions paid
thereon to the Underwriters by such Selling Stock-
holder.
(c) Each Underwriter severally agrees to indem-
nify and hold harmless the Company, each of its
directors, each of its officers who signs the Registra-
tion Statement, and each person who controls the
Company within the meaning of either the Act or the
Exchange Act and each Selling Stockholder, to the same
extent as the foregoing indemnity from the Company to
each Underwriter, but only with reference to written
information relating to such Underwriter furnished to
the Company by or on behalf of such Underwriter through
the Representatives specifically for inclusion in the
documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liabil-
ity which any Underwriter may otherwise have. The
Company and each Selling Stockholder acknowledge that
the statements set forth in the last paragraph of the
cover page and under the heading "Underwriting" in any
Preliminary Prospectus and the Prospectus constitute
the only information furnished in writing by or on
behalf of the several Underwriters for inclusion in any
36
Preliminary Prospectus or the Prospectus, and you, as
the Representatives, confirm that such statements are
correct.
(d) Promptly after receipt by an indemnified
party under this Section 8 of notice of the commence-
ment of any action, such indemnified party will, if a
claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the
indemnifying party in writing of the commencement
thereof; but the failure so to notify the indemnifying
party (i) will not relieve it from liability under
paragraph (a), (b) or (c) above unless and to the
extent it did not otherwise learn of such action and
such failure results in the forfeiture by the indemni-
fying party of substantial rights and defenses and
(ii) will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party
other than the indemnification obligation provided in
paragraph (a), (b) or (c) above. The indemnifying
party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's
expense to represent the indemnified party in any
action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be
responsible for the fees and expenses of any separate
counsel retained by the indemnified party or parties
except as set forth below); provided, however, that
such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying
party's election to appoint counsel to represent the
indemnified party in an action, the indemnified party
shall have the right to employ separate counsel
(including local counsel), and the indemnifying party
shall bear the reasonable fees, costs and expenses of
one firm of such separate counsel plus one firm of
counsel in each local jurisdiction where the employment
of separate local counsel is necessary or material to
the defense of an action by the indemnified party if
(i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such
counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action
include both the indemnified party and the indemnifying
party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to
it and/or other indemnified parties which are different
from or additional to those available to the indemnify-
37
ing party, (iii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party
to represent the indemnified party within a reasonable
time after notice of the institution of such action or
(iv) the indemnifying party shall authorize the indem-
nified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemni-
fied parties, settle or compromise or consent to the
entry of any judgment with respect to any pending or
threatened claim, action, suit or proceeding in respect
of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes
an unconditional release of each indemnified party from
all liability arising out of such claim, action, suit
or proceeding.
(e) In the event that the indemnity provided in
paragraph (a), (b) or (c) of this Section 8 is unavail-
able to or insufficient to hold harmless an indemnified
party for any reason, the Company, the Selling Stock-
holders and the Underwriters agree to contribute to the
aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred
in connection with investigating or defending same)
(collectively "Losses") to which the Company, one or
more of the Selling Stockholders and one or more of the
Underwriters may be subject in such proportion as is
appropriate to reflect the relative benefits received
by the Company, by the Selling Stockholders and by the
Underwriters, respectively, from the offering of the
Securities; provided, however, that in no case shall
any Underwriter (except as may be provided in any
agreement among underwriters relating to the offering
of the Securities) be responsible for any amount in
excess of the underwriting discount or commission
applicable to the Securities purchased by such Under-
writer hereunder; and provided, further, that in no
case shall the liability of any Selling Stockholder
under this Section 8(b) exceed the aggregate public
offering price of the Securities sold by such Selling
Stockholder to the Underwriters (before deducting
expenses) minus the underwriting discounts or commis-
sions paid thereon to the Underwriters by such Selling
Stockholder. If the allocation provided by the immedi-
ately preceding sentence is unavailable for any reason,
38
the Company, the Selling Stockholders and the Under-
writers shall contribute in such proportion as is
appropriate to reflect not only such relative benefits
but also the relative fault of the Company, of the
Selling Stockholders and of the Underwriters, respec-
tively, in connection with the statements or omissions
which resulted in such Losses as well as any other
relevant equitable considerations. For the purpose of
this subparagraph 8(e), benefits received by the
Company and by the Selling Stockholders shall be deemed
to be equal to the total net proceeds from the offering
(before deducting expenses) received by each of them,
and benefits received by the Underwriters shall be
deemed to be equal to the total underwriting discounts
and commissions, in each case as set forth on the cover
page of the Prospectus. Relative fault shall be deter-
mined by reference to whether any alleged untrue state-
ment or omission relates to information provided by the
Company, the Selling Stockholders or the Underwriters.
The Company, the Selling Stockholders and the Under-
writers agree that it would not be just and equitable
if contribution were determined by pro rata allocation
or any other method of allocation which does not take
account of the equitable considerations referred to
above. Notwithstanding the provisions of this
paragraph (e), no person guilty of fraudulent mis-
representation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepre-
sentation. For purposes of this Section 8, each person
who controls an Underwriter within the meaning of
either the Act or the Exchange Act and each director,
officer, employee and agent of an Underwriter shall
have the same rights to contribution as such Under-
writer, and each person who controls the Company within
the meaning of either the Act or the Exchange Act, each
officer of the Company who shall have signed the
Registration Statement and each director of the Company
shall have the same rights to contribution as the
Company, subject in each case to the applicable terms
and conditions of this paragraph (e).
