UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
Commission File Number: 2-56600
Global Industries, Ltd.
(Exact name of registrant as specified in its charter)
Louisiana 72-1212563
(State or other jurisdiction of incorporation or organization)(I.R.S.
Employer Identification No.)
107 Global Circle
P.O. Box 31936, Lafayette, LA 70593-1936
(Address of principal executive offices) (Zip Code)
(318) 989-0000
(Registrant's telephone number, including area code)
None
(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. X Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares of the Registrant's Common Stock
outstanding as of October 31, 1996 was 38,123,528.
Global Industries, Ltd.
Index - Form 10-Q
Part I
Item 1. Financial Statements - Unaudited
Independent Accountants' Report 3
Consolidated Statements of Operations 4
Consolidated Balance Sheets 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition
and Results of Operations 9
Part II
Item 1. Legal Proceedings 14
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 6. Exhibits and Reports on Form 8-K 15
Signature 16
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors and Shareholders of
Global Industries, Ltd.
We have reviewed the condensed consolidated financial statements
of Global Industries, Ltd. and subsidiaries, as listed in the
accompanying index, as of September 30, 1996 and for the three-
month and six-month periods ended September 30, 1996 and 1995.
These financial statements are the responsibility of the
Company's management.
We conducted our review in accordance with standards established
by the American Institute of Certified Public Accountants. A
review of interim financial information consists principally of
applying analytical procedures to financial data and of 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 such condensed consolidated
financial statements for them to be in conformity with generally
accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet of Global
Industries, Ltd. and subsidiaries as of March 31, 1996, and the
related consolidated statements of operations, shareholders'
equity, and cash flows for the year then ended (not presented
herein); and in our report dated May 31, 1996, we expressed an
unqualified opinion on those consolidated financial statements
and included an explanatory paragraph relating to the Company's
adoption of Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" effective April 1, 1993. In our
opinion, the information set forth in the accompanying condensed
consolidated balance sheet as of March 31, 1996 is fairly stated,
in all material respects, in relation to the consolidated balance
sheet from which it has been derived.
DELOITTE & TOUCHE LLP
October 25, 1996
New Orleans, Louisiana
Global Industries, Ltd.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
(Unaudited)
Quarter Ended Six Months Ended
September 30, September 30,
1996 1995 1996 1995
Contract Revenues $ 72,431 $45,362 $122,763 $77,157
Cost of Contract Revenues 50,647 29,821 88,626 52,894
Gross Profit 21,784 15,541 34,137 24,263
Selling, General and
Administrative
Expenses 3,594 3,006 6,564 5,801
Operating Income 18,190 12,535 27,573 18,462
Other Income (Expense):
Interest Expense (382) (43) (453) (87)
Other 69 521 206 1,194
(313) 478 (247) 1,107
Income Before Income Taxes 17,877 13,013 27,326 19,569
Provision for Income Taxes 5,360 4,815 8,166 7,241
Net Income $ 12,517 $ 8,198 $ 19,160 $12,328
Weighted Average Common
Shares
Outstanding 39,567,000 38,412,000 39,476,000 38,348,000
Net Income Per Share $ .32 $ .21 $ .49 $ .32
See Notes to Consolidated Financial Statements.
Global Industries, Ltd.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
September 30, March 31,
1996 1996
ASSETS
Current Assets:
Cash $ 6,337 $ 5,430
Escrowed funds, bond proceeds 32,302 16,189
Receivables 54,782 39,610
Prepaid expenses and other 3,041 3,825
Total current assets 96,462 65,054
Escrowed Funds, Bond Proceeds 9,190 4,768
Property and Equipment, net 158,228 126,295
Other Assets:
Deferred charges, net 8,007 5,453
Other 3,000 956
Total other assets 11,007 6,409
Total $ 274,887 202,526
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt $ 2,260 $ 1,048
Accounts payable 28,938 19,364
Accrued liabilities 7,312 4,020
Accrued profit-sharing 4,875 3,465
Insurance payable 2,837 2,893
Total current liabilities 46,222 30,790
Long-Term Debt 54,962 21,144
Deferred Income Taxes 17,898 14,898
Commitments and Contingencies
Shareholders' Equity:
Preferred stock -- --
Common stock, issued and outstanding,
38,123,528 and 37,808,224 shares, respectively 381 378
Additional paid-in capital 59,754 58,806
Retained earnings 95,670 76,510
Total shareholders' equity 155,805 135,694
Total $274,887 $202,526
See Notes to Consolidated Financial Statements.
