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FORM 10-K/A-1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED MAY 31, 1999
OR
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
[NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM ______ TO ______
COMMISSION FILE NUMBER 1-13402
INPUT/OUTPUT, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 22-2286646
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
11104 WEST AIRPORT BLVD., STAFFORD, TEXAS 77477
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (281) 933-3339
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
COMMON STOCK, $0.01 PAR VALUE NEW YORK STOCK EXCHANGE
PREFERRED STOCK PURCHASE RIGHTS NEW YORK STOCK EXCHANGE
(TITLE OF CLASS) (NAME OF EACH EXCHANGE ON WHICH REGISTERED)
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
NONE
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes: [X] No: [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
Aggregate market value of the voting and non-voting common equity held by
non-affiliates of the registrant at June 30, 1999 (for purposes of the
below-stated amount only, all directors, officers and 5% or more stockholders
are presumed to be affiliates):
$287,235,000
Indicate the number of shares outstanding of the registrant's classes of Common
Stock, as of the latest practicable date.
TITLE OF EACH CLASS NUMBER OF SHARES OUTSTANDING
OF COMMON STOCK AT JUNE 30, 1999
--------------- ----------------
COMMON STOCK, $0.01 PAR VALUE 50,663,858
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the definitive Proxy Statement for the Registrant's 1999 Annual
Meeting of Stockholders are incorporated by reference into Part III hereof.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K:
(3) Exhibits:
23.1 - Consent of KPMG LLP
99.1 - Information, Financial Statements and Exhibits
required by Form 11-K for the Input/Output, Inc.
Employee Stock Purchase Plan
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SIGNATURES
The undersigned registrant hereby amends the following items, financial
statements and exhibits of its Annual Report for its fiscal year ended May 31,
1999 on Form 10-K as set forth in the pages attached hereto:
To file as Exhibit 99.1 the Information, Financial Statements and
Exhibits required by Form 11-K for the Input/Output, Inc. Employee Stock
Purchase Plan.
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Form 10-K/A-1 report
to be signed on its behalf by the undersigned, thereunto duly authorized in the
city of Stafford, State of Texas, on October 28, 1999.
Input/Output, Inc.
/s/ Sam K. Smith
---------------------------------
Director and
Chief Executive Officer
2
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EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
Compensation Committee of the Board of Directors
Input/Output, Inc.:
We consent to the incorporation by reference in the registration statements (No.
33-54394, No. 33-46386, No. 33-50620, No. 33-85304, No. 333-14321, No.
333-24125, No. 333-80299, and No. 333-80297) on Form S-8 of Input/Output, Inc.
of our report dated September 17, 1999, relating to the statements of net assets
available for plan benefits of the Input/Output, Inc. Employee Stock Purchase
Plan as of June 30, 1999 and 1998, and the related statements of changes in net
assets available for plan benefits for the years ended June 30, 1999 and 1998
and the period from April 1, 1997 (date operations commenced) through June 30,
1997, which report appears in the Form 10-K/A-1 of Input/Output, Inc. for the
fiscal year ended May 31, 1999.
/s/ KPMG LLP
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Houston, Texas
October 28, 1999
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EXHIBIT 99.1
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Input/Output, Inc. Employee Stock Purchase Plan
Independent Auditors' Report................................................. F-2
Statements of Net Assets Available for Plan Benefits
as of June 30, 1999 and 1998................................................. F-3
Statements of Changes in Net Assets Available for Plan Benefits for the
years ended June 30, 1999 and 1998 and for the period from April 1, 1997
(date operations commenced) through June 30, 1997............................ F-3
Notes to Financial Statements................................................ F-4
</TABLE>
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INDEPENDENT AUDITORS' REPORT
Compensation Committee of the Board of Directors
Input/Output, Inc.:
We have audited the accompanying statements of net assets available for plan
benefits of the Input/Output, Inc. Employee Stock Purchase Plan as of June
30, 1999 and 1998 and the related statements of changes in net assets
available for plan benefits for the years ended June 30, 1999 and 1998 and
for the period from April 1, 1997 (date operations commenced) through June
30, 1997. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
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 provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the
Input/Output, Inc. Employee Stock Purchase Plan as of June 30, 1999 and 1998
and the changes in net assets available for plan benefits for the years ended
June 30, 1999 and 1998 and for the period from April 1, 1997 (date operations
commenced) through June 30, 1997 in conformity with generally accepted
accounting principles.
