<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
____________________________________________________
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE EXCHANGE ACT OF 1934
Commission file number 1-19971
_________________________________________
UNIVERSAL SEISMIC ASSOCIATES, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 76-0256086
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
16420 Park Ten Place, Suite 300
Houston, Texas 77084-5051
(Address of principal executive offices)
(281) 578-8081
(Issuer's telephone number)
_________________________________________
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 [ ]
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 5,229,109 shares of Common
Stock, $.0001 par value, were outstanding as of February 20, 1997.
Transitional Small Business Disclosure Format (Check one):
Yes [ ] No [X]
PAGE 1 OF 13
<PAGE>
PART I
FINANCIAL INFORMATION
UNIVERSAL SEISMIC ASSOCIATES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
December 31, June 30,
1996 1996
----------- -----------
ASSETS (restated)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,355,780 $ 982,431
Trade accounts receivable, net 6,277,168 7,999,364
Accounts receivable - employees 47,198 47,597
Costs in excess of billings and estimated earnings on uncompleted contracts 1,071,473 1,733,525
Prepaid expenses and other current assets 516,188 626,254
----------- -----------
Total current assets 9,267,807 11,389,171
Property and equipment:
Seismic property and equipment, net 17,243,914 17,953,678
Unevaluated oil and gas properties 5,281,241 1,722,847
----------- -----------
Total property and equipment, net 22,525,155 19,676,525
Other assets:
Deferred financing costs, net 187,947 217,945
Receivable from stockholder - 28,440
Other 171,446 181,227
Goodwill, net 627,116 652,538
----------- -----------
Total assets $32,779,471 $32,145,846
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable, current $ 3,431,463 $ 5,473,870
Billings and estimated earnings in excess of costs on uncompleted contracts 136,401 2,185,926
Accounts payable 8,315,170 5,578,646
Other current liabilities 797,450 1,137,890
----------- -----------
Total current liabilities 12,680,484 14,376,332
Notes payable, net of current maturities 8,713,273 9,870,689
----------- -----------
Total liabilities 21,393,757 24,247,021
----------- -----------
Commitments and contingencies
Stockholders' equity:
Common stock, $.0001 par value; 20,000,000 shares authorized; 5,234,109
shares issued at December 31, 1996 and 4,283,147 shares at June 30, 1996 523 428
Additional paid in capital 17,092,944 13,553,317
Accumulated deficit (5,687,753) (5,634,920)
Less: Treasury stock, at cost; 5,000 shares (20,000) (20,000)
----------- -----------
Total stockholders' equity 11,385,714 7,898,825
----------- -----------
Total liabilities and stockholders' equity $32,779,471 $32,145,846
=========== ===========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
PAGE 2 OF 13
<PAGE>
PART I
FINANCIAL INFORMATION
UNIVERSAL SEISMIC ASSOCIATES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended December 31, Six months ended December 31,
------------------------------- -----------------------------
1996 1995 1996 1995
----------- ----------- ----------- -----------
(restated) (restated)
<S> <C> <C> <C> <C>
Operating revenues:
Data acquisition revenues 10,198,857 3,134,302 17,191,880 7,759,406
Data processing revenues 376,297 251,745 790,878 483,790
----------- ----------- ----------- -----------
Total operating revenues 10,575,154 3,386,047 17,982,758 8,243,196
Operating expenses:
Cost of data acquisition 7,733,785 3,069,344 14,581,566 6,494,425
Cost of data processing 231,616 219,383 423,975 437,459
Selling, general and administrative expenses 506,279 537,944 1,059,325 987,113
Expenses relating to proposed merger 301,230 0.00 301,230 0.00
Depreciation and amortization 774,721 531,155 1,535,726 1,045,205
----------- ----------- ----------- -----------
Total operating expenses 9,547,631 4,357,826 17,901,822 8,964,202
Gain on sale of oil and gas properties - - 559,461 -
----------- ----------- ----------- -----------
Total operating income 1,027,523 (971,779) 640,397 (721,006)
Interest expense (331,875) (259,781) (698,127) (482,087)
Other income, net 2,593 4,859 4,897 13,645
----------- ----------- ----------- -----------
Net Income (loss) $ 698,241 $(1,226,701) $ (52,833) $(1,189,448)
=========== =========== =========== ===========
Earnings (loss) per share
Primary $ 0.13 $ (0.29) $ (0.01) $ (0.28)
Weighted average common shares and
common share equivalents outstanding