Global Industries, Ltd.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
Six Months Ended
September 30,
1996 1995
Cash Flows From Operating Activities:
Net income $ 19,160 $ 12,328
Adjustments to reconcile net income to
net cash provided
by (used in) operating activities:
Depreciation and amortization 8,233 5,530
Deferred income taxes 3,000 1,700
Other 12 --
Changes in operating assets and
liabilities
(net of acquisitions):
Receivables (10,820) (27,962)
Prepaid expenses and other 1,382 (3,790)
Accounts payable and accrued 8,867 11,244
liabilities
Net cash provided by (used in) 29,834 (950)
operating activities
Cash Flows From Investing Activities:
Additions to property and equipment (31,309) (20,318)
Escrowed funds, bond proceeds (20,535) 301
Acquisition of business, net of cash (5,981) --
acquired
Additions to deferred charges (4,170) (235)
Other 91 276
Net cash (used in) investing (61,904) (19,976)
activities
Cash Flows From Financing Activities:
Proceeds from exercise of employee 833 125
stock options
Proceeds from issuance of long-term 33,328 --
debt
Repayment of long-term debt (1,184) (106)
Net cash provided by financing 32,977 19
activities
Cash:
Increase (Decrease) 907 (20,907)
Beginning of period 5,430 49,404
End of period $ 6,337 $ 28,497
Supplemental Cash Flow Information:
Interest paid, net of amount $ 393 $ 87
capitalized
Income taxes paid 2,572 2,029
See Notes to Consolidated Financial Statements.
Global Industries, Ltd.
Notes To Consolidated Financial Statements (Unaudited)
1. Basis of Presentation - The accompanying unaudited consolidated
financial statements include the accounts of the Company and its
wholly owned subsidiaries. The results of operations of Norman
Offshore Pipelines, Inc. since its acquisition on July 1, 1996,
are included in the accompanying financial statements.
In the opinion of management of the Company, all adjustments
(such adjustments consisting only of a normal recurring nature)
necessary for a fair presentation of the operating results for
the interim periods presented have been included in the unaudited
consolidated financial statements. Operating results for the
periods ended September 30, 1996, are not necessarily indicative
of the results that may be expected for the year ending March 31,
1997. These financial statements should be read in conjunction
with Management's Discussion and Analysis of Financial Condition
and Results of Operations included in this Form 10-Q, and the
Company's audited consolidated financial statements and related
notes thereto included in the Company's Annual Report on Form 10-
K for the fiscal year ended March 31, 1996.
On June 20, 1996, the Board of Directors, subject to shareholder
approval of an increase in the authorized number of shares of
common stock, declared a two-for-one common stock split
distributed in the form of a stock dividend on August 28, 1996 to
shareholders of record on August 16, 1996. On August 7, 1996,
the shareholders approved an amendment to the Company's Articles
of Incorporation to increase the authorized number of shares of
both common and preferred stock from 25,000,000 shares to
150,000,000 shares and 5,000,000 shares to 30,000,000 shares,
respectively. The accompanying 1995 financial statements have
been restated to reflect the above noted August 1996 stock split
as well as a previous two-for-one common stock split effected
during January 1996.
The financial statements required by Rule 10-01 of Regulation S-X
have been reviewed by independent public accountants as stated in
their report included herein.
2. Commitments and Contingencies - The Company is a party in legal
proceedings and potential claims arising in the ordinary course
of business. Management does not believe these matters will
materially effect the Company's consolidated financial
statements.
The Company has under construction a 200-foot semi-submersible
Swath (Small Waterplane Area Twin Hull) dive support vessel named
the Pioneer estimated to cost approximately $24.0 million.
