<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
------------------
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-18312
--------------------------
TUBOSCOPE VETCO INTERNATIONAL CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 76-0252850
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2835 Holmes Road, Houston, Texas 77051
- --------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
(713) 799-5100
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(Registrant's telephone number, including area code)
None
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(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13, or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
--- ---
The Registrant had 43,563,837 shares of common stock outstanding as of
March 31, 1997.
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TUBOSCOPE VETCO INTERNATIONAL CORPORATION
INDEX
<TABLE>
<CAPTION>
Page No.
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<S> <C>
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheets -
March 31, 1997 (unaudited) and December 31, 1996 2
Unaudited Consolidated Statements of Operations -
For the Three Months Ended March 31, 1997 and 1996 3
Unaudited Consolidated Statements of Cash Flows -
For the Three Months Ended March 31, 1997 and 1996 4
Notes to Unaudited Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition 6-8
Part II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 9
Signature Page 10
Exhibit Index 11-14
Appendix A - Financial Data Schedule 15
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
1
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TUBOSCOPE VETCO INTERNATIONAL CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
---------- ------------
<S> <C> <C>
(In thousands)
A S S E T S
-----------
Current assets:
Cash and cash equivalents............................................................ $ 10,458 $ 10,407
Accounts receivable, net............................................................. 111,673 96,083
Inventory, net....................................................................... 52,137 47,170
Deferred income taxes................................................................ 776 776
Prepaid expenses and other........................................................... 15,726 11,797
--------- --------
Total current assets............................................................... 190,770 166,233
--------- --------
Property and equipment:
Land, buildings and leasehold improvements........................................... 75,787 73,499
Operating equipment and equipment leased to customers................................ 169,884 167,440
Accumulated depreciation and amortization............................................ (63,077) (59,559)
--------- --------
Net property and equipment......................................................... 182,594 181,380
Identified intangibles, net............................................................ 22,348 22,583
Goodwill, net.......................................................................... 161,283 132,125
Other assets, net...................................................................... 5,200 2,844
-------- --------
Total assets....................................................................... $562,195 $505,165
======== ========
L I A B I L I T I E S A N D E Q U I T Y
-------------------------------------------
Current liabilities:
Accounts payable..................................................................... $ 36,695 $ 28,896
Accrued liabilities.................................................................. 56,654 41,554
Income taxes payable................................................................. 6,264 4,876
Current portion of long-term debt and short-term borrowings.......................... 21,313 16,514
-------- --------
Total current liabilities.......................................................... 120,926 91,840
Long-term debt......................................................................... 165,402 168,229
Pension liabilities.................................................................... 9,332 9,846
Deferred taxes payable................................................................. 16,295 15,364
Other liabilities...................................................................... 1,790 984
-------- --------
Total liabilities.................................................................. 313,745 286,263
-------- --------
Common stockholders' equity:
Common stock, $.01 par value, 60,000,000 shares authorized, 43,563,837 shares
issued and outstanding (41,612,495 at December 31, 1996)............................ 436 416
Paid-in capital...................................................................... 285,735 261,932
Retained earnings (deficit).......................................................... (34,350) (42,949)
Cumulative translation adjustment.................................................... (3,371) (497)
-------- --------
Total common stockholders' equity.................................................. 248,450 218,902
-------- --------
Total liabilities and equity....................................................... $562,195 $505,165
======== ========
</TABLE>
See notes to unaudited consolidated financial statements.
2
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TUBOSCOPE VETCO INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1997 1996
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(in thousands, except per share data)
<S> <C> <C>
Revenue............................................................................. $ 105,501 $ 47,018
Costs and expenses:
Cost of services and products sold................................................ 72,574 35,171
Goodwill amortization............................................................. 1,107 192
Selling, administrative and general............................................... 11,172 5,001
Research and engineering costs.................................................... 2,475 837
Write-off of long term assets..................................................... -- 63,061
----------- -----------
87,328 104,262
----------- -----------
Operating profit (loss)............................................................. 18,173 (57,244)
Other expense (income):
Interest expense.................................................................. 3,523 2,595
Interest income................................................................... (33) (31)
Foreign exchange.................................................................. 132 (155)
Other, net....................................................................... 455 510
----------- -----------
Income (loss) before income taxes................................................... 14,096 (60,163)
Provision (benefit) for income taxes................................................ 5,498 (4,574)
----------- -----------
Net income (loss)................................................................... 8,598 (55,589)
Dividends applicable to redeemable preferred stock.................................. -- 175
Net income (loss) applicable to common stock........................................ $ 8,598 $ (55,764)
=========== ===========
Earnings (loss) per common share.................................................... $ 0.19 $ (2.97)
=========== ===========
Weighted average number of common shares outstanding................................ 44,164,372 18,759,499
=========== ===========
</TABLE>
See notes to unaudited consolidated financial statements.