9. Default by an Underwriter. If any one or more
Underwriters shall fail to purchase and pay for any of the
Securities agreed to be purchased by such Underwriter or
Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their
obligations under this Agreement, the remaining Underwriters
39
shall be obligated severally to take up and pay for (in the
respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the
aggregate amount of Securities set forth opposite the names
of all the remaining Underwriters) the Securities which the
defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the
aggregate amount of Securities which the defaulting Under-
writer or Underwriters agreed but failed to purchase shall
exceed 10% of the aggregate amount of Securities set forth
in Schedule I hereto, the remaining Underwriters shall have
the right to purchase all, but shall not be under any obli-
gation to purchase any, of the Securities, and if such non-
defaulting Underwriters do not purchase all the Securities,
this Agreement will terminate without liability to any
nondefaulting Underwriter, the Selling Stockholders or the
Company. In the event of a default by any Underwriter as
set forth in this Section 9, the Closing Date shall be post-
poned for such period, not exceeding seven days, as the
Representatives shall determine in order that the required
changes in the Registration Statement and the Prospectus or
in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any
defaulting Underwriter of its liability, if any, to the
Company, the Selling Stockholders and any nondefaulting
Underwriter for damages occasioned by its default hereunder.
10. Representations and Indemnities to Survive.
The respective agreements, representations, warranties,
indemnities and other statements of the Company or its
officers, of each Selling Stockholder and of the Under-
writers set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investi-
gation made by or on behalf of any Underwriter, any Selling
Stockholder or the Company or any of the officers, directors
or controlling persons referred to in Section 8 hereof, and
will survive delivery of and payment for the Securities.
The provisions of Sections 7 and 8 hereof shall survive the
termination or cancellation of this Agreement.
11. Notices. All communications hereunder will be
in writing and effective only on receipt, and, if sent to
the Representatives, will be mailed, delivered or tele-
graphed and confirmed to them, care of CS First Boston
Corporation, at Park Avenue Plaza, 55 East 52nd Street,
New York, New York, 10055; or, if sent to the Company, will
be mailed, delivered or telegraphed and confirmed to it at
1370 Avenue of the Americas, 25th Floor, New York, New York
40
10019 attention of Randall Blank; or if sent to the Selling
Stockholders, will be mailed, delivered or telegraphed and
confirmed to such Selling Stockholders at the addresses set
forth in Schedule II hereto.
12. Successors. This Agreement will inure to the
benefit of and be binding upon the parties hereto and their
respective successors and the officers and directors and
controlling persons referred to in Section 8 hereof, and no
other person will have any right or obligation hereunder.
13. Representation. The Representatives will act
for the several Underwriters in connection with the
transactions contemplated by this Agreement, and any action
under this Agreement taken by the Representatives jointly or
by CS First Boston Corporation will be binding upon all the
Underwriters. Charles Fabrikant or Stephen Stamas will act
for the Selling Stockholders in connection with such
transactions, and any action under or in respect of this
Agreement taken by Charles Fabrikant or Stephen Stamas will
be binding upon all the Selling Stockholders.
14. Applicable Law. This Agreement will be gov-
erned by and construed in accordance with the laws of the
State of New York.
15. Counterparts. This Agreement may be executed
by any one or more of the parties hereto in any number of
counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together consti-
tute one and the same instrument.
If the foregoing is in accordance with your under-
standing of our agreement, please sign and return to us the
41
enclosed duplicate hereof, whereupon this letter and your
acceptance shall represent a binding agreement among the
Company and the several Underwriters.
Very truly yours,
Seacor Holdings, Inc.
By: .........................
Compagnie Nationale de
Navigation
Coastal Refining & Marketing,
Inc.
Charles Fabrikant
Donald Toenshoff
Alvin Wood
Granville Conway
By: .........................
as Attorney-in-Fact
42
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
CS First Boston Corporation
Salomon Brothers Inc
Wasserstein Perella Securities, Inc.
By: CS First Boston Corporation
By:
............................
Vice President
For themselves and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
EXHIBIT A
Seacor Holdings, Inc.
Public Offering of Common Stock
, 1996
CS First Boston Corporation
Salomon Brothers Inc
Wasserstein Perella Securities, Inc.
As Representatives of the several Underwriters
c/o CS First Boston Corporation
Park Avenue Plaza
55 East 52nd Street
New York, NY 10055
Dear Sirs:
This letter is being delivered to you in
connection with the proposed Underwriting Agreement (the
"Underwriting Agreement"), between Seacor Holdings, Inc., a
Delaware corporation (the "Company"), certain Selling
Stockholders named therein and each of you as
Representatives of the underwriters named therein, relating
to an underwritten public offering of Common Stock, $.01 par
value (the "Common Stock"), of the Company.
In order to induce the Representatives to enter
into the Underwriting Agreement, the undersigned agrees, for
a period of 120 days after the date of the initial public
offering of the shares of Common Stock to be sold pursuant
to the Underwriting Agreement, not to offer, sell, contract
to sell, pledge or otherwise dispose of, directly or
indirectly, any shares of Common Stock (other than shares of
Common Stock to be sold pursuant to the Underwriting
Agreement or shares of Common Stock disposed of as bona fide
gifts) or securities convertible into, or exchangeable or
exercisable for, any shares of Common Stock, or publicly
disclose the intention to make any such offer, sale, pledge
or disposal, without the prior written consent of CS First
Boston Corporation.
2
If for any reason the Underwriting Agreement shall
be terminated prior to the Closing Date (as defined in the
Underwriting Agreement), the agreement set forth above shall
likewise be terminated.
Very truly yours,
SCHEDULE I
Seacor Holdings, Inc.
Number of
Shares
Underwriter to be Purchased
- ----------- ---------------
CS First Boston Corporation.................
Salomon Brothers Inc........................
Wasserstein Perella Securities, Inc.........
-----------
Total Underwriters ( ).....................
===========
SCHEDULE II
Seacor Holdings, Inc.
Number of
Shares
Selling Stockholder to be Sold
- ------------------- ----------
Compagnie Nationale de Navigation
50 Boulevard Haussmann
Paris, France 75009.......................