Included in escrowed funds, bond proceeds, at June 30, 1996, is
$21.0 million, representing proceeds from the sale of ship bonds
in September 1994, which will become available to the Company
upon completion and delivery of the Pioneer. The Pioneer has
undergone sea trials and is expected to be available for service
during November 1996.
As previously reported Aker Gulf Marine filed suit against the
Company in the U.S. District Court, Western District of
Louisiana, Lafayette Division in December of 1995 seeking $8.2
million in additional costs believed by it to be owed because of
change orders during construction and $5.0 million for
disruption, acceleration and delay damages. In August 1996 the
Company reached an agreement with Aker Gulf Marine, and took
possession of the Pioneer which was relocated to the Company's
facility in Amelia, Louisiana where construction and equipping of
the vessel was completed. Under the terms of the agreement the
Company has been given clear title to the Pioneer in exchange
for a $3.2 million payment and the posting of a $4.5 million bond
in favor of Aker Gulf Marine. Such amounts and release of the
vessel are without prejudice to each company's rights to pursue
claims against the other in pending litigation or otherwise. The
Company does not believe that Aker Gulf Marine's claims are valid
and is vigorously defending against them and does not believe
that ultimate resolution of the claims will have a material
adverse impact on the Company's consolidated financial
statements.
On April 10, 1996, the Company received authorization to issue
United States Guaranteed Ship Financing Bonds in connection with
the construction of two liftboats, a launch barge, and a cargo
barge. The Ship Bonds, issued August 7, 1996, totaled $20.3
million, mature in 2022 and carry an interest rate of 7.25% per
annum. The proceeds from the issuance of the bond are included
in escrowed funds, bond proceeds and will be available to the
Company upon completion and delivery of the liftboats and barges.
The Company estimates that the cost to complete capital
expenditure projects in progress at September 30, 1996 will be
$88 million, including $55 million for the upgrade of the
Hercules.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
The following discussion should be read in conjunction with the
Company's unaudited consolidated financial statements for the
periods ended September 30, 1996 and 1995 and Management's
Discussion and Analysis of Financial Condition and Results of
Operations included in the Company's Annual Report on Form 10-K
for the fiscal year ended March 31, 1996.
Although the Company has been expanding its international
operations, 77% of the Company's contract revenues in fiscal 1996
and the first six months of fiscal 1997 were derived from work in
the U.S. Gulf of Mexico. The offshore marine construction
industry in the Gulf of Mexico is highly seasonal as a result of
weather conditions and the timing of capital expenditures by oil
and gas companies. Historically, a substantial portion of the
Company's services has been performed during the period from June
through November. As a result, a disproportionate portion of the
Company's contract revenues, gross profit and net income is
generally earned during the second (July through September) and
third (October through December) quarters of its fiscal year.
Because of the seasonality, full year results are not likely to
be a direct multiple of the first six-months results. The
following table documents the seasonal nature of the Company's
operations by presenting the weighted average percentage of
contract revenues, gross profit and net income contributed by
each fiscal quarter for the past three fiscal years.
Quarter Ended
June 30, Sept. 30, Dec. 31,March 31,
Contract revenues, three year average 22% 34% 26% 18%
Gross profit, three year average 20 41 28 11
Net income, three year average 18 44 28 10
The Company expanded its operations offshore West Africa during
the first half of fiscal 1996. Strong demand in this market
during the fourth quarter of fiscal 1996 resulted in the fourth
quarter of fiscal 1996 making a significantly greater
contribution to the year's contract revenues, gross profit and
net income than historically, which has a significant impact on
the three year averages shown above.
Results of Operations
The following table sets forth for the periods indicated the
Company's statements of operations expressed as a percentage of
contract revenues.