3
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TUBOSCOPE VETCO INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1997 1996
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<S> <C> <C>
(in thousands)
Cash flows from operating activities:
Net income (loss)........................................................................ $ 8,598 $(55,589)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization.......................................................... 5,843 2,572
Compensation related to stock plan..................................................... 114 66
Write-off of long-term assets.......................................................... -- 63,061
Provision (benefit) for deferred income taxes.......................................... 514 (6,386)
Changes in current assets and liabilities net of effects from acquisitions:
Accounts receivable................................................................. (12,655) 1,622
Inventory........................................................................... (3,326) 325
Prepaid expenses and other assets................................................... (3,600) (692)
Accounts payable, accrued liabilities and other..................................... 8,942 379
Federal and foreign income taxes payable............................................ 793 (516)
--------- --------
Net cash provided by operating activities.............................................. 5,223 4,842
--------- --------
Cash flow used for investing activities:
Capital expenditures..................................................................... (4,940) (2,132)
Business acquisitions, net of cash acquired.............................................. 1,734 (677)
Other.................................................................................... (433) (671)
--------- --------
Net cash used for investing activities................................................. (3,639) (3,480)
--------- --------
Cash flows used for financing activities:
Borrowings under financing agreements, net............................................... 1,889 --
Principal payments under financing agreements............................................ (5,167) (3,158)
Dividends paid on Redeemable Series A Convertible Preferred Stock........................ -- (175)
Proceeds from sale of common stock....................................................... 1,745 489
--------- --------
Net cash used for financing activities................................................. (1,533) (2,844)
--------- --------
Net increase (decrease) in cash and cash equivalents.......................................... 51 (1,482)
Cash and cash equivalents:
Beginning of period...................................................................... 10,407 9,394
--------- --------
End of period............................................................................ $ 10,458 $ 7,912
========= ========
Supplemental disclosure of cash flow information:
Cash paid during the three month period for:
Interest............................................................................... $ 2,541 $ 589
========= ========
Taxes.................................................................................. $ 3,634 $ 2,345
========== ========
</TABLE>
See notes to unaudited consolidated financial statements.
4
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TUBOSCOPE VETCO INTERNATIONAL CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
AND AS OF DECEMBER 31, 1996
1. ORGANIZATION AND BASIS OF PRESENTATION OF INTERIM CONSOLIDATED FINANCIAL
STATEMENTS
The accompanying unaudited consolidated financial statements of the Company
and its wholly-owned subsidiaries have been prepared pursuant to the rules
and regulations of the Securities and Exchange Commission. Certain
information in footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to these rules and
regulations. The unaudited consolidated financial statements included in
this report reflect all the adjustments which the Company considers
necessary for a fair presentation of the results of operations for the
interim periods covered and for the financial condition of the Company at
the date of the interim balance sheet. Results for the interim periods are
not necessarily indicative of results of the year.
The financial statements included in this report should be read in
conjunction with the audited financial statements and accompanying notes
included in the Company's 1996 Form 10-K, filed under the Securities
Exchange Act of 1934 (Commission File No. 0-18312).
2. INVENTORY
At March 31, 1997 inventories consist of the following (in thousands):
<TABLE>
<S> <C>
Components, subassemblies, and expendable parts....... $ 38,657
Equipment under production............................ 13,480
--------
$ 52,137
========
</TABLE>
3. SENIOR CREDIT AGREEMENT AND DIVIDEND RESTRICTIONS
The Company's Senior Credit Agreement restricts the Company from paying
dividends on its capital stock until all mandatory prepayments have been
made from excess cash flow (as defined in the Credit Agreement) and the
total funded debt to capital ratio (as defined in the Credit Agreement) is
not greater than 40%. The Company's total funded debt to capital ratio
(calculated as defined under the Credit Agreement) was 43.6% at March 31,
1997.