Coastal Refining & Marketing, Inc.
9 Greenway Plaza
Houston, TX 77046.........................
Charles Fabrikant
c/o SEACOR Holdings, Inc.
11200 Westheimer
Suite 850
Houston, TX 77042.........................
Donald Toenshoff
39 Wood Land Road
Miller Place, NY 11789.......................
Alvin Wood
c/o National Response Corporation
2203 Timberloch Place
Suite 234
The Woodlands, TX 77380...................
Granville Conway
c/o SEACOR Holdings, Inc.
11200 Westheimer
Suite 850
Houston, TX 77042.........................
----------
Total............................
==========
<PAGE>
MASTER AGREEMENT
THIS MASTER AGREEMENT, dated as of June 6, 1996, by and among (A)
COMPAGNIE NATIONALE DE NAVIGATION, a French corporation ("CNN"), (B) SEACOR
HOLDINGS, INC., a Delaware corporation ("Holdings"), and (C) SEACOR WORLDWIDE
INC., a Delaware corporation ("SWW");
WITNESSETH:
WHEREAS, CNN, Holdings, and SWW have entered into a Memorandum of
Understanding, dated June 5, 1996 (the "MOU");
WHEREAS, the MOU provides for the sale and leaseback of certain vessels
between CNN and SWW, the purchase by CNN and subsequent purchase by SWW of
the vessel SCOUT FISH, the payment in full of certain promissory notes by
SWW, and the sale by CNN of certain shares of Holdings' stock through a
secondary offering;
WHEREAS, the parties are entering into this Master Agreement to
memorialize the various understandings set forth in the MOU and to provide
for its implementation.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, and of other good and valuable consideration, the
adequacy of which are hereby acknowledged, the parties agree as follows:
PART I
PURCHASE OF VESSELS; BAREBOAT CHARTER OF VESSELS;
LEASE/PURCHASE ARRANGEMENT
SWW AND CNN HEREBY AGREE AS FOLLOWS:
Section 1.01. Purchase of Certain Vessels. (a) SWW agrees to enter into
Memoranda of Agreement (individually, on "MOA" and, collectively, the "MOAs")
with CNN providing for the purchase by SWW of the vessels EREBUS, VEESEA
PEARL, CARANGUE, MEROU, and ALBACORE for the aggregate purchase price of
twenty million United States Dollars (US $20,000,000) and the respective
individual purchase prices and upon the terms and conditions specified below.
The MOAs shall be substantially in the form of the Memorandum of Agreement,
dated November 2, 1995, between CNN and SWW, relating to the sale of the
vessel TIGER FISH, on file with the United States Securities and Exchange
Commission, and shall be modified to reflect the respective conditions set
forth below.
(1) EREBUS. SWW agrees to purchase from CNN, upon completion of the
drydocking described below in this paragraph (1) (the "EREBUS Delivery
Date"), the vessel EREBUS against payment in cash of three million, six
hundred thousand United States dollars (US $3,600,000). The parties
acknowledge that the EREBUS is now due for a drydocking and that such
drydock is to be scheduled in connection with such vessel's present
charter obligations. The parties agree that the cost of such drydocking
and any repairs which are required at such time shall be for CNN's account
and that CNN shall make its best efforts to complete the drydocking of the
vessel by July 31, 1996.
The purchase of the EREBUS by SWW shall be subject to an inspection of
such vessel satisfactory to SWW which shall take place at a mutually
agreed time and place and which shall be for SWW's account. On the EREBUS
Delivery Date, the vessel shall be delivered to SWW in the part of
drydocking in Good Working Order, as hereinafter defined, without crewing
obligations, in class, free of any outstanding recommendations, and with
all certificates valid for twelve months from time of delivery. All spare
parts for the vessel, whether on board or ashore, shall be delivered to
SWW on the EREBUS Delivery Date and with respect thereto inventories shall
have been agreed by the parties prior to the EREBUS Delivery Date in
accordance with customary commercial practices.
(2) VEESEA PEARL. SWW agrees to purchase from CNN on the Closing Date,
as hereinafter defined, the vessel VEESEA PEARL against payment in cash of
four million, one-hundred thousand United States dollars (US $4,100,000).
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<PAGE>
The purchase of the VEESEA PEARL by SWW shall be "as is, where is." On
the Closing Date, the vessel shall be delivered to SWW without crewing
obligations, in class, free of any outstanding recommendations, and with
all certificates valid for twelve months from time of delivery. All spare
parts for the vessel, whether on board or ashore, other than those spare
outfittings and equipment stored in Marseilles and listed in Schedule
1.01(a)(2) hereto, shall be delivered to SWW on the Closing Date and with
respect thereto inventories shall have been agreed by the parties prior to
the Closing Date. In accordance with customary commercial practices, SWW
shall have the option to purchase from CNN within 6 months of the Closing
Date all spare outfittings and equipment for the VEESEA PEARL stored in
Marseilles, listed in Schedule 1.01(a)(2) hereto, at an option price to be
agreed upon by SWW and CNN.
(3) CARANGUE. SWW agrees to purchase from CNN on the Closing Date the
vessel CARANGUE against payment in cash of four million United States
dollars (US $4,000,000).
The purchase of the CARANGUE by SWW shall be subject to an inspection
of such vessel satisfactory to SWW which shall take place at a mutually
agreed time and place and which shall be for SWW's account. On the Closing
Date, the vessel shall be delivered to SWW in Good Working Order, without
crewing obligations, in class, free of any outstanding recommendations,
and will all certificates valid for twelve months from time of delivery.
All spare parts for the vessel, whether on board or ashore, shall be
delivered to SWW on the Closing Date and with respect thereto inventories
shall have been agreed by the parties prior to the Closing Date in
accordance with customary commercial practices.