Quarter Ended Six Months Ended
September 30, September 30,
1996 1995 1996 1995
Contract revenues 100.0% 100.0% 100.0% 100.0%
Cost of contract (69.9) (65.7) (72.2) (68.6)
revenues
Gross profit 30.1 34.3 27.8 31.4
Selling, general and
administrative
expenses (5.0) (6.6) (5.3) (7.5)
Interest expense (0.5) (0.1) (0.4) (0.1)
Other income 0.1 1.1 0.2 1.6
(expense), net
Income before income 24.7 28.7 22.3 25.4
taxes
Provision for income (7.4) (10.6) (6.7) (9.4)
taxes
Net income 17.3% 18.1% (15.6%) 16.0%
Second Quarter Fiscal 1997 Compared to Second Quarter Fiscal 1996
Contract Revenues. Contract revenues for the second quarter of
fiscal 1997 of $72.4 million were $27.0 million or 60% higher
than the $45.4 million recorded in the second quarter of fiscal
1996. The improved revenue performance reflects the benefits of
international operations, stronger demand for Gulf of Mexico
derrick and diving services, and improved utilization and
dayrates on DSVs and liftboats in the current quarter as compared
to the fiscal 1996 period. In addition, the acquisition of Norman
Offshore Pipelines, Inc. ("Norman") on July 1, 1996 contributed
to revenues and barge days in our Coastal Division. These
increases were partially offset by a decline in the Company's
Gulf of Mexico pipeline services during the current quarter as
compared to the same period in fiscal 1996 resulting from reduced
activity levels and continued competition. Barge days employed
were 575 in the second quarter of fiscal 1997 compared with 346
days in the 1996 period. This increase is largely due to the
increased Coastal Division days resulting from the acquisition of
Norman. Liftboat and DSV days of 1,352 in the most recent period
were higher than the 1,028 days during the year earlier period.
Diver days totaled 4,945 in the second quarter of fiscal 1997
compared with 3,047 a year earlier.
Depreciation and Amortization. Depreciation and amortization
expenses, including amortization of dry-docking costs, were $4.6
million in the second quarter of fiscal 1997 compared to $2.8
million a year earlier. The increase was principally
attributable to increased utilization of the upgraded Chickasaw
and the Hercules, which was acquired in October, 1995, (both of
which are depreciated on a units-of-production basis), and higher
dry-dock amortization amounts.
Gross Profit. Gross profit for the second quarter of fiscal 1997
of $21.8 million was 40% higher than the $15.5 million for the
same quarter a year earlier. The gross profit increase was
primarily attributable to increases in international and derrick
services, partially offset by reduced gross profit from pipeline
installation services. Gross profit as a percent of contract
revenues declined for the current period to 30.1% as compared to
34.3% for the same quarter a year earlier, primarily due to lower
pipeline installation revenues, lower margins on the Coastal
Division revenues as compared to our larger and deeper water
barges, and that a significant portion of international revenues
was from fabrication and procurement which provide low margins.
Gross profit for the current quarter was further reduced by the
effect of a $1.1 million accrual for retirement and incentive
compensation expense, as compared to no provision in the same
quarter last year.
Selling, General and Administrative Expenses. Selling, general
and administrative expenses for the second quarter of fiscal 1997
were $3.6 million, 20% higher than the $3.0 million for the same
quarter a year earlier. A provision for retirement and incentive
compensation plan expense of $1.5 million was recorded in the
second quarter 1997, of which $0.5 million was included in
selling, general and administrative expenses and $1.1 million was
included in cost of contract revenues. In the year earlier
period no provision for such expense was recorded.
Other Income (Expense). Interest expense, net of $0.6 million
of capitalized interest cost, was $0.4 million in the current
quarter compared to less than $ 0.1 million in the same quarter a
year earlier. Other income in the current quarter of less than
$0.1 million was lower than the $0.5 million reported a year
earlier largely because the Company had less funds available for
investment.
Net Income. Net income for the second quarter of fiscal 1997 was
$12.5 million, an increase of 53% from $8.2 million in the same
quarter a year earlier. The Company's effective income tax rate
declined from 37% in the second quarter of fiscal 1996 to 30% in
the current quarter, reflecting the benefit of a lower effective
tax rate for the Company's international operations.
First Six Months of Fiscal 1997 Compared to First Six Months of
Fiscal 1996
Contract Revenues. Contract revenues for the first six months of
fiscal 1997 of $122.8 million were 59% higher than the $77.2
million reported for the same period a year earlier. The
increase in revenues for the six months largely results from
revenues generated by a full six months of international
operations, strong domestic derrick activity, including the
acquisition of the Hercules in October 1995 improved utilization
and dayrates on DSVs and liftboats, and the July 1, 1996
acquisition of Norman, partially offset by lower revenues
contributed by the Company's Gulf of Mexico pipelay barge fleet.