4. ACQUISITION OF FIBER GLASS SYSTEMS, INC.
On March 7, 1997, the Company acquired Fiber Glass Systems, Inc. ("FGS"), a
manufacturer of premium fiberglass tubulars used in corrosive oilfield
applications, for an aggregate purchase price of $32,671,283, which
aggregate purchase price includes consideration that may be received
pursuant to certain earnout provisions (relating to FGS' fiscal 1997
performance). The $32,671,283 aggregate purchase price includes (i)
1,689,542 shares of Common Stock of the Company valued at $13.00 per share
and $906,869 in cash and (ii) the right to receive up to an additional
726,316 shares of Common Stock of the Company and $355,260 in cash,
contingent upon the realization of such earnout provisions. The potential
earnout of $9,797,355 has been accrued at March 31, 1997.
5
<PAGE>
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition
RESULTS OF OPERATIONS
- ---------------------
REVENUE. Revenue was approximately $105.5 million for the first quarter of 1997
compared to approximately $47.0 million for the first quarter of 1996, an
increase of $58.5 million or 124%. The increase was primarily due to seven 1996
acquisitions and one acquisition which was completed in the first quarter of
1997. The most significant acquisition was the merger with D.O.S. Ltd.
("Drexel") which was completed effective as of April 1, 1996, (the "Drexel
Merger"). On a pro forma basis for the effects of the Drexel Merger, revenue was
up $22.9 million or 28% compared to the first quarter of 1996. In addition, oil
and gas drilling and production activity increased significantly in the first
quarter of 1997 compared to 1996 as evidenced by increases in the U.S. rig
activity (20% increase), U.S. workover activity (14% increase), Canada rig
activity (17% increase), and international rig activity (3% increase). This
improved operating environment also contributed to the Company's first quarter
1997 increase in revenue.
Revenue from the Company's Tubular Services, comprised of Inspection, Coating,
and Mill Systems and Sales was approximately $43.4 million for the first quarter
of 1997, up $3.5 million or 9% over the first quarter of 1996. The increase in
Tubular Services revenue was mainly due to an increase in North America and
European Coating operations and the acquisition of Fiber Glass Systems, Inc.
("FGS") which was completed on March 7, 1997. Inspection revenue was unchanged
from the first quarter of 1996 as increases in Southern U.S. inspection
operations were offset by lower international inspection revenue, primarily in
Saudi Arabia and the recently closed Italian and Japan operations.
The Drexel Merger added the rental and sale of Solids Control equipment to the
Company's operations. In addition, the Company completed the acquisition of four
other Solids Control related businesses in 1996. Solids Control operations,
which includes the rental and sale of equipment used in the removal of rock
cuttings and other solid contaminants from the mud used in drilling operations,
earned revenue of $33.2 million in the first quarter of 1997. On a pro forma
basis for the Drexel Merger, Solids Control revenue was up $12.8 million or 63%
from the same period in 1996. The increase was due to an increase in drilling
activity, the 1996 acquisitions, and improved Latin America operations in
Venezuela, Argentina, and Colombia. In addition, strong drilling activity in
Canada and the U.S. gulf coast also lead to improved rental operations. Solids
Control equipment sales were also up due to Western Hemisphere sales.
Coiled Tubing and Pressure Control Products, which were also acquired as part of
the Drexel Merger, contributed revenue of $16.8 million in the first quarter of
1997. During September 1996, the Company enhanced its Coiled Tubing and Pressure
Control Products operations through the purchase of S.S.R. (International) Ltd.
and Pressure Control Engineering ("SSR/PCE"). Coiled Tubing and Pressure Control
Products include the sale of coiled tubing units, wire line units, downhole
tools and blowout preventors used in oilfield workover, drilling and production
operations. On a pro forma basis for the Drexel Merger , Coiled Tubing and
Pressure Control Products revenue was up $1.6 million or 10% due to the
acquisition of SSR/PCE, offset to some degree by significant first quarter 1996
Coiled Tubing sales in Russia.