(4) MEROU. SWW agrees to purchase from CNN on the Closing Date the
vessel MEROU against payment in cash of four million, five hundred
thousand United States dollars (US $4,500,000).
The purchase of the MEROU by SWW shall be subject to an inspection of
such vessel satisfactory to SWW which shall take place at a mutually
agreed time and place and which shall be for SWW's account. On the Closing
Date, the vessel shall be delivered to SWW in Good Working Order, without
crewing obligations, in class, free of any outstanding recommendations and
with all certificates valid for twelve months from time of delivery. All
spare parts for the vessel, whether on board or ashore, shall be delivered
to SWW on the Closing Date and with respect thereto inventories shall have
been agreed by the parties prior to the Closing Date in accordance with
customary commercial practices.
(5) ALBACORE. SWW agrees to purchase from CNN on the Closing Date the
vessel ALBACORE against payment in cash of three million, eight hundred
thousand United States dollars (US $3,800,000).
The purchase of the ALBACORE by SWW shall be subject to an inspection
of such vessel satisfactory to SWW which shall take place at a mutually
agreed time and place and which shall be for SWW's account. On the Closing
Date, the vessel shall be delivered to SWW in Good Working Order, without
crewing obligations, in class, free of any outstanding recommendations,
and with all certificates valid for twelve months from time of delivery.
All spare parts for the vessel, whether on board or ashore, shall be
delivered to SWW on the Closing Date and with respect thereto inventories
shall have been agreed by the parties prior to the Closing Date in
accordance with customary commercial practices.
(b) In connection with the aforementioned sale of vessels, CNN agrees to
deliver to SWW for each vessel (1) a Certificate of Class, (2) a deletion
certificate, if required by SWW, (3) a Certificate of Registry showing CNN as
sole owner of the vessel, free and clear of liens, encumbrances and defects,
(4) a Bill of Sale, in recordable form, warranting title to the vessel and
transferring title to SWW, (5) a Protocol of Delivery and Acceptance, (6) a
Certificate of Registry showing SWW as new owner of the vessel, and (7)
evidence that the insurance on the vessel was endorsed to SWW.
(c) CNN agrees to indemnify, hold harmless, and defend SWW against any and
all claims and demands (including costs and reasonable attorneys' fees in
defending such claims and demands), whether or not only such claims or
demands be found to be void, of whatsoever kind or nature and by whomsoever
2
<PAGE>
asserted, for injury to persons or property arising out of or in any way
connected with the condition, use, or operation of said vessels on or prior
to delivery of said vessels to SWW including, but not limited to, claims for
damages or injuries to, or loss of property, cargo, or personal effects,
claims for damages for personal injury or loss of life, and claims for
maintenance and cure.
(d) For the purposes of this Master Agreement, "Good Working Order" shall
include full performance compliance of all systems with the specifications
listed with respect to each vessel, as set forth in Schedule 1.01(d) hereto.
Section 1.02. Bareboat Charter of Certain Vessels. (a) In connection with
the purchase of the vessels CARANGUE, MEROU and ALBACORE, CNN agrees to enter
into Bareboat Charters (individually, a BBC and, collectively, the "BBCs")
with SWW relating to the vessels CARANGUE, MEROU and ALBACORE and upon the
terms and conditions specified below. The BBCs shall be substantially in the
form of the Bareboat Charter, dated December 17, 1993, between CNN and SWW,
relating to the vessel PIKE, on file with the United States Securities and
Exchange Commission, and shall be modified to reflect the respective
conditions set forth below. CNN shall have the right to assign such BBCs to
any of its wholly-owned subsidiaries without SWW's consent; provided, that
CNN remains responsible under such BBCs.
(1) CARANGUE. CNN agrees to bareboat charter the CARANGUE from SWW, as
of the Closing Date, for a term of three and a half years, at a bareboat
hire rate of two thousand, five hundred United States Dollars (US $2,500)
per day, payable monthly in advance.
CNN shall have the right to terminate the CARANGUE BBC, upon 60 days'
written notice to SWW and payment of an early termination fee in the
amount of $450,000 if terminated between January 1, 1997, and June 30,
1997, $400,000 if terminated between July 1, 1997, and December 31, 1997,
$350,000 if terminated between January 1, 1998, and June 30, 1998,
$300,000 if terminated between July 1, 1998, and December 31, 1998,
$250,000 if terminated between January 1, 1999 and June 30, 1999 and
$200,000 if terminated between July 1, 1999 and December 31, 1999.
So long as no default in the payment of charter hire or in the
performance of the other terms shall have occurred and be continuing under
the CARANGUE BBC and until termination of the CARANGUE BBC in accordance
with the terms thereof, CNN shall be entitled, upon written notice given
to SWW not less than 60 days prior to expiration of the CARANGUE BBC, to
renew the terms of the CARANGUE BBC for an additional term of three years,
at a bareboat hire rate of two thousand, five hundred United States
Dollars (US $2,500) per day through June 30, 2001, payable monthly in
advance, and thereafter at a bareboat hire rate of two thousand, one
hundred nine United States dollars (US $2,109) per day, payable monthly in
advance.
(2) MEROU. CNN agrees to bareboat charter the MEROU from SWW, as of
the Closing Date, for a term of three and a half years, at a bareboat hire
rate of two thousand, seven hundred ten United States Dollars (US $2,710)
per day, payable monthly in advance.
CNN shall have the right to terminate the MEROU BBC, upon 60 days'
written notice to SWW and payment of an early termination fee in the
amount of $450,000 if terminated between January 1, 1997, and June 30,
1997, $400,000 if termi-nated between July 1, 1997, and December 31, 1997,
$350,000 if terminated between January 1, 1998 and June 30, 1998, $300,000
if terminated between July 1, 1998, and December 31, 1998, $250,000 if
terminated between January 1, 1999 and June 30, 1999, and $200,000 if
terminated between July 1, 1999 and December 31, 1999.