Primary 5,400,250 4,202,498 5,100,303 4,202,498
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
PAGE 3 OF 13
<PAGE>
PART I
FINANCIAL INFORMATION
UNIVERSAL SEISMIC ASSOCIATES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended December 31,
-----------------------------------
1996 1995
------------ ------------
(restated)
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (52,833) $ (1,189,448)
Adjustments to reconcile net income (loss) to net
cash provided (used) by operating activities:
Depreciation and amortization 1,581,327 1,120,288
Gain on disposal of assets (559,461) (1,354)
Changes in operating assets and liabilities:
Accounts receivable 2,247,595 (2,906,499)
Costs in excess of billings 662,053 (936,332)
Other current assets 119,845 114,260
Accounts payable 2,736,524 422,598
Billings and estimated earnings in excess of costs (2,049,525) 2,951,106
Other liabilities (339,467) (150,393)
Other - (70,755)
----------- ------------
Net cash provided by operating activities 4,346,058 (646,529)
----------- ------------
Cash flows from investing activities:
Capital expenditures (5,005,098) (692,739)
Proceeds from sale of assets 680,625 12,233
----------- ------------
Net cash (used) in investing activities (4,324,473) (680,506)
----------- ------------
Cash flows from financing activities:
Proceeds from notes payable 16,937,761 10,052,006
Payments on notes payable (16,210,019) (8,020,854)
Payments on long term debt (443,168) (1,224,664)
Payments on capital leases - (208,128)
Proceeds from issuance of common stock, net 38,750 -
Proceeds from receivable from Sierra Mgmnt, Inc. 28,440 24,000
Payment of financing costs - (119,000)
----------- ------------
Net cash provided by financing activities 351,764 503,360
----------- ------------
Net increase in cash and cash equivalents 373,349 (823,675)
Cash and cash equivalents at beginning of period 982,431 1,208,357
----------- ------------
Cash and cash equivalents at end of period $ 1,355,780 $ 384,682
=========== ============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
PAGE 4 OF 13
</TABLE>
<PAGE>
UNIVERSAL SEISMIC ASSOCIATES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. The consolidated condensed financial statements of Universal Seismic
Associates, Inc. and subsidiaries (the "Company") have been prepared by the
Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although the Company believes that
the disclosures are adequate to make the information presented not
misleading. These condensed financial statements should be read in
conjunction with the financial statements and the notes thereto included in
the Company's latest Annual Report to Shareholders and the Annual Report to
the Securities and Exchange Commission on form 10-KSB for the year ended June
30, 1996. In the opinion of the Company, all adjustments, consisting only of
normal recurring adjustments, necessary to present fairly the financial
position as of December 31, 1996, the results of operations for the three
months and six months ended December 31, 1995 and 1996, and statements of
cash flows for the six months then ended have been included.
2. The Company has restated its financial statements as of and for the three
month periods ended September 30, 1996 and December 31, 1996. This action was
taken as a result of an internal review by the Audit Committee of the
Company's Board of Directors, which had been commenced in February 1997 in
response to allegations made by a stockholder who is pursuing litigation
against the Company. The review identified that certain seismic acquisition
start-up costs had been deferred to be amortized over subsequent periods.
Some companies within the seismic industry utilize an accounting policy which
defers and amortizes crew start-up costs, the Company's independent
accountants advised that the historical policy of expensing start-up costs as
incurred is the preferable method of accounting for such costs. Additionally,
it was determined that the Company mistakenly recognized revenue related to a
project involving its wholly owned subsidiary UNEXCO, Inc. ("UNEXCO") when
such revenues should have offset the full cost pool. Accordingly, the
previously reported financial results for the three month periods ended
September 30, 1996 and December 31, 1996 have been restated. Previously
reported results of operations were overstated by $865,447 for the three
months ended September 30, 1996 and understated by $162,537 for the three
months ended December 31, 1996.
3. The foregoing interim results are not necessarily indicative of the results
of operations for the full fiscal year ending June 30, 1997.