Pipeline and Other Industrial Services revenue was $12.1 million for the first
three months of 1997, representing an increase of $5.0 million or 70% over the
same period of 1996. The increase was due to greater revenue from the Company's
pipeline inspections operations as a result of large contracts in Mexico and
Argentina. In addition, the Company completed the acquisition of Vetco Pipeline
Services, Inc. in September 1996.
GROSS PROFIT. Gross profit was approximately $31.8 million (30% of revenue) for
the first quarter of 1997 compared to $11.7 million (25% of revenue) for the
first quarter of 1996. The 1996 and 1997 acquisitions accounted for the majority
of the increase in gross profit. The improvement in gross profit percent was due
to greater revenue from high profit margin product lines, including Pipeline,
Coating, and Solids Control, and lower fixed costs due to the consolidation of
several worldwide operating locations.
SELLING, GENERAL AND ADMINISTRATIVE COSTS. Selling, general, and administrative
costs were $11.2 million for the first quarter of 1997, an increase of $6.2
million over the same period of 1996. The increase was due to the eight
acquisitions made in 1997 and 1996. Compared to the fourth quarter of 1996, the
first quarter 1997 selling, general and administrative costs was up $0.3 million
(3%) due mainly to overhead costs associated with the operation of FGS.
RESEARCH AND ENGINEERING COSTS. Research and engineering costs were $2.5 million
in the first three months of 1997 compared to $0.8 million in 1996. The increase
was due primarily to research and engineering costs associated with the Drexel
operations and the other acquisitions completed in 1996 and 1997. The major
portion of costs currently incurred is related to Solids Control innovations
associated with screens and shakers, the Company's Tru Res "High Resolution"
pipeline tools, and continuing engineering efforts related to Coiled Tubing
products.
6
<PAGE>
WRITE-OFF OF LONG-TERM ASSETS. The first quarter 1996 write-off of long-term
assets of $63.1 million included a writedown of approximately $50.8 million
associated with the Company's adoption of SFAS No. 121 Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of and
a decision by management to sell certain assets, primarily as a result of the
Drexel Merger, which resulted in additional write-downs of approximately of
$12.3 million. There were no similar write-offs in the first quarter of 1997.
OPERATING PROFIT. Operating profit was $18.2 million in the first quarter of
1997 compared to an operating loss of $57.2 million in the first quarter of
1996. Excluding the write-off of long-lived assets, operating profit would have
been $5.8 million in the first quarter of 1996. The improvement in operating
profit was due mainly to the 1996 and 1997 acquisitions. In addition, operating
profit was up due to stronger Pipeline and Coating operations in the first
quarter of 1997 compared to the same period of 1996. Operating profit for the
fourth quarter of 1996 (excluding the write-off of assets) was $17.9 million.
The improvement over fourth quarter results was due primarily to greater
operating profit from Solids Control and Pipeline operations.
INTEREST EXPENSE. Interest expense was $3.5 million for the first quarter of
1997 compared to $2.6 million in the first quarter of 1996. The increase in
interest expense was due to an increase in debt as a result of the 1996 and 1997
acquisitions, offset to some degree by lower effective interest rates on the
outstanding debt balance as a result of the Company's retirement of its $75
million 10 3/4% Senior Subordinated Notes with proceeds from its Senior Term
Loan Facility during the fourth quarter of 1996.
OTHER EXPENSE (INCOME). Other expense (income), which includes interest income,
foreign exchange, and other expenses (net), resulted in a net expense of $0.6
million in the first three months of 1997 compared to a net expense of $0.3
million in the first quarter of 1996. Net other expense increased slightly as a
result of foreign exchange losses due to a weaker pound sterling compared to the
U.S. dollar.
PROVISION FOR INCOME TAXES. The effective tax rate for the first quarter of 1997
was 39%. The Company's effective tax rate is higher than the domestic rate of
35% due to charges not allowable under domestic and foreign jurisdictions
related to goodwill amortization and foreign earnings subject to tax at rates
differing from the domestic rate.