So long as no default in the payment of charter hire or in the
performance of the other terms shall have occurred and be continuing under
the MEROU BBC and until termination of the MEROU BBC in accordance with
the terms thereof, CNN shall be entitled, upon written notice given to SWW
not less than 60 days prior to expiration of the MEROU BBC, to renew the
terms of the MEROU BBC for an additional term of three years, at a
bareboat hire rate of two thousand, seven hundred ten United States
Dollars (US $2,710) per day through June 30, 2001, payable monthly in
advance, and thereafter at a bareboat hire rate of two thousand, four
hundred ten United States dollars (US $2,410) per day, payable monthly in
advance.
3
<PAGE>
(3) ALBACORE. CNN agrees to bareboat charter the ALBACORE from SWW, as
of the Closing Date, for a term of two and a half years, at a bareboat
hire rate of two thousand United States Dollars (US $2,000) per day,
payable monthly in advance.
So long as no default in the payment of charter hire or in the
performance of the other terms shall have occurred and be continuing under
the ALBACORE BBC and until termination of the ALBACORE BBC in accordance
with the terms thereof, CNN shall be entitled, upon written notice given
to SWW not less than 60 days prior to expiration of the ALBACORE BBC, to
renew the terms of the ALBACORE BBC for an additional term of three years,
at a bareboat hire rate of two thousand United States Dollars (US $2,000)
per day, payable monthly in advance.
(b) CNN further agrees that, during the term of each BBC, including any
option periods thereunder, and until expiration thereof, the vessels will be
used exclusively for the French Navy or in the domestic French market. Any
use of the vessels outside of the foregoing markets shall not be permitted
absent the express written consent of SWW.
(c) Redelivery of vessels pursuant to each of the afore-mentioned BBCs
shall be subject to a survey condition satisfactory to SWW to be conducted by
Noble Denton or other mutually agreeable surveyor and shall be at one safe
European part in the western Mediterranean Sea. Each such vessel shall be
delivered to SWW in Good Working Order, without crewing obligations, in
class, free and clear of recommendations, with all documentation valid for
the 12 months without extension following redelivery of the vessel. All spare
parts relating to such vessels shall be redelivered to SWW at termination of
the BBCs. A full inventory for such bareboat chartered vessels shall be
determined jointly by CNN and SWW at a mutually agreeable time and place in
accordance with customary commercial practices.
Section 1.03. Lease/Purchase Arrangement. (a) CNN agrees that, on July 4,
1996, it will declare its intention, pursuant to the Bareboat Charterparty,
dated January 20, 1992, between CNN, as charterer, and K/S UL Fish, as owner
(the "CNN/UL charter"), to purchase the vessel SCOUT FISH. On August 4, 1996,
CNN shall purchase said vessel against payment of three million, six hundred
seventy five thousand United States dollars (US $3,675,000).
(b) SWW agrees to purchase from CNN, upon completion of the drydocking
described below in this paragraph (b) (the "SCOUT FISH Delivery Date"), the
vessel SCOUT FISH against payment in cash of two million, six hundred seventy
five thousand United States dollars (US $2,675,000). The parties acknowledge
that the SCOUT FISH will be due for a drydocking upon the purchase thereof
and the parties agree that the cost of such drydocking and any repairs which
are required at such time shall be for CNN's account. CNN agrees to make its
best efforts to complete the drydocking and to deliver the vessels in the
Pointe Noire Abidjan range by August 30, 1996.
(c) The purchase of the SCOUT FISH by SWW shall be subject to an
inspection of such vessel satisfactory to SWW which shall take placed at a
mutually agreed time and place and which shall be for SWW's account. CNN
agrees to keep SWW informed of the drydocking schedule and work to be
performed on such vessel. On the SCOUT FISH Delivery Date, the vessel shall
be delivered to SWW in Good Working Order, without crewing obligations, in
class, free of any outstanding recommendations, and with all certificates
valid for twelve months from time of delivery. All spare parts for the vessel
shall be delivered to SWW on the SCOUT FISH Delivery Date and with respect
thereto inventories shall have been agreed by the parties prior to the SCOUT
FISH Delivery Date in accordance with customary commercial practices.
(d) In connection with the purchase of the SCOUT FISH, CNN agrees to
deliver to SWW (1) a Certificate of Class, (2) a deletion certificate, if
required by SWW, (3) a Certificate of Registry showing CNN as sole owner of
the vessel, free and clear of liens, encumbrances and defects, (4) a Bill of
Sale, in recordable form, warranting title to the vessel and transferring
title to SWW, (5) a Protocol of Delivery and Acceptance, (6) a Certificate of
Registry showing SWW as new owner of the vessel, and (7) evidence that the
insurance on the vessel was endorsed to SWW.
(e) CNN agrees to indemnify, hold harmless, and defend SWW against any and
all claims and demands (including costs and reasonable attorneys' fees in
defending such claims and demands), whether
4
<PAGE>
or not any such claims or demands be found to be void, of whatsoever kind or
nature and by whomsoever asserted, for injury to persons or property arising
out of or in any way connected with the condition, use, or operation of said
vessel on or prior to delivery of said vessel to SWW including, but not
limited to, claims for damages or injuries to, or loss of, property, cargo,
or personal effects, claims for damages for personal injury or loss of life,
and claims for maintenance and cure.
Section 1.04. Loss of a Vessel. (a) In the event of a total loss or
constructive total loss of a vessel between the date hereof and the Closing
Date, then (1) the purchase of such vessel contemplated in Section 1.01
hereto shall not be effectuated and (2) CNN shall pay to SWW fifty percent
(50%) of the difference between (i) the purchase price of such vessel set
forth in Section 1.01 hereto and (ii) the amount specified in Schedule 1.04
hereto with respect to such vessel, which is the amount of proceeds payable
under policies of insurance in the event of a total loss or constructive
total loss of a vessel.
