SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
DATE OF REPORT (Date of earliest event reported): March 13, 1996
Tidewater Inc.
_____________________________________________________________________
(Exact name of registrant as specified in its charter)
DELAWARE 01-6311 72-0487776
________________________ ________________________ ______________________
(State of incorporation) (Commission File Number) (IRS Employer
Identification Number)
1440 CANAL STREET, NEW ORLEANS, LOUISIANA 70112
__________________________________________________________________________
(Address of principal executive offices - Zip Code)
Registrant's telephone number, including area code: (504) 568-1010
N/A
__________________________________________________________________________
(Former name or former address, if changed since last report)
Item 2. Acquisition or Disposition of Assets.
On March 13, 1996, the Registrant acquired all of the
outstanding common stock of Hornbeck Offshore Services, Inc.
("Hornbeck") from the shareholders of Hornbeck in exchange
for an aggregate of 8,475,215 shares of the Registrant's
common stock, $.10 par value per share. The acquisition was
effected through the merger of a wholly-owned subsidiary of
the Registrant, formed for this purpose, with and into
Hornbeck (the "Merger"), with the effect that Hornbeck has
become a wholly-owned subsidiary of the Registrant.
The terms and conditions of the Merger are set forth in
the Agreement and Plan of Merger (the "Plan") by and among,
the Registrant, Registrant's subsidiary and Hornbeck, which
was filed as Appendix A to the Registrant's Registration
Statement on Form S-4 (Registration No. 333-00221) dated
January 16, 1996, as amended (the "Registration Statement")
and is incorporated herein by reference.
Additional information relating to the Merger is set
forth in the Summary of the Proxy Statement and Prospectus
forming a part of the Registration Statement (the "Proxy
Statement") under the headings "Structure of the Merger and
Merger Consideration" (on pages 6 and 7 of the Proxy
Statement), and "Reasons for the Merger" (on pages 8 and 9
of the Proxy Statement), which information is incorporated
herein by reference.
Pursuant to the terms of the Plan, Mr. Larry D.
Hornbeck has been appointed to serve on the Registrant's
Board of Directors in the class of directors whose terms
expire in 1996. See Item 5 below, "Appointment to the
Registrant's Board of Directors."
Item 5. Other Events.
Appointment to the Registrant's Board of Directors
Pursuant to the terms of the Plan, on March 15, 1996
Mr. Larry D. Hornbeck became a member of the Board of
Directors of the Registrant in the class of directors whose
terms expire in 1996.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Consolidated Financial Statements of Hornbeck:
Report of Independent Accountants
Consolidated Balance Sheet at December 31, 1994 and 1995
Consolidated Statements of Income for the years ended
December 31, 1993, 1994 and 1995
Consolidated Statements of Cash Flows for the years ended
December 31, 1993, 1994 and 1995
Consolidated Statements of Stockholders' Equity for the
years endedDecember 31, 1993, 1994 and 1995
Notes to Consolidated Financial Statements
(b) Pro Forma Financial Information (Unaudited):
Tidewater Inc. Unaudited Pro Forma Condensed Combined
Financial Information:
Pro Forma Condensed Combined Balance Sheet (Unaudited) as of
December 31, 1995
Pro Forma Condensed Combined Statements of Earnings (Unaudited)
for the years ended March 31, 1993, 1994 and 1995, and the
nine months ended December 31, 1994 and 1995
Notes to Unaudited Pro Forma Condensed Combined Financial
Information
(c) Exhibits
2 Agreement and Plan of Merger dated December 21,
1995, (filed with the Commission as Appendix A to
Tidewater Inc.'s Registration Statement on Form S-
4 (Registration Number 333-00221) and incorporated
herein by reference.)
4 Restated Rights Agreement dated as of December 17,
1993 between Tidewater Inc. and The First National
Bank of Boston (filed with the Commission as
Exhibit 4 to Tidewater Inc.'s quarterly report on
Form 10-Q for the quarter ended December 31, 1993
and incorporated herein by reference.)
23 Consent of Price Waterhouse LLP
HORNBECK OFFSHORE SERVICES, INC.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
Hornbeck Offshore Services, Inc.