Barge days improved to 907, compared to the 614 days employed in
the same period last year. This increase is largely due to the
increased Coastal Division days resulting from the acquisition of
Norman July 1, 1996. Liftboat and DSV days employed of 2,672
were significantly higher than the 1,905 days worked during the
same period last year. Diver days employed totaled 8,490 for the
six months of fiscal 1996, up from 5,419 a year earlier.
Depreciation and Amortization. Depreciation and amortization,
including amortization of dry-docking costs, for the first six
months of fiscal 1997 was $8.1 million compared with $5.3 million
for the year earlier. The increase was principally attributable
to depreciation on the Cheyenne and the Hercules (both of which
are depreciated on a units-of-production basis) and higher dry-
dock amortization amounts. The Cheyenne first worked in West
Africa in August 1995, and the Hercules was acquired in October
1995.
Gross Profit. For the first six months of fiscal 1997 the
Company had gross profit of $34.1 million compared with $24.3
million for the first six months of fiscal 1996. Gross profit as
a percent of revenues for the current six-month period was 27.8%,
3.6% below the gross profit percentage earned during the first
six months of fiscal 1996 of 31.4%. The decline in the gross
profit margin for the six months was primarily due to the lower
pipeline installation revenues, lower margins on the Coastal
Division revenues as compared to our larger and deeper water
barges, and that a significant portion of international revenues
were from fabrication and procurement which provide low margins.
Gross profit for the current period was further reduced by the
effect of a $1.3 million accrual for retirement and incentive
compensation expense, as compared to a $0.7 million provision in
the same period last year.
Selling, General and Administrative Expenses. Selling, general
and administrative expenses for the first six months of fiscal
1997 totaled $6.6 million compared with $5.8 million for the
same period a year earlier. The increase in selling, general and
administrative expenses is principally due to a provision for
retirement and incentive compensation plan expense of $1.9
million recorded for the current six-month period compared with
$1.0 million for the same period in the prior fiscal year. Of
the provisions, $0.6 million in the current six-month period and
$0.3 million for the prior period were included in the selling,
general, and administrative expenses and $1.3 million and $0.7
million, respectively, were included in cost of contract
revenues.
Other Income(Expense). Interest expense, net of $1.0 million of
capitalized interest cost, was $0.5 million in the current six-
month period compared to $0.1 million in the same period a year
earlier. Other income in the current six-month period of $0.2
million was lower than the $1.2 million reported a year earlier
largely because the Company had less funds available for
investment.
Net Income. Net income for the first six-month period of fiscal
1997 was $19.2 million, up 55% from $12.3 million in the same
period a year earlier. The Company's effective income tax rate
for the current period was 30%, compared to 37% for the same
period a year earlier, reflecting the benefit of a lower
effective tax rate for the Company's international operations.
Liquidity and Capital Resources
The Company's operations generated cash of $29.8 million during
the first six-months of fiscal 1997. This cash from operations,
together with $33.0 million provided by financing activities,
funded investing activities of $61.9 million. Investing
activities consisted of principally capital expenditures, the
acquisition of Norman, dry-docking costs, and the placement of
Title XI bond proceeds in escrow. The funds provided by
financing activities represent draws against the Company's
revolving line of credit and proceeds from the sale of Title XI
Ship Bonds. Working capital increased $15.9 million during the
six-months from $34.3 million at March 31, 1996, to $50.2 at
September 30, 1996.