(b) CNN agrees and undertakes to maintain the insurance coverage on each
of the vessels listed in Schedule 1.04 at the insured values set forth in
said Schedule 1.04 up to and through the Closing Date.
Section 1.05. Crewing. In connection with the acquisition of the EREBUS
and VEESEA PEARL by SWW, the acquisition by SWW and bareboat charter by CNN
of the CARANGUE, MEROU, and ALBACORE, and the acquisition by CNN and
subsequent acquisition by SWW of the SCOUT FISH, it is contemplated that the
manning arrangements will be provided at the direction and control and in the
employ of the new respective owners, in the case of the EREBUS, VEESEA PEARL,
and SCOUT FISH from the date of delivery of such vessel to SWW and, in the
case of the CARANGUE, MEROU, and ALBACORE from the time of the respective
redelivery dates, and the disponent owners, in the case of vessels bareboat
chartered as contemplated herein, subject to the requirements for notice and
early termination of employment of the existing officers and crews on board
those vessels on or prior to the date of delivery with respect to the EREBUS,
VEESEA PEARL, and SCOUT FISH and on or prior to redelivery of each of the
CARANGUE, MEROU and ALBACORE pursuant to the BBCs, in accordance with
contracts to which CNN is a party. CNN agrees and undertakes to give all
appropriate notices of termination and to arrange for and pay, and to
indemnify and hold SWW harmless from, any and all expenses relating thereto
or arising in connection with the early termination of employment of all
officers and crews on board the vessels, including, without limitation, any
redundancy payments, retirement and medical benefits, and any other payments
which are required by law or contract. Where possible, SWW agrees either
directly or through manning agents to offer employment on international terms
to those officers and crew previously employed on the vessels acquired by SWW
as contemplated herein.
PART II
PAYMENT OF PROMISSORY NOTES
SWW agrees that, on the Closing Date, SWW will prepay to CNN the aggregate
principal amount, and all accrued and unpaid interest on, each of the
following promissory notes issued by SWW: the Three year promissory note in
the principal amount of $1,200,000 issued by SWW to CNN maturing December 17,
1996, bearing interest at the rate of 3.75%; the Four year promissory note in
the principal amount of $1,200,000 issued by SWW to CNN maturing December 17,
1997, bearing interest at the rate of 4.0%; the Five year promissory note in
the principal amount of $1,200,000 issued by SWW to CNN maturing December 17,
1998, bearing interest at the rate of 4.25%; the Six year promissory note in
the principal amount of $1,200,000 issued by SWW to CNN maturing December 17,
1999, bearing interest at the rate of 4.50%; the Seven year promissory note
in the principal amount of $1,200,000 issued by SWW to CNN maturing December
17, 2000, bearing interest at the rate of 4.75%; the Eight year promissory
note in the principal amount of $1,200,000 issued by SWW to CNN maturing
December 17, 2001, bearing interest at the rate of 5.0%; the Nine year
promissory note in the principal amount of $1,200,000 issued by SWW to CNN
maturing December 17, 2002, bearing interest at the rate of 5.25%; the Ten
year promissory note in the principal amount of $1,200,000 issued by SWW to
CNN maturing December 17, 2003, bearing interest at the rate of 5.5%.
5
<PAGE>
PART III
SECONDARY OFFERING
Holdings agrees that it shall prepare and file with the United States
Securities and Exchange Commission a registration statement on Form S-3 (or
on an appropriate form under the U.S. Securities Act as may be available for
use by Holdings relating to the resale of 616,698 shares of Holdings Common
Stock, which number of shares includes 459,948 shares issued to CNN in
connection with the Global Agreement, dated November 14, 1995, among CNN and
its subsidiaries, Holdings and its subsidiaries, and SEAFISH, Ltd., and
156,650 shares to be issued to CNN upon CNN's exercise of its conversion
rights under the $4,750,000 outstanding principal amount of the 2.5%
Convertible Notes due July 1, 2007, issued to CNN on December 17, 1993. CNN
agrees to exercise such conversion rights in connection with such resale. All
such shares will be included in such registration statement on the terms and
subject to the conditions of the Investment and Registration Rights
Agreement, dated November 14, 1995, between Holdings and CNN, and the
applicable underwriting agreement to which Holdings and CNN will be parties.
PART IV
REPRESENTATIONS AND WARRANTIES
A. Each of CNN, Holdings, and SWW hereby represents and warrants to each
other that:
a. It has been duly organized under the laws of the jurisdiction in
which it was incorporated and is validly existing as a corporation in good
standing under the laws of said jurisdiction.
b. No proceedings have been instituted or are pending for its
dissolution or liquidation or that would threaten its corporate existence
or the forfeiture of any of its corporate rights.
c. Each signatory hereto is one of its duly elected and qualified
officers, holds the office set forth opposite his name on the date hereof,
is duly authorized to act on its behalf, and the signature set forth
opposite the name of such officer is his genuine signature.
d. It has full power, authority, and legal right to execute, deliver,
and perform this Master Agreement and each of the other instruments and
agreements herein mentioned to which it is or is to be a party and to
carry out the transactions contemplated hereby.
e. This Master Agreement and each of the other instruments and
agreements herein mentioned to which it is a party have been duly
authorized and/or ratified by all necessary and proper corporate action
and each of them constitutes or, when executed and delivered, will
constitute a valid, legal, and binding obligation or agreement of the
company party thereto enforceable in accordance with their respective
terms except as may be limited by bankruptcy, insolvency, moratorium, or
other similar laws affecting the rights of creditors generally and except
as equitable remedies such as specific performance may be in the
discretion of the courts.