In our opinion, the consolidated financial statements of Hornbeck Offshore
Services, Inc. listed in the index appearing on page F-1 present fairly, in all
material respects, the financial position of Hornbeck Offshore Services, Inc.
and its subsidiaries at December 31, 1994 and 1995, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1995, in conformity with generally accepted accounting principles.
These financial statements are the responsibility of the Company's management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which 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,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
As discussed in Note 2 to the financial statements, the Company entered into an
Agreement and Plan of Merger with Tidewater Inc. on December 21, 1995.
PRICE WATERHOUSE LLP
HOUSTON, TEXAS
FEBRUARY 12, 1996
F-2
<PAGE>
HORNBECK OFFSHORE SERVICES, INC.
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------------
1994 1995
------------ ------------
(in thousands)
<S> <C> <C>
ASSETS
Current assets:
Cash and equivalents ....................................... $ 8,572 $ 13,945
Accounts receivable, net of allowance for doubtful
accounts of $25 and $120, respectively..................... 11,747 13,400
Prepaid and other current assets............................ 1,121 1,473
Current portion of note receivable from affiliate........... 880 436
------------ ------------
Total current assets.................................... 22,320 29,254
------------ ------------
Property and equipment, net................................... 101,563 93,118
Investment in affiliates...................................... 16,851 14,976
Note receivable from affiliate................................ 1,394 218
Reserve funds and restricted cash............................. 1,280 1,024
Drydocking and other assets, net.............................. 4,474 8,195
Merger costs.................................................. 2,924
------------ ------------
$ 147,882 $ 149,709
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable............................................ $ 1,570 $ 2,655
Accrued interest............................................ 86 51
Income taxes payable........................................ 358 118
Accrued labor costs......................................... 953 950
Accrued medical costs....................................... 521 300
Other accrued liabilities................................... 618 836
Current portion of long-term debt........................... 3,467 3,561
------------ ------------
Total current liabilities............................... 7,573 8,471
------------ ------------
Long-term debt................................................ 21,023 11,852
------------ ------------
Deferred income taxes......................................... 12,379 16,109
------------ ------------
Commitments and contingencies (Note 12) Stockholders' equity:
Common stock, $.10 par value, 25,000,000 shares
authorized, 13,240,698 and 13,234,728 shares
issued and outstanding, respectively....................... 1,324 1,323
Additional paid-in capital.................................. 83,639 82,381
Retained earnings........................................... 21,944 29,573
------------ ------------
Total stockholders' equity 106,907 113,277
------------ ------------
$ 147,882 $ 149,709
============ ============
</TABLE>
The accompanying notes are an integral part of this statement.
F-3
<PAGE>
HORNBECK OFFSHORE SERVICES, INC.
CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------
1993 1994 1995
----------- ----------- ----------
(in thousands)
<S> <C> <C> <C>
Revenues......................................... $ 47,291 $ 45,834 $ 59,012
----------- ----------- ----------
Costs and expenses:
Direct labor and other operating expenses...... 20,588 23,484 29,858
Depreciation and amortization.................. 7,394 10,007 13,577
General and administrative expenses............ 2,938 3,576 4,244
----------- ----------- ----------
30,920 37,067 47,679
----------- ----------- ----------
Other income (expense):
Foreign exchange loss.......................... (105) (10)
Gain on sale of assets......................... 9 736 431
Equity in earnings of affiliates............... 818 1,408 53
Unsuccessful salvage expense................... (945)
Other costs and expenses....................... (254) (149) (31)
Interest and other income...................... 799 1,439 1,198
Interest expense............................... (1,323) (864) (1,748)
----------- ----------- ----------
(896) 2,465 (107)
----------- ----------- ----------
Income before income taxes and
extraordinary charge........................... 15,475 11,232 11,226
Income taxes..................................... (4,530) (3,209) (3,597)
----------- ----------- ----------
Income before extraordinary charge............... 10,945 8,023 7,629
Extraordinary charge for early extinguishment....
of debt, net of income tax benefit of $145...... (280)
----------- ----------- ----------
Net income....................................... $ 10,665 $ 8,023 $ 7,629
=========== =========== ==========
Earnings per share before extraordinary charge... $ .92 $ .60 $ .57
Extraordinary charge (.02)
----------- ----------- ----------
Earnings per share............................... $ .90 $ .60 $ .57
=========== =========== ==========
</TABLE>
The accompanying notes are an integral part of this statement.