Capital expenditures during the first six months included the
costs of construction of two liftboats, a launch barge and a
cargo barge, and continued construction of the Pioneer. In
August 1996 the Company reached an agreement with Aker Gulf
Marine, and took possession of the Pioneer. The vessel was
relocated to the Company's facility in Amelia, Louisiana where
the construction and equipping of the vessel was completed. The
Pioneer has undergone sea trials and the Company expects to have
the vessel ready for operation for the coming Gulf of Mexico
winter season. Under the terms of the agreement, the Company has
received clear title to the Pioneer in exchange for a $3.2
million payment and the posting of a $4.5 million bond in favor
of Aker Gulf Marine. Such amounts and release of the vessel are
without prejudice to each company's rights to pursue claims
against the other in pending litigation or otherwise. See "Item
1. Legal Proceedings" included in Part II of this Form 10-Q for
additional information. The Company estimates the fully equipped
cost of the Pioneer to be $24.0 million. In September 1994 the
Company sold $20.9 million of MARAD guaranteed ship bonds in
connection with financing the cost of constructing and outfitting
the Pioneer. MARAD currently holds these funds in escrow and the
funds will be available to the Company upon completion and
delivery of the vessel.
The Company estimates that the cost to complete capital
expenditure projects in progress at September 30, 1996 will be
$88 million, including $55 million for the upgrade of the
Hercules, with $71 million to be incurred during fiscal 1997 and
the remainder during fiscal 1998. The addition of pipelay and
dynamic positioning capability to the Hercules is now scheduled
for completion in mid 1997.
In July 1996, the Company completed its previously announced
acquisition of Norman Offshore Pipelines, Inc. The purchase
price funding came from available cash and from draws against the
Company's revolving line of credit.
Long-term debt outstanding at September 30, 1996, includes $42.0
million of Title XI Ship Bonds issued under the authority of
MARAD. Included in this amount are $20.3 million of bonds which
the Company issued on August 7, 1996 to finance the construction
of two liftboats, a launch barge, and a cargo barge. The
Company's outstanding Ship Bonds mature in 2003, 2005, 2020, and
2022. The bonds carry interest rates of 9.15%, 8.75%, 8.30% and
7.25% per annum, respectively, and require aggregate semi-annual
payments of $0.5 million, plus interest, until January 1998 when
aggregate semi-annual payments will be $0.9 million. The
agreements pursuant to which the Ship Bonds were issued contain
certain covenants, including the maintenance of minimum working
capital and net worth requirements, which, if not met, result in
additional convenants that restrict the operations of the Company
and its ability to pay cash dividends. The Company is currently
in compliance with these covenants.
The Company maintains a $50.0 million revolving line of credit
("Loan Agreement") with a commercial bank. The Loan Agreement
allows for a maximum draw at any one time of $25.0 million for
general corporate purposes and $40.0 million for construction or
renovation of vessels, provided that the aggregate outstanding
principal amount shall never exceed $50.0 million. The revolving
credit facility of the Loan Agreement is available until January
1, 1998, at which time the amount then outstanding becomes due
and payable. Interest accrues at LIBOR plus 1.25% (6.6875% at
September 30, 1996) and is payable monthly. Continuing access to
the revolving line of credit is conditioned upon the Company
remaining in compliance with the covenants of the Loan Agreement,
including the maintenance of certain financial ratios. At
September 30, 1996, $13.0 million was outstanding under the Loan
Agreement (all of which had been drawn down during fiscal 1997)
and the Company was in compliance with the covenants contained
therein.
Funds available under the Company's credit facility and MARAD
financings, combined with available cash, and cash generated from
operations, are expected to provide sufficient funds for the
Company's operations, scheduled debt retirement, and planned
capital expenditures for the foreseeable future.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is involved in various routine legal proceedings
primarily involving claims for personal injury under the General
Maritime Laws of the United States and Jones Act as a result of
alleged negligence. The Company believes that the outcome of all
such proceedings, even if determined adversely, would not have a
material adverse effect on its consolidated financial statements.
As previously reported Aker Gulf Marine filed suit against the
Company in the U.S. District Court, Western District of
Louisiana, Lafayette Division in December 1995 seeking $8.2
million in additional costs believed by it to be owed because of
change orders during construction and $5.0 million for
disruption, acceleration and delay damages. In August 1996 the
Company reached an agreement with Aker Gulf Marine, and took
possession of the Pioneer, relocated the vessel to the Company's
facility in Amelia, Louisiana where construction and equipping of
the vessel was completed. Under the terms of the agreement the
Company has been given clear title to the Pioneer in exchange
for $3.2 million and the posting of a $4.5 million bond in favor
of Aker Gulf Marine. Such amounts and release of the vessel are
without prejudice to each company's rights to pursue claims
against the other in pending litigation or otherwise. The
Company does not believe that Aker Gulf Marine's claims are valid
and is vigorously defending against them and does not believe
that ultimate resolution of the claims will have a material
adverse impact on the Company's consolidated financial
statements.