NET INCOME. The first quarter 1997 net income was $8.6 million compared to the
first quarter 1996 net loss of $55.6 million. The improvement is due to the
factors discussed above.
FINANCIAL CONDITION AND LIQUIDITY
- ---------------------------------
For the three months ended March 31, 1997, the Company provided $5.2 million of
cash from operations compared to $4.8 million in the same period of 1996. Cash
was used in operations during the first three months of 1997 principally as a
result of a $12.7 million increase in accounts receivable, a $3.3 million
increase in inventory, and a $3.6 million increase in prepaid expenses. These
increases in current assets were all net of the effect of the FGS acquisition.
The increase in accounts receivable was primarily the result of greater revenue
in Latin America operations and overall higher days sales outstanding at March
31, 1997 compared to December 31, 1996. Inventory increased as a result of
stronger manufacturing operations in several product lines. Prepaid expenses
were up due to an increase in on-going jobs associated with the Pipeline
operations. Offsetting these decreases in operating cash flow to an extent was
an increase in accounts payable and accrued liabilities of $8.9 million
primarily associated with increases in accrued insurance, accrued interest, and
trade accounts payable.
For the three months ended March 31, 1997, the Company used $3.6 million of cash
from financing activities compared to a usage of $3.5 million in 1996. Capital
spending of $4.9 million was principally related to the Company's Solids Control
operations, and concentrated in the high growth Latin American regions.
For the three months ended March 31, 1997, the Company used $1.5 million for
financing activities. Net payments on outstanding debt of $3.3 million
represented the source of the cash outflow offset to some extent by proceeds
from the sale of common stock of $1.7 million.
Current and long-term debt was $186.7 million at March 31, 1997, an increase of
$2.0 million from the $184.7 million outstanding at December 31, 1996. Debt
assumed in the acquisition of FGS of $5.2 million accounted for the increase,
offset to some degree by debt retired with cash flow from operations. The
Company's outstanding debt at March 31, 1997 consisted of $130.0 million of term
loans due under the Company's Senior Credit Agreement, $30.0 million due under
the Company's $100 million revolving credit facility, $5.2 million assumed in
the acquisition of FGS, $5.0 million of convertible notes related to the
acquisition of Gauthier Brothers, $3.0 million due under the Company's swingline
facility, $2.4 million related to the acquisition of SSR/PCE, and other debt of
$11.1 million.
At March 31, 1997, the Company had outstanding letters of credit amounting to
approximately $4.3 million. The available facility on the Company's $100 million
revolving credit facility and $5 million swingline facility was $66.7 million
and $1.0 million, respectively, at March 31, 1997.
7
<PAGE>
In 1997, the Financial Accounting Standards Board issued SFAS No. 128 "Earnings
Per Common Share." This statement requires earnings per common share be reported
for basic earnings per share and dilutive earnings per share. The statement is
effective for periods ending after December 15, 1997. The Company's basic and
dilutive earnings per share for the three months ending March 31, 1997
calculated under SFAS No. 128 is $0.20 and $0.19 per share, respectively.
FORWARD LOOKING STATEMENTS
- --------------------------
This Quarterly Report on Form 10-Q contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. The forward looking statements are those that
do not state historical facts and are inherently subject to risk and
uncertainties. The forward-looking statements contained herein are based on
current expectations and entail various risks and uncertainties that could cause
actual results to differ materially from those projected in the forward-looking
statements. Such risks and uncertainties include, among others, the cyclical
nature of the oilfield services industry, risks associated with the Company's
significant foreign operations, compliance with environmental laws, risks
associated with growth through the acquisitions and other factors discussed in
the Company's Annual Report on Form 10-K for the year ended December 31, 1996
under the caption "Factors Affecting Future Operating Results."
8
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and reports on Form 8-K
(a) Exhibits -- Reference is hereby made to the Exhibit Index
commencing on page 14.
(b) A Report on Form 8-K was filed on March 19, 1997 regarding the
acquisition of Fiber Glass Systems, Inc. ("FGS"), which report
was amended by Amendment No. 1 on Form 8-K/A filed on May 7, 1997.