F-4
<PAGE>
HORNBECK OFFSHORE SERVICES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS (NOTE 12)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------
1993 1994 1995
----------- ----------- ----------
(in thousands)
<S> <C> <C> <C>
Cash flows from operating activities:
Cash received from customers and affiliates............. $ 43,185 $ 43,498 $ 57,358
Cash paid to suppliers and employees.................... (25,936) (23,429) (32,975)
Cash paid for income taxes.............................. (1,847) (1,512) (280)
Interest and other income received...................... 753 1,428 1,135
Interest paid........................................... (1,230) (837) (1,781)
Refund of income taxes.................................. 1,266
Distribution from partnership........................... 38
----------- ----------- ----------
Net cash provided by operating activities.......... 16,229 19,148 23,457
----------- ----------- ----------
Cash flows from investing activities:
Capital and drydocking expenditures..................... (9,209) (57,973) (9,534)
Purchase of marketable securities....................... (24,007)
Sale of marketable securities........................... 500 27,310
Increase in other assets................................ (134) (45) (40)
Decrease (increase) in reserve funds.................... 312 (890) (253)
Investment in affiliates................................ (11,677) (195) 119
Loan to affiliate....................................... (2,351)
Repayment of loan to affiliate.......................... 72 1,610
Sale of property and equipment.......................... 1,300 3,491 1,119
Merger costs............................................ (2,924)
Salvage expenditures.................................... (945)
----------- ----------- ----------
Net cash used by investing activities.............. (43,860) (30,581) (9,903)
----------- ----------- ----------
Cash flows from financing activities:
New borrowings.......................................... 23,000
Repayment of borrowings................................. (5,917) (9,158) (8,504)
Issuance of common stock and warrants................... 39,959 36 323
Repurchase of Series 1 preferred stock and warrants..... (886)
----------- ----------- ----------
Net cash provided (used) by financing activities... 34,042 12,992 (8,181)
----------- ----------- ----------
Net increase in cash and equivalents...................... 6,411 1,559 5,373
Cash and equivalents at beginning of year................. 602 7,013 8,572
----------- ----------- ----------
Cash and equivalents at end of year....................... $ 7,013 $ 8,572 $ 13,945
=========== =========== ==========
</TABLE>
The accompanying notes are an integral part of this statement.
F-5
<PAGE>
HORNBECK OFFSHORE SERVICES, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL COMMON
PREFERRED ------------------------ PAID-IN STOCK RETAINED
STOCK SHARES AMOUNT CAPITAL WARRANTS EARNINGS
------- -------- --------- --------- --------- ---------
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
Balance - December 31, 1992............ $ 205 10,007 $ 1,001 $ 41,217 $ 385 $ 3,256
Sale of common stock for cash,
net of expenses....................... 2,500 250 39,538
Issuance of common stock for stock
options exercised and shares issued
for directors' stock plan and other... 79 8 213
Issuance of stock for Ravensworth
acquisition........................... 159 16 2,707
Tax benefit of stock sold by employees. 129
Net income............................. 10,665
------- -------- --------- --------- --------- ---------
Balance - December 31, 1993............ 205 12,745 1,275 83,804 385 13,921
Purchase of Series 1 preferred stock... (205) (313)
Warrants exercised or repurchased...... 481 48 (32) (385)
Issuance of common stock for stock
options exercised and shares issued
for directors' stock plan and other... 15 1 144
Tax benefit of stock sold by employees. 36
Net income............................. 8,023
------- -------- --------- --------- --------- ---------
Balance - December 31, 1994............ 13,241 1,324 83,639 21,944
Issuance of common stock for stock
options exercised and shares issued
for directors' stock plan and other... 100 10 505
Tax benefit of stock sold by employees. 36
Return of shares held in escrow........ (106) (11) (1,799)
Net income............................. 7,629
------- -------- --------- --------- --------- ---------
Balance - December 31, 1995............ $ 13,235 $ 1,323 $ 82,381 $ $ 29,573
======= ======== ========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of this statement.
F-6
HORNBECK OFFSHORE SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BUSINESS AND SUMMARY OF ACCOUNTING POLICIES:
ORGANIZATION AND HISTORY
Hornbeck Offshore Services, Inc. was incorporated under the laws of the state of
Delaware in January 1981. All references to the "Company" refer to Hornbeck
Offshore Services, Inc. and its subsidiaries unless the context requires
otherwise.