/s/ KPMG LLP
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Houston, Texas
September 17, 1999
F-2
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INPUT/OUTPUT, INC. EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
<TABLE>
<CAPTION>
June 30,
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1999 1998
---------- ----------
ASSETS
<S> <C> <C>
Cash ................................................................... $ 347,810 $ 261,510
Investments in shares of Input/Output, Inc.
Common Stock at fair value ........................................... 1,211,807 760,968
---------- ----------
Net Assets available for plan benefits ................................. $1,559,617 $1,022,478
========== ==========
</TABLE>
INPUT/OUTPUT, INC. EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
<TABLE>
<CAPTION>
Period from
April 1, 1997*
Year Ended Year Ended through
June 30, 1999 June 30, 1998 June 30, 1997
------------- ------------- ----------------
<S> <C> <C> <C>
Additions to assets:
Employee contributions ............................... $ 1,152,387 $ 995,544 $ 250,692
Net appreciation (depreciation) in market value
of Input/Output, Inc. Common Stock ................... (140,610) 109,473 -
Net realized gain (loss) on sales and
distributions of Input/Output, Inc. Common
Stock ................................................ (12,906) 209,471 -
----------- ----------- -----------
Total additions ........................................... 998,871 1,314,488 250,692
----------- ----------- -----------
Subtractions:
Distributions to participants ........................ 461,732 542,702 -
----------- ----------- -----------
Change in net assets available for plan benefits
during the year ........................................ $ 537,139 $ 771,786 $ 250,692
=========== =========== ===========
Net Assets available for plan benefits:
At beginning of period ............................... $ 1,022,478 $ 250,692 $ -
=========== =========== ===========
At end of period ..................................... $ 1,559,617 $ 1,022,478 $ 250,692
=========== =========== ===========
</TABLE>
*date operations commenced
See accompanying notes to financial statements.
F-3
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INPUT/OUTPUT, INC. EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
(1) DESCRIPTION OF PLAN:
The following brief description of the Input/Output, Inc. Employee
Stock Purchase Plan ("the Purchase Plan") is provided for general
information purposes only. Participants should refer to the Purchase Plan
for complete information regarding the Purchase Plan's definitions,
benefits, eligibility and other matters.
(a) GENERAL
The Purchase Plan was approved by the Input/Output, Inc. (the Company)
Board of Directors in March, 1997 and commenced on April 1, 1997. The
Stockholders of the Company approved the Purchase Plan on September 29,
1997. There are 1.5 million shares of Common Stock of the Company reserved
for issuance under the Purchase Plan.
The Purchase Plan is intended to advance the long-term interests of the
Company by encouraging the acquisition and ownership of capital stock of
the Company by employees of the Company. The Purchase Plan is intended to
qualify as an "employee stock purchase plan" under Section 423 of the
Internal Revenue Code (the Code) of 1986, as amended.
(b) ELIGIBILITY
An "eligible employee" under the Purchase Plan is a person who (i) is
actively employed (ii) is actively employed on the first day of the
calendar month prior to an offering period and (iii) is not excluded
pursuant to the following sentence. The following persons shall not be
eligible: (1) employees whose customary employment is twenty (20) hours or
less per week, (2) employees who have not been employed for at least six
months prior to the beginning of an Offering Period (as defined in the
Purchase Plan), and (3) an employee who owns 5% or more of the Company's
Common Stock.
(c) CONTRIBUTIONS
The Purchase Plan allows all eligible employees to authorize payroll
deductions at the rate of 1% up to 15% of base compensation to be applied
toward the purchase of Input/Output, Inc. Common Stock. The Purchase Price
of the Common Stock will be the lesser of 85% of the closing price on the
first day of the applicable Offering Period or most recently preceding
trading day or 85% of the closing price on the last day of the Offering
Period or most recently preceding trading day. Under the Purchase Plan,
separate six-month offering periods commence on April 1st and October 1st
of each year.