9
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TUBOSCOPE VETCO
INTERNATIONAL CORPORATION
----------------------------------------
(Registrant)
Date: May 13, 1997 /s/ Joseph C. Winkler
-----------------------------------------
Joseph C. Winkler
Executive Vice President, Chief Financial
Officer and Treasurer (Duly Authorized
Officer, Principal Financial and
Accounting Officer)
10
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<TABLE>
<CAPTION>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION NOTE NO.
- ----------- ----------- --------
<C> <S> <C>
2(a) Agreement and Plan of Merger, dated as of January 3, 1996, among (Note 12)
Tuboscope Vetco International Corporation, Grow Acquisition Limited and
D.O.S. Ltd.
2(b) Share Purchase Agreement dated as of May 31, 1996 between TVI Wadeco (Note 15)
Inc., J & S Hokanson Investments Ltd., John Hokanson, Douglass Bell,
Robert Russell, Richard Rutherford and Wadeco Oilfield Services Ltd.
2(c) Stock Purchase and Sale Agreement dated as of September 6, 1996 by and (Note 16)
among Tuboscope Pipeline Services, Inc., Vetco Pipeline Services, Inc.,
Rauma USA, Inc. and Rauma Corporation
2(d) Addendum No. 1 to Stock Purchase and Sale Agreement dated as of (Note 16)
September 20, 1996 by and among Tuboscope Pipeline Services, Inc., Vetco
Pipeline Services, Inc., Rauma USA, Inc. and Rauma Corporation
2(e) Addendum No. 2 to Stock Purchase and Sale Agreement dated as of (Note 16)
September 20, 1996 by and among Tuboscope Pipeline Services, Inc., Vetco
Pipeline Services, Inc., Rauma USA, Inc. and Rauma Corporation
3(a) Restated Certificate of Incorporation, dated March 12, 1990. (Note 7)
3(b) Amended and Restated Bylaws. (Note 2)
3(c) Certificate of Designation of Series A Convertible Preferred Stock, (Note 3)
dated October 22, 1991.
3(d) Certificate of Amendment to Restated Certificate of Incorporation dated (Note 10)
May 12, 1992.
3(e) Certificate of Amendment to Restated Certificate of Incorporation dated (Note 11)
May 10, 1994.
4(a) Stockholders' Agreement, dated May 13, 1988, between the Company, (Note 1)
Brentwood, Hub, the Management Investors, the Other Investors, and the
Institutional Investors, including the Common Stock Registration Rights
Agreement attached thereto as Exhibit A.
4(b) Indenture (including the form of Note), dated as of April 1, 1993, among (Note 4)
Tuboscope Vetco International Inc., the Company and Norwest Bank
Minnesota, National Association, as Trustee, regarding the 10 3/4% Senior
Subordinated Notes due 2003 of Tuboscope Vetco International Inc.
4(c) Supplemental Indenture dated as of December 18, 1996, among Tuboscope (Note 19)
Vetco International Inc., the Company and Norwest Bank Minnesota,
National Association, as Trustee, regarding the 10 3/4% Senior Subordinated
Notes due 2003 of Tuboscope Vetco International Inc.
4(d) Various documentation relating to $1,000,000 Alaska
Industrial Revenue Bond financing. (Not filed herewith
pursuant to Item 601(b)(4)(iii) of Regulation S-K. The
Company hereby agrees to furnish copies of relevant
documentation to the Securities and Exchange Commission
upon request).
</TABLE>
11
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<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION NOTE NO.
- ----------- ----------- --------
<C> <S> <C>
4(e) Various documentation relating to $1,000,000 Wyoming
Industrial Revenue Bond financing. (Not filed herewith
pursuant to Item 601(b)(4)(iii) of Regulation S-K. The
Company hereby agrees to furnish copies of relevant
documentation to the Securities and Exchange Commission
upon request).
4(f) Various promissory notes in the aggregate principal
amount of $4,000,000 relating to the acquisition of
Sound Optics Systems, Inc., dba South Optical Systems,
Inc. (Not filed herewith pursuant to Item 601(b)(4)(iii)
of Regulation S-K. The Company hereby agrees to furnish
copies of the relevant documentation to the Securities
and Exchange Commission upon request).