As discussed in Note 2, on December 21, 1995, the Company entered into an
Agreement and Plan of Merger with Tidewater Inc. (Tidewater).
NATURE OF OPERATIONS
The Company is engaged in the worldwide offshore marine services business,
mainly serving the oil and gas industry through its operation and management of
a diversified fleet of 61 vessels (the vessels) located primarily in the Gulf of
Mexico. The fleet consists of supply, tug-supply, crew and specialty vessels; 56
of the vessels are owned, 4 are chartered and 1 is managed for an unrelated
party. Additionally, the Company maintains a 49.9% equity interest in 3
entities which operate and own or lease a combined fleet of 29 safety standby
vessels in the North Sea.
The Company's operating revenue is directly affected by average day rates and
fleet utilization which are closely aligned with the offshore oil and gas
exploration and development industry. The level of exploration and development
of offshore areas is affected by both short-term and long-term trends in oil and
gas prices which, in turn, are related to the demand for petroleum products and
the current availability of oil and gas resources.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiaries. The equity method of accounting is used when the
Company has a 20%-50% interest in an affiliate. Under the equity method,
original investments are recorded at cost and are adjusted by the Company's
share of earnings or losses. All significant intercompany accounts and
transactions have been eliminated. Any difference between the Company's share of
book value of an equity affiliate and its investment amount is amortized over
the remaining useful life of the underlying assets.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
REVENUE AND EXPENSE RECOGNITION
Charter revenue is earned and recognized on a daily rate basis. The Company's
accounts receivable are generally unsecured and are due primarily from companies
involved in exploration and production of oil and gas reserves.
Operating and other costs are expensed as incurred.
F-7
PROPERTY AND EQUIPMENT
For financial reporting purposes, the Company records depreciation expense using
the straight-line method over the estimated useful lives of the related assets.
For tax purposes, depreciation is computed using accelerated methods.
The net book value of the Company's vessels is reviewed periodically to
determine that their recorded value does not exceed the estimated future benefit
from utilization of those vessels in accordance with Statement of Financial
Accounting Standards (SFAS) No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of", issued in March
1995. The Company adopted SFAS No. 121 effective October 1, 1995 and such
adoption had no impact.
OTHER ASSETS
Other assets consist primarily of drydocking expenditures. Drydocking
expenditures are capitalized and amortized on a straight-line basis over the
period to be benefitted (generally 24 to 36 months).
DEFERRED INCOME TAXES
Deferred income taxes are determined utilizing a liability approach. This method
gives consideration to the future tax consequences associated with differences
between financial accounting and tax bases of assets and liabilities. Such
differences relate mainly to depreciable assets. This method gives immediate
effect to changes in income tax laws upon enactment. The income statement effect
is derived from changes in deferred income taxes on the balance sheet.
EARNINGS PER SHARE
Earnings per share is calculated using the weighted-average number of shares
outstanding assuming exercise of dilutive stock options and conversion of
preferred stock. The weighted-average number of primary shares, which includes
common shares and equivalent common shares outstanding, during the years ended
December 31, 1993, 1994 and 1995 was 11,901,000, 13,460,000 and 13,344,000,
respectively. Fully diluted earnings per share amounts are not materially
different from primary earnings per share amounts.
CASH AND EQUIVALENTS
For purposes of the consolidated statement of cash flows, the Company considers
all deposits readily convertible to known amounts of cash with original
maturities of three months or less to be cash and equivalents. For the years
ended December 31, 1994 and 1995, included in"Interest and other income" is
interest income of $1,173,000 and $1,094,000 from such deposits.
RECLASSIFICATIONS
Certain 1993 and 1994 amounts were reclassified to conform to the 1995
presentation.
NEW ACCOUNTING PRONOUNCEMENT
In October 1995, Statement of Financial Accounting Standards (SFAS) No. 123,
"Accounting for Stock-Based Compensation" was issued. SFAS No. 123 provides
companies with an alternative to the intrinsic value methodology of valuing
stock based compensation pursuant to APB Opinion No. 25, "Accounting for Stock
Issued to Employees". Under SFAS No. 123, companies have the option of valuing
such stock based compensation using fair value. Companies electing to continue
under the guidance of APB No. 25 are required to disclose the effects of SFAS
No. 123 in proforma footnote disclosure. The Company is required to adopt SFAS
No. 123 beginning January 1, 1996. Due to the pending merger with Tidewater,
management has not selected a preferred accounting method.