PAGE 5 OF 13
<PAGE>
4. On September 30, 1996, UNEXCO sold its 16.5% working
interest in the Bowie Lumber leases (the "Leases") within the Lake Boeuf
Prospect 3D seismic survey (the "Prospect") in Lafourche Parish, Louisiana
for $680,625 to National Energy Group, Inc. Previously, UNEXCO had purchased
such interest in the Leases from Araxas Exploration, Inc. ("Araxas") in
connection with entering into an agreement with Araxas for the Company to
provide 3-D acquisition and processing services on the Prospect in return for
a 37.5% working interest in the Prospect. It was subsequently determined by
an independent engineering firm that the Leases contained proven undeveloped
reserves. This asset sale by UNEXCO of its interest in the above referenced
Leases represents approximately 4% of the total acreage encompassing the
Prospect. UNEXCO continues to be a 37.5% working interest partner in the
Prospect's remaining approximate 14,000 acres.
5. On November 13, 1996, the Company announced the termination of negotiations
with respect to the previously announced proposed combination with
SUELOPETROL. The companies could not resolve various material business and
due diligence issues. The Company has incurred expenses of $301,230 related
to this proposed merger.
6. On December 20, 1996 the Company entered into a Note Purchase Agreement with
four limited partnerships (the "Partnerships") of which Resource Investors
Management Company ("RIMCO") is the sole general partner, pursuant to which
the Company executed four 12% Senior Secured Exchangeable General Obligation
Notes in the aggregate principal amount of $4,000,000, the proceeds of which
are to be funded through June 30, 1998, to be utilized to finance its current
and future UNEXCO exploration and production activities. The notes have a
three year maturity and will function as a revolving credit line with monthly
payments of interest only. Any net proceeds generated from the sale of oil
and gas prospects, properties, and production will be utilized to pay down
the facility and create additional borrowing availability.
7. On May 28, 1996 the Company entered into a Note Purchase Agreement with three
Partnerships of which RIMCO is the sole general partner. Pursuant to which
the Company executed three 10% Senior Secured General Obligation Notes in the
aggregate principal amount of $6,500,000. The notes required monthly
installments of interest only through November 1, 1996 and commencing
December 1, 1996, monthly installments of $138,106, including interest
through November 1, 1999 with the unpaid principal balance due December 1,
1999. RIMCO has deferred principal payments on this note agreement for a
period of seven months, allowing monthly installments of interest only to
continue through July 1, 1997.
8. The Company's agreements with RIMCO require that it will not permit its
Current Assets (as defined in the applicable credit agreements) at any time
on or after September 30, 1996 to be less than the sum of (i) its Current
Liabilities (as defined in the applicable credit agreements) as at such date,
minus, (ii) any portion of such Current Liabilities consisting of amounts
borrowed under its credit facility with Fidelity Funding, Inc. that are not
due within one year of such date. At December 31, 1996 the Company was not in
compliance with this requirement. RIMCO has waived this financial covenant.
9. On January 13, 1997, Michael T. Kanarellis and Robert L. Kecseg, who have
collectively styled themselves as the "Universal Seismic Associates, Inc.
Shareholders Protective Committee" (the "Committee") filed suit in the United
States District Court for the District of Delaware (the "Delaware Court");
The suit sought to enjoin the January 28, 1997 annual meeting of the
Company's shareholders (the "Annual Meeting") for 30 days, to declare the
proxies and consents submitted to the Company to be invalid and to declare
the Company to have violated the proxy rules and Delaware law; requiring
corrective disclosure. The Delaware Court ordered that the Company hold the
polls open for 14 days after the Annual Meeting adjourned (until February 11,
1997).
The suit has not been dismissed by the plaintiffs. However, all relief
requested in their Complaint related specifically to the timing and conduct
of the Annual Meeting, which was concluded on February 11, 1997 with the
reelection of management's slate of incumbent directors and the defeat of all
of the Committee's proposals. Mr. Kanarellis threatened further litigation at
the annual shareholders' meeting held on February 11, 1997. The Company and
its directors were subsequently sued by Mr. Kanarellis. Litigation is
ongoing.
PAGE 6 OF 13
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
SIX MONTHS ENDED DECEMBER 31, 1996 VS. SIX MONTHS ENDED DECEMBER 31, 1995
OPERATING REVENUE AND COSTS
Operating Revenues. Operating revenues, totaling $17,982,758, for the six
month period in 1996, represent an increase of approximately 118% over revenues
of $8,243,196 for the same six month period ending December 31, 1995. Data
acquisition revenues for the six month period in 1996, increased by
approximately 122%, to $17,191,880. This increase reflects six months of
operation of the Company's fifth and sixth 3D data acquisition crews placed in
service in mid-December 1995 and late May 1996, respectively. Data processing
revenues for the six months ended December 31, 1996, totaling $790,878 represent
an increase of approximately 63% over revenues of $483,790 for the six month
period ending December 31, 1995. The increase marks the Company's success in
obtaining a greater volume of seismic data processing projects.