f. Neither its execution or delivery of this Master Agreement and each
of the other instruments and agreements herein mentioned to which it is or
is to be a party nor its performance or observance of the terms,
conditions, or provisions thereof (i) does or will conflict with or
violate any current (as of the time this representation is made or remade)
law or governmental rule, regulation or order or any judicial or
administrative order or decree binding on it, (ii) does or will conflict
with or violate its instruments of corporate governance, (iii) does or
will conflict with, violate, or result in a breach of any other agreement
or instrument to which it is a party or does or will constitute a default
thereunder which would have a material adverse effect on its ability to
perform or observe any of the terms, conditions, or provisions of this
Master Agreement or the other agreements contemplated hereby, (iv) does or
will result in the creation of any lien, charge, or encumbrance on any of
its assets other than as contemplated hereby, or (v) does or will require,
on the part of the company, the consent or approval of, the giving of
notice to, the registration with, or the taking of any other action in
respect to, any governmental or public authority or agency.
6
<PAGE>
g. It has obtained any consents required prior to entering into this
Master Agreement and each instrument and agreement herein mentioned to
which it is a party.
h. There are not actions, suits or proceedings pending or, to the best
of its knowledge, threatened before any court or by or before any other
governmental or public authority or agency, or any arbitrator, domestic or
foreign, which, if determined adversely, would have a materially adverse
effect on its business or financial condition, or a material adverse
effect on its ability to perform its obligations under this Master
Agreement and each of the other instruments and agreements herein
mentioned to which it is or is to be a party or would affect the validity
of any such agreement or instrument.
B. CNN hereby warrants and represents to SWW and Holdings that:
a. It is the sole owner of each of the EREBUS, VEESEA PEARL, CARANGUE,
MEROU, and ALBACORE and, at delivery of each of the foregoing vessels to
SWW, such vessels shall be free of any and all claims, liens,
encumbrances, mortgages, or defects.
b. It is now and, since the commencement thereof has been, in full
compliance with the terms of the CNN/UL Charter, is not in default
thereunder, and has the right to purchase the vessel SCOUT FISH pursuant
thereto and as expressed and contemplated by this Master Agreement.
c. Each of the vessels listed in Schedule 1.04 hereto is insured,
under policies of insurance currently in effect, up to the amount
specified in such Schedule 1.04 for losses resulting from the total loss
or constructive total loss of a vessel.
PART V
MISCELLANEOUS
All the parties hereto agree as follows:
Section 6.01. Conditions to Closing. The acquisition by SWW vessels,
purchase of the SCOUT FISH by CNN and subsequent purchase thereof by SWW,
repurchase of the SWW promissory notes, and sale of the CNN shares shall all
be contingent on the successful completion of a secondary offering of
Holdings' shares and the issuance and sale by Holdings pursuant thereto of no
less than 300,000 shares on or prior to July 3, 1996.
It is also understood that Holdings, at its sole option, may include other
selling shareholders, including management, as secondary shareholders.
This Master Agreement contemplates pricing of the secondary/primary
offering of Holdings shares no later than June 28, 1996, and closing pursuant
hereto no later than July 3, 1996 and the date of such closing shall be the
"Closing Date" for the purposes of the agreement.
In all events, charter hire in the case of bareboat charters shall
commence only on the date of actual closing and all revenue earned by vessels
shall be for the account of CNN until the Closing Date.
The Closing Date may be extended by mutual agreement of the parties and
the price received for selling CNN shares of Holdings may be changed with
CNN's agreement.
Section 6.02. Amendments. This Master Agreement may not be amended,
modified or terminated except in writing and signed by the duly authorized
representative of the parties hereto and affected thereby.
Section 6.03. Severability. In the event that any provision of this Master
Agreement should be held to be illegal or unenforceable by any court or
administrative body of competent jurisdiction, the same shall not affect the
other provisions of this Master Agreement, which shall remain in force,
unless such partial nullity changes the major conditions of the understanding
between the parties as they result from or are recorded in this Master
Agreement. The parties shall endeavor, in each case, to replace the
unenforceable provision with a new provision in accordance with the spirit of
this Master Agreement.
7
<PAGE>
Section 6.04. Successors and Assigns. Except as otherwise provided herein,
no party hereto may sell, assign or otherwise transfer any such party's
rights or interest under this Master Agreement without the prior consent of
the other parties hereto. This Master Agreement and all the terms and
provisions hereof shall be binding upon and inure to the benefit of the
heirs, personal representatives, successors and assigns of the parties
hereto.
Section 6.05. Notices. All communications and notices provided for herein
shall be in writing or by a telecommunications device capable of creating a
written record, and any such notice shall become effective (a) upon personal
delivery thereof, including, without limitation, by overnight express mail
and courier service, (b) five (5) days after the date on which it shall have
been mailed by United States mail, certified or registered, postage prepaid,
return receipt requested, or (c) in the case of notice by such a
telecommunications device, upon confirmation of receipt by such device, in
each case addressed to each party hereto at its address set forth below or at
such other address as such party may from time to time designate by written
notice to the other parties hereto:
For CNN:
Until June 14, 1996 Compagnie Nationale de Navigation 50,
Boulevard Haussmann 75009 Paris
FRANCE Fax: 33(1)42.81.20.37
After June 17, 1996: 128, Boulevard Haussmann 75008 Paris
FRANCE Fax: 33(1)45.22.48.03
For SWW and Holdings: SEACOR Holdings, Inc. 1370 Avenue of
the Americas 25th Floor New York, New
York 10019 Fax: (212) 582-8522
Section 6.06. Disputes. (a) Any dispute or difference of opinion arising
between the parties as to any matter or things arising out of or relating to
this Master Agreement or any provision thereof which cannot be resolved
amicably, shall be referred to and determined by arbitration in London under
the Arbitration Rules of the London Maritime Arbitrators Association.