F-8
NOTE 2 - PROPOSED MERGER WITH TIDEWATER, INC.:
On December 21, 1995, Hornbeck Offshore Services, Inc. (Hornbeck) entered into
an Agreement and Plan of Merger with Tidewater Inc. (Tidewater) to merge a
wholly owned subsidiary of Tidewater into Hornbeck with Hornbeck becoming a
wholly owned subsidiary of Tidewater. The merger will be structured as a tax
free exchange of approximately 8,780,000 Tidewater shares for all Hornbeck
shares (an exchange ratio of 0.667 Tidewater shares for each Hornbeck share,
subject to adjustment) and will be accounted for as a pooling of interests.
The Board of Directors of both Hornbeck and Tidewater have approved the
combination subject to the approval of stockholders of Hornbeck holding at least
66 2/3% of the outstanding Hornbeck common stock and certain other conditions.
The merger is expected to be presented for stockholders' approval on March 13,
1996 with consummation immediately thereafter, if approved. Upon consummation of
the merger, Larry D. Hornbeck will join the Board of Directors of Tidewater and
will become a consultant to Tidewater.
On December 29, 1995, Hornbeck made advance payments in the approximate
aggregate amount of $2,500,000 to three executive officers, such payments being
a portion of the amounts to which such officers would become entitled following
consummation of the merger under the terms of change in control agreements
between Hornbeck and such executive officers. The impact on operations of these
amounts and certain other disbursements related to the merger have been deferred
pending consummation of the transaction and are classified as merger costs in
the consolidated balance sheet.
NOTE 3 - ACQUISITIONS AND DISPOSITIONS OF BUSINESSES AND VESSELS:
In 1995, the Company sold one vessel for $1 million and realized a gain of
$431,000. From January through September 1994, the Company sold four vessels for
$3.1 million and realized a gain of $736,000. During the same period, three
vessels were acquired for cash consideration of $5.2 million.
On November 30, 1994, the Company acquired an equity interest in Seaboard
Holdings Limited (Note 5). On November 15, 1994, the Company completed the
acquisition of 13 supply vessels from Oil and Gas Rental Services, Inc. (Oil &
Gas) for cash consideration of $46 million. The Company borrowed $23 million in
connection with this acquisition (Note 6).
On July 23, 1993, the Company acquired an equity interest in Ravensworth
Investments Limited (Ravensworth), and the Company's share of earnings of this
affiliate has been included in the Company's results of operations since that
date (Note 4). On April 29, 1993, the Company sold two vessels previously being
operated in the North Sea to an unrelated entity for approximately $1.3 million,
which approximated the carrying value of the vessels. On June 17, 1993, the
Company purchased a supply vessel for cash payment of $1,175,000.
The results of operations of the acquired vessels are included in the
consolidated financial statements from the acquisition date of November 15, 1994
for the Oil & Gas acquisition. Substantially all of the purchase price was
allocated to vessels acquired based on their fair market values and the
transactions have been accounted for using the purchase method. The acquired
vessels were employed prior to the acquisitions and continue to be employed by
the Company after the closing of the acquisition in the offshore marine service
business, primarily serving the oil and gas industry.
Assuming the Oil & Gas transaction occurred at the beginning of each year
presented and the Ravensworth transaction occurred at the beginning of 1993,
condensed unaudited pro forma combined results of operations are as follows:
YEAR ENDED DECEMBER 31,
-------------------------------
1993 1994
------------ -------------
Revenues...................................... $ 62,109,000 $ 60,379,000
Income before extraordinary charge............ $ 13,464,000 $ 9,391,000
Earnings per share before extraordinary
charge....................................... $ 1.12 $ .70
F-9
NOTE 4 - PROPERTY AND EQUIPMENT:
Property and equipment consisted of the following at December 31:
ESTIMATED
USEFUL LIVES 1994 1995
------------ ----------- ------------
(in thousands)
Vessels......................... 25 $ 119,622 $ 119,125
Building........................ 25 771 971
Land............................ 182 274
Vehicles........................ 3 to 4 420 124
Furniture, fixtures and other... 3 to 10 332 429
----------- ------------
121,327 120,923
Less - accumulated depreciation. 19,764 27,805
----------- ------------
Property and equipment, net..... $ 101,563 $ 93,118
=========== ============
Depreciation expense related to property and equipment for 1993, 1994 and 1995
was $5,196,000, $6,267,000 and $9,343,000, respectively. A portion of property
and equipment is pledged to secure long-term debt (Note 6).