F-4
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INPUT/OUTPUT, INC. EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(d) PARTICIPANT ACCOUNTS
A Purchase Plan account in the name of each participant will be
maintained. On each pay day a participant's payroll deduction shall be
withheld and credited to such account. As of the last day of the Offering
Period the amount then in the participant's account shall be applied to the
purchase of the Company's Common Stock. The purchase of stock will be made
solely from amounts credited to the participant's plan account. The total
number of employees participating in the purchase plan as of June 30, 1999,
1998 and 1997 was 428, 401 and 378, respectively.
(e) DISTRIBUTIONS
A participant may request in writing the sale of all or part of the
shares of Common Stock in such participant's plan account. The shares will be
sold within five business days, and the Purchase Plan will deliver to the
participant the proceeds of the sale, less a handling charge, brokerage
commissions, and other costs of sale.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Plan are presented on the accrual
basis of accounting.
Investments in Company Common Stock are reported at fair value
determined by reference to quoted market prices. Net realized gains and
losses on disposition of investments are reported on the revalued cost
method. Revalued cost is the fair value of the assets at the beginning of the
Plan year or historical cost if the investment was acquired since the
beginning of the year. Any unrealized appreciation or depreciation is
recognized as a gain or loss currently in the statement of changes in net
assets available for benefits.
(3) FEDERAL INCOME TAXES
The Purchase Plan and the right of participants to make purchases
thereunder are intended to qualify under the provisions of Section 423 of the
Code. Under those provisions, no income will be taxable to a participant at
the time of the grant of the option or purchase of shares for federal income
tax purposes. However, a participant may become liable for tax upon
dispositions of shares acquired, and the tax consequences will depend on how
long a participant has held the shares prior to disposition.
F-5
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INPUT/OUTPUT, INC. EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(4) ADMINISTRATION OF PLAN ASSETS
The Purchase Plan's investment in shares of Input/Output, Inc.
Common Stock are held in safekeeping as designated by Harris Trust, Inc.
("Registrar"). Cash contributions to the Purchase Plan are held by the
Company prior to the investment in Input/Output, Inc. Common Stock. Certain
administrative functions are performed by officers or employees of the
Company or Registrar. No such officers or employees receive compensation from
the Purchase Plan. All administrative expenses of the Purchase Plan are borne
by the Company.
(5) PLAN TERMINATION
The Purchase Plan will terminate (a) on the date all shares
authorized for sale under the Purchase Plan have been purchased or (b) at any
time, at the discretion of the Board of Directors of the Company; provided
however, that no termination shall affect outstanding offerings of shares.
Upon termination of the Purchase Plan and the exercise or lapse of
all Offering rights thereunder all remaining amounts credited to the Purchase
Plan accounts of participants shall be returned to such participants in cash
without interest. At this time, there is no intention to terminate the
Purchase Plan.
(6) INVESTMENTS
The investments, at June 30, 1999 and 1998, are presented in the
following table:
<TABLE>
<CAPTION>
June 30,
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1999 1998
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<S> <C> <C>
Shares of Input/Output, Inc. Common Stock
Number of shares....................................................... 160,239 42,721
========== ========
Average cost........................................................... $1,352,417 $651,495
========== ========
Market................................................................. $1,211,807 $760,968
========== ========
</TABLE>
F-6
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INPUT/OUTPUT, INC. EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(7) YEAR 2000 (UNAUDITED)
The Purchase Plan could be adversely affected if the computer
systems and those of service providers used by the Purchase Plan do not
properly process and calculate date related information from and after
January 1, 2000. This is commonly known as the "Year 2000 Issue." The Company
is taking steps that it believes are reasonably designed to address the Year
2000 Issue with respect to its computer systems and is obtaining satisfactory
assurances that comparable steps are being taken by each of the Purchase
Plan's major service providers. At this time, however, there can be no
assurance that these steps will be sufficient to avoid any material adverse
effect on the Purchase Plan's activities and, accordingly, its net assets
available for plan benefits and changes therein.
F-7