(b) The Tribunal shall consist of three arbitrators and shall be
constituted as follows:
(i) The claimant on behalf of itself and its affiliates shall nominate
an arbitrator and may by notice in writing call on the other Group and its
affiliates, if any, to nominate an arbitrator within 15 days of the
notice, failing which such arbitrator shall at the request of the claimant
be appointed by the London Maritime Arbitration Association.
(ii) The third arbitrator (who shall serve as president of the
Tribunal) shall be appointed by agreement between the two arbitrators
appointed under (i) above or, in default of agreement within 15 days of
the appointment of the second arbitrator, on the nomination of the London
Maritime Arbitrators Association at the written request of either or both
of the parties; provided, however, that such arbitrator shall be a
businessman, experienced in the subject matter of the transaction.
(iii) Should a vacancy arise because any arbitrator dies, resigns,
refuses to act as an arbitrator, or becomes incapable of performing his
functions, the vacancy shall be filled by the method by which that
arbitrator was originally appointed.
8
<PAGE>
The procedure to be followed shall be agreed by the parties or, in default
of agreement within 15 days of the appointment of the third arbitrator,
determined by the Tribunal. In the event of default by any party in respect
of any procedural order made by the Tribunal, the Tribunal shall have power
to proceed with the arbitration in the absence of that party and to deliver
its award.
The Tribunal in resolving any disputes shall apply the principles of New
York laws. Any award or procedural decision of the Tribunal shall if
necessary be made by majority vote. In the event of no majority being formed,
the president shall have an additional controlling vote. The award of the
Tribunal shall be final and binding upon the parties and may, if necessary,
be enforced as a judgment by any competent authority. It is hereby agreed
that if any question of law arises in the arbitration award, or in the course
of this reference, no appeal may be made to the High Court under section 1 of
the Arbitration Act 1979 and no application may be made under section 2 of
the said Act.
Section 6.07. Limitation of Liability. As to the indemnities provided by
CNN in Section 1.01(c), said indemnities are to be limited to amounts
recoverable under policies of insurance (including deductibles and
self-insurance). CNN represents and warrants that it has policies of
insurance in effect which are commercially prudent under the circumstances,
that such insurance is in full force and effect and that it is in compliance
with the terms, conditions and provisions thereof.
Section 6.08. Entire Agreement of the Parties. This Master Agreement
constitutes the entire agreement of the parties and shall supersede all prior
agreements, oral or written.
Section 6.09. Counterparts. This Master Agreement may be executed in any
number of counterparts, each an original, but which together constitute but
one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Master Agreement to be
executed as of the day and year first above written.
COMPAGNIE NATIONALE DE NAVIGATION
By: /s/ Gilles Bouthillier
-----------------------------------
Chairman
SEACOR HOLDINGS, INC.
By: /s/ Randall Blank
-----------------------------------
Executive Vice President
SEACOR WORLDWIDE INC.
By: /s/ Randall Blank
-----------------------------------
Vice President
9
<PAGE>
SCHEDULE 1.04
INSURED VALUES FOR VESSELS
<TABLE>
<CAPTION>
NAME OF VESSEL INSURED VALUE
- -------------------------- ---------------
<S> <C>
EREBUS ................... US $7,200,000
VEESEA PEARL ............. US $6,500,000
CARANGUE ................. US $7,000,000
MEROU .................... US $8,600,000
ALBACORE ................. US $8,000,000
SCOUT FISH ............... US $7,000,000
</TABLE>
10
<PAGE>
EXHIBIT 15.1
June 7, 1996
SEACOR Holdings, Inc.
We are aware that SEACOR Holdings, Inc. has included in this Registration
Statement the financial information required in its Form 10-Q for the three
months ended March 31, 1996 and 1995, and our report dated May 9, 1996,
covering the unaudited interim financial information for the three months
ended March 31, 1996 and 1995 as well as our reports on the pro forma
financial information as of March 31, 1996. Pursuant to Regulation C of the
Securities Act of 1933, these reports are not considered a part of the
registration statement prepared or certified by our firm or reports prepared
or certified by our firm within the meanings of Sections 7 and 11 of the Act.
Very truly yours,
/s/Arthur Anderson LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference into this registration statement of our report dated February 20,
1996, included in SEACOR Holdings, Inc.'s Annual Report on Form 10-K for the
year ended December 31, 1995 and to all references to our Firm included in
this registration statement.
/s/ Arthur Andersen LLP
New Orleans, Louisiana
June 7, 1996
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration Statement
on Form S-3 (Registration No. 333- ) of our report dated February 20,
1996, on our audit of the consolidated financial statements of CRN Holdings,
Inc. and Subsidiaries as of December 31, 1995 and for the year then ended,
which report is included in the Form 10-K of SEACOR Holdings, Inc. for the
year ended December 31, 1995. We also consent to the reference to our firm
under the caption "Experts."
/s/ Coopers & Lybrand L.L.P.
Melville, New York
June 6, 1996
EXHIBIT 23.4
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference into this registration statement of our reports dated April 10,
1995 (except with respect to the matter discussed in Note 14, as to which the
date is December 7, 1995) and March 24, 1994 (except with respect to the
matter discussed in Note 10, as to which the date is December 7, 1995), with
respect to the financial statements of John E. Graham & Sons and Offshore
Trawlers, Inc. and Subsidiaries as of December 31, 1994, 1993 and 1992 and
for each of the years then ended, included in SEACOR Holdings, Inc.'s Current
Report on Form 8-K dated September 15, 1995, and to all references to our
Firm included in this registration statement.
/s/ Dudley, Ruland & Chateau P.C.
Mobile, Alabama,
June 7, 1996