Drydocking expenditures included in other assets for the year ended December 31
are as follows (in thousands):
1993 1994 1995
--------- --------- ---------
Balance -- beginning of year.. $ 1,519 $ 5,234 $ 4,409
Additions..................... 5,825 2,915 7,945
Amortization.................. (2,110) (3,740) (4,234)
--------- --------- ---------
Balance -- end of year $ 5,234 $ 4,409 $ 8,120
========= ========= =========
NOTE 5 - INVESTMENTS IN AFFILIATES:
On November 30, 1994, the Company acquired 49.9% of the equity interests of
Seaboard Holdings Limited, a Scottish corporation (Seaboard). The transaction
was accounted for using the purchase method of accounting. At the time of the
transaction, Seaboard owned a fleet of six safety standby vessels operating in
the North Sea. Consideration in the form of a guarantee of approximately
$483,000 of certain Seaboard indebtedness was given. Further, the Company funded
an unsecured loan totaling pound sterling 1.5 million ($2.35 million at November
30, 1994) to Seaboard for operational purposes and has recorded a note
receivable from affiliate which bears interest at LIBOR plus 1 3/4% and is
payable in 32 equal monthly installments. During 1995, 50% of the remaining note
balance was funded by Ravensworth Holdings Limited (RHL), the owner of a 50.1%
interest in Seaboard and Ravensworth. The Company accounts for its investment in
Seaboard using the equity method of accounting.
In connection with the Seaboard acquisition, the Company was granted an option
by RHL to acquire the remaining outstanding equity interest in Seaboard.
Exercise of the option is contingent upon the Company's exercise, in full, of
the options to acquire the remaining capital stock of Ravensworth, as discussed
below.
On July 23, 1993, the Company acquired 49.9% of the outstanding capital stock of
Ravensworth from RHL, the owner of the outstanding capital stock of Ravensworth,
for a purchase price of $11 million in cash and approximately $2.7 million in
the form of 158,978 shares of restricted Common Stock (Ravensworth Acquisition).
Ravensworth owned or chartered a fleet of 22 safety standby vessels operating in
the North Sea at the time of the acquisition. The Company accounts for its
investment in Ravensworth using the equity method of accounting. The difference
between the Company's investment in Ravensworth and its proportionate share of
Ravensworth's book equity totaled $7,985,000 at December 31, 1995 and this
difference is being depreciated over the remaining useful life of the
Ravensworth fleet. The Company used the purchase method of accounting for this
transaction.
F-10
In connection with the Ravensworth Acquisition, the Company acquired options to
purchase the remaining outstanding capital stock of Ravensworth, exercisable
after January 1, 1995 in two equal annual installments, with the first option
exercisable on or before March 31, 1996 (the 1995 Option) and the second option
exercisable on or before March 31, 1997 (the 1996 Option). The Company may, at
its election, accelerate the exercise of the 1996 Option to any date on or after
January 1, 1995. The 1996 Option will expire unless the 1995 Option is exercised
in full. The consideration payable upon exercise of the 1995 Option and the 1996
Option is to be paid one-third in cash and two-thirds in common stock of the
Company valued at market price, as defined in the applicable agreements. The
Company may elect to pay in U.S. dollars any payments that would otherwise be
made to RHL in the Company's common stock.
The per share consideration to be paid for the remainder of Ravensworth (subject
to the adjustment described below) will be equal to the per share price paid by
the Company for the initial 49.9% investment, plus simple interest at 7%
(compounded annually) from the closing of the initial acquisition to the date of
payment. The consideration for Ravensworth will be adjusted by 50% of any
difference in actual Ravensworth and Seaboard earnings before depreciation,
interest and taxes (EBDIT) versus a target EBDIT for 1994 and 1995 and by 25% of
such difference for 1996. The maximum adjustment to the consideration paid or
payable for Ravensworth with respect to any year for which EBDIT is measured
against a specified target is limited to $4 million. In the event the Company
does not exercise either of the options to acquire additional interests in
Ravensworth, the agreement calls for certain purchase/sale arrangements between
the parties with respect to Ravensworth.