4(g) Secured Credit Agreement, dated August 2, 1996, between Tuboscope Vetco (Note 14)
International Inc., and Drexel Holdings, Inc., and The Chase Manhattan
Bank, N.A., ABN Amro Bank N.V., Houston Agency, and the other Lenders
Party Hereto, and ABN Amro Bank N.V., Houston Agency as Administrative
Agent.
10(a) Savings Investment Plan, dated May 13, 1988, as amended by (Note 1)
First Amendment to Savings Investment Plan.
10(b) Second, Third and Fourth Amendments to Savings Investment Plan. (Note 4)
10(c) Fifth, Sixth and Seventh Amendments to Savings Investment Plan. (Note 8)
10(d) Supplementary Agreement Fixed Rental Scheme, dated May 19, 1989, between (Note 1)
Jurong Town Corporation and AMF Far East Pte. Ltd.
10(e) Description of Life Insurance Plan. (Note 1)
10(f) Amended and Restated Stock Option Plan for Key Employees of Tuboscope (Note 5)
Vetco International Corporation.
10(g) Form of Revised Incentive Stock Option Agreement. (Note 5)
10(h) Form of Revised Non-Qualified Stock Option Agreement. (Note 5)
10(i) Stock Option Plan for Non-Employee Directors of Tuboscope Vetco (Note 6)
International Corporation.
10(j) Amendment to Stock Option Plan for Non-Employee Directors of Tuboscope (Note 6)
Vetco International Corporation.
10(k) Form of Non-Qualified Stock Option Agreement. (Note 6)
10(l) Employee Qualified Stock Purchase Plan. (Note 8)
10(m) Purchase Agreement, dated as of September 30, 1991, between the Company (Note 3)
and BHI relating to the Vetco Services Acquisition.
10(o) Technology Transfer Agreement, dated as of October 29, 1991, between (Note 3)
Tuboscope Inc. and BHI.
10(p) Lease Agreement with respect to Celle, Germany facility. (Note 3)
10(q) Building Agreement for Land at Jurong, dated May 5, 1983, between Jurong (Note 3)
Town Corporation and Vetco International, Inc.
10(r) Lease between J.G.B. Properties Limited and Vetco Inspection GmbH. (Note 3)
10(s) Eighth and Ninth Amendment to Savings Investment Plan. (Note 9)
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION NOTE NO.
- ----------- ----------- --------
<C> <S> <C>
10(t) Subscription Agreement, dated as of January 3, 1996, by and between (Note 12)
Tuboscope Vetco International Corporation and SCF-III, L.P.
10(u) Exchange Agreement, dated as of January 3, 1996, among Tuboscope Vetco (Note 13)
International Corporation and Baker Hughes Incorporated.
10(v) Voting Agreement, dated as of January 3, 1996, among Tuboscope Vetco (Note 12)
International Corporation, D.O.S. Ltd., D.O.S. Partners, L.P., Panmell
(Holdings), Ltd. And Zink Industries Limited.
10(w) Voting Agreement, dated as of January 3, 1996, among D.O.S. Ltd., (Note 12)
Brentwood Associates IV, L.P. and Baker Hughes Incorporated.
10(x) Form of Amended and Restated Executive Agreement. (Note 13)
10(y) Master Lease Agreement, dated December 18, 1995, between the Company and (Note 13)
Heller Financial Leasing, Inc.
10(z) 1996 Equity Participation Plan. (Note 17)
10(aa) D.O.S. Ltd. 1993 Stock Option Plan. (Note 18)
10(bb) Agreement and Plan of Merger dated as of March 7, 1997 by and among (Note 20)
Tuboscope Vetco International Corporation, FGS Acquisition Corp. and
Fiber Glass Systems Inc.
27 Financial Data. Exhibit 27
</TABLE>
- ----------------------------
Note 1 Previously filed by the Registrant in Registration No. 33-31102 and
incorporated by reference herein pursuant to Rule 12b-32 of the
Exchange Act.
Note 2 Previously filed by the Registrant in Registration No. 33-33248 and
incorporated by reference herein pursuant to Rule 12b-32 of the
Exchange Act.