Operating Expenses. Operating expenses of $17,901,822 for the six month
period ended December 31, 1996, represent an increase of approximately 100% over
operating expenses of $8,964,202 in 1995. Direct costs of seismic acquisition
increased by approximately 125%, from $6,494,425 for the six month period ending
December 31, 1995, to $14,581,566 for the same period ending December 31, 1996.
This increase is attributable to six months of the Company's expanded crew
operations. Direct costs of data processing decreased slightly for the six
month period, from $ 437,459 in 1995, to $423,975 in 1996.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses ("SG&A") increased approximately 7%, for the comparable
six month periods, from $987,113 in 1995 to $1,059,325 in 1996. The slight
increase is attributable to expanded marketing efforts, related to data
acquisition, that concluded in the quarterly period ending September 30, 1996.
Expenses Relating to Proposed Merger. The Company incurred $301,230 in
expenses relating to the proposed Suelopetrol merger during the current period.
(See Note 5 to Consolidated Condensed Financial Statements)
Depreciation and amortization. Depreciation and amortization increased by
approximately 47% from $1,045,205 in 1995 to $1,535,726 in 1996, due to
equipment additions, made during fiscal year 1996, for both additional seismic
crews and processing equipment for Universal Seismic Technologies, Inc. ("UST").
Interest Expense. Interest expense increased approximately 45%, from
$482,087 for the six months ended December 31, 1995, to $698,127 for the same
period ended December 31, 1996, because of equipment financing required for the
addition of the Company's sixth 3D data acquisition crew.
PAGE 7 OF 13
<PAGE>
Net Loss. The Company reported a net loss of $52,833 for the six month
period ended December 31, 1996 as compared to a net loss of $1,189,448 for the
same prior year period. The net loss for the six month ended December 31, 1996
includes a $559,461 gain on a sale of a leaseholds interest by UNEXCO. (See Note
4 to Consolidated Condensed Financial Statements) The net loss of $52,833
included expenses totaling $301,230 relating to the proposed merger. (See Note 5
to Consolidated Condensed Financial Statements) The Company's reduced net loss
in the current six month period reflects improved operating production attained
by the Company's data acquisition crews.
THREE MONTHS ENDED DECEMBER 31, 1996 VS. THREE MONTHS ENDED DECEMBER 31, 1995
OPERATING REVENUE AND COSTS
Operating Revenues. Operating revenues, totaling $10,575,154, for the
three month period in 1996, represent an increase of approximately 212% over
revenues of $3,386,047 for the same three month period ending December 31, 1995.
Data acquisition revenues for the three month period in 1996, increased by
approximately 225%, to $10,198,857. This increase is primarily due to the
Company's improved level of production in the acquisition of 3D data from its
expanded crew operations. Data processing revenues for the three months ended
December 31, 1996, totaling $376,297 represent an increase of approximately
49% over revenues of $251,745 for the three month period ending December 31,
1995. The increase marks the Company's success in obtaining a greater volume of
seismic data processing projects.
Operating Expenses. Operating expenses of $9,547,631 for the three month
period ended December 31, 1996, represent an increase of approximately 119% over
operating expenses of $4,357,826 in 1995. Direct costs of seismic acquisition
increased by approximately 152%, from $3,069,344 for the three month period
ending December 31, 1995, to $7,733,785 for the same period ending December 31,
1996. This increase is due to the Company's expanded crew operations. Direct
costs of data processing increased approximately 6% for the three month period,
from $219,383 in 1995, to $231,616 in 1996.
Selling, General and Administrative Expenses. SG&A decreased approximately
6%, for the comparable three month periods, from $537,944 in 1995 to $506,279 in
1996.
Expenses Relating to Proposed Merger. The Company recognized $301,230 in
expenses relating to the proposed merger during the three month period ended
December 31, 1996. (See Note 5 to Consolidated Condensed Financial Statements)
Depreciation and Amortization. Depreciation and amortization increased by
approximately 46% from $531,155 in 1995 to $774,721 in 1996, due to equipment
additions related to the Company's crew expansion and equipment additions made
in UST.
PAGE 8 OF 13
<PAGE>
Interest Expense. Interest expense increased approximately 28%, from
$259,781 for the three months ended December 31, 1995, to $331,875 for the same
period ended December 31, 1996. The increase is primarily related to equipment
financing required for the addition of the Company's sixth 3D data acquisition
crew in May 1996.