Item 4. Submission of Matters to a Vote of Security Holders
The 1996 Annual Meeting of Shareholders of the Company was held
on August 7, 1996. At such meeting, each of the following
persons listed below, all of whom were incumbent directors, were
elected to the Board of Directors of the Company for a term
ending at the Company's 1997 Annual Meeting of Shareholders. The
number of votes cast with respect to the election of each such
person is set forth opposite such person's name.
Name of Director Number of Votes Cast
Broker
For Withhold Non-Vote Abstain
William J. 14,106,229 133,424 0 0
Dore'
Michael J. 14,106,427 133,226 0 0
Pollock
James C. Day 14,217,965 21,688 0 0
Edward P. 14,217,945 21,708 0 0
Djerejian
Myron J. 14,219,227 20,426 0 0
Moreau
At the 1996 Annual Meeting of Shareholders, the Company's
shareholders voted for (1) an amendment to the Company's 1992
Stock Option Plan, which increased the number of shares
authorized for issuance thereunder from 1.8 million to 2.4
million shares of Common Stock of the Company and (2) an
amendment to the Company's Amended and Restated Articles of
Incorporation which increases the number of authorized shares of
Preferred Stock to 30.0 million and the number of authorized
shares of Common Stock to 150.0 million. The number of votes
cast with respect to each proposal is set forth below:
Number of Votes Cast
Broker
For Against Abstain Withhold Non-Vote
Amendment to 10,168,845 2,845,618 13,221 0 0
Option Plan
Amendment to 12,486,102 1,708,827 42,724 0 0
Amend and
Restate Articles
ofIncorporation
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
No. 15, Letter re: unaudited interim financial
information.
No. 27, Financial Data Schedules.
(b) Reports on Form 8-K - None.
Signature
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
GLOBAL INDUSTRIES, LTD.
By: /s/MICHAEL J. POLLOCK
___________________________________
Michael J. Pollock
Vice President, Chief Financial Officer
(Principal Financial and Accounting Officer)
November 14, 1996
EXHIBIT 15
November 13, 1996
Global Industries, Ltd.
107 Global Circle
Lafayette, Louisiana 70503
We have made a review, in accordance with standards established
by the American Institute of Certified Public Accountants, of the
unaudited interim financial information of Global Industries,
Ltd. and subsidiaries for the periods ended September 30, 1996
and 1995, as indicated in our report dated October 25, 1996;
because we did not perform an audit, we expressed no opinion on
that information.
We are aware that our report referred to above, which is included
in your Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996, is incorporated by reference in Registration
Statement Nos. 33-58048 and 33-89778 on Form S-8.
We also are aware that the aforementioned report, pursuant to
Rule 436(c) under the Securities Act of 1933, is not considered a
part of the Registration Statement prepared or certified by an
accountant or a report prepared or certified by an accountant
within the meaning of Sections 7 and 11 of that Act.
DELOITTE & TOUCHE LLP
New Orleans, Louisiana
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Global
Industries, Ltd.'s financial statements for the six-months ended
September 30, 1996 and is qualified in its entirety by reference to such 10-Q.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 6,337
<SECURITIES> 0
<RECEIVABLES> 54,782
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 96,462
<PP&E> 158,228
<DEPRECIATION> 0
<TOTAL-ASSETS> 274,887
<CURRENT-LIABILITIES> 46,222
<BONDS> 54,962
0
0
<COMMON> 381
<OTHER-SE> 155,424
<TOTAL-LIABILITY-AND-EQUITY> 274,887
<SALES> 0
<TOTAL-REVENUES> 122,763
<CGS> 0
<TOTAL-COSTS> 88,626
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 453
<INCOME-PRETAX> 27,326
<INCOME-TAX> 8,166
<INCOME-CONTINUING> 19,160
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19,160
<EPS-PRIMARY> .49
<EPS-DILUTED> 0
</TABLE>