Note 3 Previously filed by the Registrant in File No. 33-43525 and
incorporated by reference herein pursuant to Rule 12b-32 of the
Exchange Act.
Note 4 Previously filed by the Registrant in Registration No. 33-56182 and
incorporated by reference herein pursuant to Rule 12b-32 of the
Exchange Act.
Note 5 Previously filed by the Registrant in Registration No. 33-72150 and
incorporated by reference herein pursuant to Rule 12b-32 of the
Exchange Act.
Note 6 Previously filed by the Registrant in Registration No. 33-72072 and
incorporated by reference herein pursuant to Rule 12b-32 of the
Exchange Act.
Note 7 Previously filed in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1990 and incorporated by reference
herein pursuant to Rule 12b-32 of the Exchange Act.
Note 8 Previously filed in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1993 and incorporated by reference
herein pursuant to Rule 12b-32 of the Exchange Act.
Note 9 Previously filed in the Quarterly Report on Form 10-Q for the quarter
ended June 30, 1994 and incorporated by reference herein pursuant to
Rule 12b-32 of the Exchange Act.
Note 10 Previously filed in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1992 and incorporated by reference
herein pursuant to Rule 12b-32 of the Exchange Act.
13
<PAGE>
Note 11 Previously filed in the Company's Proxy Statement for the 1994 Annual
Meeting of Stockholders and incorporated by reference herein pursuant
to Rule 12b-32 of the Exchange Act.
Note 12 Previously filed in the Company's Current Report on Form 8-K filed
on January 16, 1996 and incorporated by reference herein pursuant to
Rule 12b-32 of the Exchange Act.
Note 13 Previously filed in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995 and incorporated by reference
herein pursuant to Rule 12b-32 of the Exchange Act.
Note 14 Previously filed in the Company's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1996 and incorporated by reference herein
pursuant to Rule 12b-32 of the Exchange Act.
Note 15 Previously filed in the Company's Current Report on Form 8-K filed
on June 14, 1996, as amended by Amendment No. 1 on Form 8-K/A filed on
August 2, 1996, and incorporated by reference herein pursuant to Rule
12b-32 of the Exchange Act.
Note 16 Previously filed in the Company's Current Report on Form 8-K filed
on October 7, 1996, as amended by Amendment No. 1 filed on November 12,
1996, and incorporated by reference herein pursuant to Rule 12b-32 of
the Exchange Act.
Note 17 Previously filed by the Company in Registration No. 333-05233 and
incorporated by reference herein pursuant to Rule 12b-32 of the
Exchange Act.
Note 18 Previously filed by the Company in Registration No. 333-05237 and
incorporated by reference herein pursuant to Rule 12b-32 of the
Exchange Act.
Note 19 Previously filed in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1996 and incorporated by reference
herein pursuant to rule 12b-32 of the Exchange Act.
Note 20 Previously filed in the Company's current report on Form 8-K filed on
March 19, 1997, as amended by Amendment No. 1 filed on May 7, 1997, and
incorporated by reference herein pursuant to Rule 12b-32 of the
Exchange Act.
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
EXTRACTED FROM FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 10,458
<SECURITIES> 0
<RECEIVABLES> 111,673
<ALLOWANCES> 2,394
<INVENTORY> 52,137
<CURRENT-ASSETS> 190,770
<PP&E> 245,671
<DEPRECIATION> 63,077
<TOTAL-ASSETS> 562,195
<CURRENT-LIABILITIES> 120,926
<BONDS> 186,715
0
0
<COMMON> 436
<OTHER-SE> 248,014
<TOTAL-LIABILITY-AND-EQUITY> 562,195
<SALES> 32,910
<TOTAL-REVENUES> 105,501
<CGS> 20,263
<TOTAL-COSTS> 72,574
<OTHER-EXPENSES> 1,107
<LOSS-PROVISION> 12
<INTEREST-EXPENSE> 3,523
<INCOME-PRETAX> 14,096
<INCOME-TAX> 5,498
<INCOME-CONTINUING> 8,598
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,598
<EPS-PRIMARY> 0.19
<EPS-DILUTED> 0.19
</TABLE>