Net Income. The Company reported net income of $698,241 for the three
month period ended December 31, 1996 as compared to a net loss of $1,226,701 for
the three month period ended December 31, 1995. Net income of $698,241 includes
the effect of $301,230 of expenses relating to the proposed merger. (See Note 5
to Consolidated Condensed Financial Statements) This increase reflects improved
operating production attained by the Company's data acquisition crews during the
three month period ending December 31, 1996. Gross profit margins increased, but
remain subject to competitive market conditions in the seismic industry.
LIQUIDITY AND CAPITAL RESOURCES
For the six months ended December 31, 1996, cash and cash equivalents increased
by $373,349 to $1,355,780. Capital expenditures of $5,005,098 during the six
months include $4,204,559 invested in oil and gas properties, $541,144 for
miscellaneous data acquisition equipment and, $259,395 for data processing
equipment. The Company reduced long term debt by $443,168 during the six month
period ended December 31, 1996. The Company incurred expenses relating to the
proposed merger of $301,230 during the six month period ending December 31,
1996. (see Note 5 to Consolidated Financial Statements)
During the six months ended December 31, 1996, UNEXCO received $680,625 from the
partial sale of certain leasehold interests. (See Note 4 to Consolidated
Condensed Financial Statements) Also, UNEXCO signed an agreement to reduce its
50% working interest on the Yuma-Raccoon Island Prospect. Under this agreement
UNEXCO received $563,832 on January 16, 1997, maintains a 10% working interest
on the prospect, and receives a 10% carried interest to casing point on the
first well.
On December 20, 1996 the Company's energy subsidiary UNEXCO entered into a
$4,000,000 revolving line of credit facility with RIMCO. (See Note 6 to
Consolidated Condensed Financial Statements) As of December 31, 1996, UNEXCO
had borrowed a total of $900,000 from this facility. As of February 20, 1997
the outstanding balance borrowed under this facility was $2,750,000.
The Company's accounts payable balance increased by $2,736,524 during the six
month period ended December 31, 1996 and by $907,069 for the three month period
ending December 31, 1996. The increase can be attributed to (i) slow collection
of accounts receivable that restricted cash available to reduce accounts
payable, (ii) the net loss incurred by the Company's data acquisition business
during the first three months (the quarter ended September 30, 1996) of the
current six month period that restricted cash available to reduce accounts
payable and (iii) increased expenditures associated with the expanded data
acquisition and exploration and production operations. At September 30, 1996 the
Company had approximately $1,400,000 in trade accounts receivable over 90 days
past due, which level of aged accounts receivable is
PAGE 9 OF 13
<PAGE>
materially higher than the Company typically experiences. At December 31, 1996
the Company had approximately $625,000 in trade accounts receivable over 90 days
past due. The Company's management expects such accounts receivable to be
collected in the subsequent periods and therefore no allowance for doubtful
accounts has been established with respect to these receivables.
At December 31, 1996, the Company had cash balances of $1,355,780. The Company
believed its existing cash reserves, anticipated cash flow from its expanded
operations, and funds available under its accounts receivable and exploration
and production credit facilities would be sufficient to meet its working capital
requirements for the foreseeable future.
SUBSEQUENT EVENTS
None
PAGE 10 OF 13
<PAGE>
OTHER INFORMATION
Item 1. Legal Proceedings
On January 13, 1997, Michael T. Kanarellis and Robert L. Kecseg, who have
collectively styled themselves as the "Universal Seismic Associates, Inc.
Shareholders Protective Committee" (the "Committee") filed suit in the United
States District Court for the District of Delaware (the "Delaware Court"). The
suit sought to enjoin the January 28, 1997 annual meeting of the Company's
shareholders (the "Annual Meeting") for 30 days, to declare the proxies and
consents submitted to the Company to be invalid and to declare the Company to
have violated the proxy rules and Delaware law; requiring corrective disclosure.
The Delaware Court ordered that the Company hold the polls open for 14 days
after the Annual Meeting adjourned (until February 11, 1997).
The suit has not been dismissed by the plaintiffs. However, all relief
requested in their Complaint related specifically to the timing and conduct of
the Annual Meeting, which was concluded on February 11, 1997 with the
reelection of management's slate of incumbent directors and the defeat of all of
the Committee's proposals. (See Item 4. Submission of Matters to a Vote of
Security Holders). Mr. Kanarellis threatened further litigation at the annual
shareholders' meeting held on February 11, 1997. The Company and its directors
were subsequently sued by Mr. Kanarellis. Litigation is ongoing.
Item 2. Changes in Securities
None
Item 3. Default Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
Universal Seismic Associates, Inc. originally convened its Annual Meeting on
January 28, 1997 with the purpose of electing five directors to serve until the
next annual meeting. Calvin G. Cobb, Ronald L. England, Michael J. Pawelek, Gary
J. Milavec and Stephen F. Oakes were nominated as management's slate of
directors. The proposed slate of directors of the Committee, consisting of
Michael T. Kanarellis, Robert J. Kecseg, Pedro L. Garmendia, Gordon M. Greve and
Donald B. Caldwell, were placed in nomination before the meeting. Also before
the meeting were the following proposals of the Committee:
Proposal one: Amendment of by-laws to change the order of business at the
Annual Meeting, as further described in the consent and proxy statement of the
Committee.
Proposal two: Amendment of by-laws to fix the number of directors of the
Company at five, as further described in the consent and proxy statement of the
Committee.
The January 28, 1997 meeting was adjourned to February 11, 1997 to comply with
Delaware Courts order to maintain the polls open until such date. (See Item 1
above)
PAGE 11 OF 13
<PAGE>
The following information is contained in the Final Report of the Inspector of
Election, CT Corporation System, dated February 21, 1997.
<TABLE>
<CAPTION>
QUORUM
---------
<S> <C>
Mgmt 2,744,187
Comm 1,717,756
------------------
Total 4,461,943
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
DIRECTORS
- ----------------------------------------------------------------------------------------------
MANAGEMENT SLATE COMMITTEE SLATE
- ----------------------------------------------------------------------------------------------
FOR WITHHELD FOR WITHHELD
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Michael J. Pawelek 2,729,737 14,450 Michael T. Kanarellis 1,714,506 3,250
- ----------------------------------------------------------------------------------------------
Ronald L. England 2,729,987 14,200 Robert J. Kecseg 1,714,506 3,250
- ----------------------------------------------------------------------------------------------
Calvin G. Cobb 2,729,987 14,200 Pedro L. Garmendia 1,714,506 3,250
- ----------------------------------------------------------------------------------------------
Stephen F. Oakes 2,729,987 14,200 Gordon M. Greve 1,714,506 3,250
- ----------------------------------------------------------------------------------------------
Gary J. Milavec 2,729,987 14,200 Donald B. Caldwell 1,714,506 3,250
- ----------------------------------------------------------------------------------------------
</TABLE>
- -------------------------------
PROPOSAL 1
- -------------------------------
For 1,713,106
Against 2,223,037
Abstain 2,750
- -------------------------------
- -------------------------------
PROPOSAL 2
- -------------------------------
For 1,715,106
Against 2,221,987
Abstain 1,800
- -------------------------------
Item 5. Other Information
On January 30, 1997 and thereafter, Michael T. Kanarellis, one of the members of
the Committee submitted letters to various members of the Audit Committee
("Audit Committee") alleging that "the Company's financial statements for the
fiscal year ended June 30, 1996 and the fiscal quarters ended September 30, 1996
and December 31, 1996 are false and materially misstated" and alleging certain
specific items of misstatement.
The Audit Committee met on February 11, 1997 to review the Shareholders'
Committee's allegations. The Audit Committee determined that it should conduct
a review (the "Audit Committee Review") of these allegations to determine if
there was any reasonable basis for such allegations. The Audit Committee has
engaged independent legal and auditing advisors to assist in connection with the
review.
PAGE 12 OF 13
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
Exhibit Number
- --------------
1.1.* Note Purchase Agreement dated December 20, 1996 between UNEXCO
and RIMCO.
1.2.* Guaranty Agreement dated December 20, 1996 between the Company
and RIMCO.
1.3.* Pledge Agreement dated December 20, 1996 between the Company
and RIMCO.
1.4.* Third Amendment to Note Purchase Agreement (1/19/96) dated
December 20, 1996 between the Company and RIMCO.
1.5.* First Amendment to Note Purchase Agreement (5/28/96) dated
December 20, 1996 between the Company and RIMCO.
2.2.* Financial Data Schedule
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the registrant caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UNIVERSAL SEISMIC ASSOCIATES, INC.
RONALD L. ENGLAND
Date: May 20, 1997 CHIEF FINANCIAL OFFICER
PAGE 13 OF 13
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