In connection with the Company's initial purchase of 49.9% at Ravensworth,
approximately 106,000 shares of the Company's common stock placed in escrow at
the time of acquisition were returned to the Company based on Ravensworth's
actual EBDIT for 1994 compared to targeted EBDIT as described under the
agreement. Such shares, valued at approximately $1.8 million, were canceled and
stockholders' equity and Ravensworth's investment accounts were reduced
accordingly.
Summarized historical, combined financial information for the affiliated
investees, which includes Ravensworth as of and for the years ended December 31,
1994 and 1995 and Seaboard as of and for the one month ended December 31, 1994
and year ended 1995 is as follows (in thousands):
1994 1995
---------- ------------
(Unaudited)
Current assets....................... $ 11,773 $ 11,979
Property and equipment, net.......... 73,389 66,619
Other noncurrent assets.............. 861 1,246
---------- ------------
Total assets................... $ 86,023 $ 79,844
========== ============
Current liabilities.................. $ 17,869 $ 14,275
Long-term debt....................... 50,328 47,349<F1>
Other noncurrent liabilities......... 1,574 953
Stockholders' equity................. 16,252 17,267
---------- ------------
Total liabilities and equity... $ 86,023 $ 79,844
========== ============
Revenues............................. $ 37,870 $ 49,937
Operating income..................... $ 5,823 $ 5,574
Foreign exchange loss (gain).........
(recognized in affiliates'
accounts but not in the Company's
accounts due to purchase accounting
adjustments)........................ $ (684) $ (201)
Net income........................... $ 3,765 $ 1,497
- ------------
[FN]
<F1> A total of approximately $30,000,000 of this debt is owed by certain
subsidiaries of Ravensworth and Seaboard who collectively have negative
shareholders' equity of approximately $400,000 which offsets the total
combined Ravensworth and Seaboard shareholders' equity. Such debt is
nonrecourse to both the Company and Ravensworth, except for a pound
sterling 300,000 guarantee by Hornbeck Offshore Services, Inc.
F-11
NOTE 6 - LONG-TERM DEBT:
Long-term debt consisted of the following at December 31 (in thousands):
1994 1995
---------- ----------
Bank note payable; principal payable in
quarterly installments of $714.4, plus
accrued interest at LIBOR plus 1% (6.875% at
December 31, 1995); secured by thirteen
vessels; matures November 15, 1999............ $ 20,000 $ 12,143
U.S. Government Guaranteed Ship Financing
Bonds payable in semiannual installments of
principal and interest as described below;
secured by mortgages on nine vessels and
guaranteed by the U.S. Maritime
Administration (MARAD)........................ 4,490 3,270
---------- ----------
24,490 15,413
Less - current portion........................ 3,467 3,561
---------- ----------
Long-term debt................................ $ 21,023 $ 11,852
========== ==========
Maturities of long-term debt outstanding at December 31, 1995 are as follows:
1996 - $3,561,000; 1997 - $3,433,000; 1998 - $3,367,000; 1999 - $4,081,000; and
2000 - $503,000.
Concurrent with the November 15, 1994 Oil & Gas vessel acquisition, the Company
entered into a $20 million term loan and a $10 million revolving credit facility
with a bank. Any borrowings under the revolving credit facility will be due and
payable on November 15, 1997. The availability of the revolving credit facility
is based on specified trade receivables levels and will be reduced by
outstanding letters of credit. At December 31, 1994 and 1995, there were no
outstanding balances under the revolving credit facility.
At the Company's option, interest with respect to any amounts outstanding under
the revolving credit facility and the bank term loan accrues at a rate equal to
the lender's prime rate, or the LIBOR rate plus 1%, and is payable quarterly.
The indebtedness is collateralized by 13 vessels owned by subsidiaries of the
Company. The indebtedness also contains covenants which, among other things,
provide limitations on the sale of such vessels and require the Company to
maintain certain financial ratios and minimum net worth.
The U.S. Government Guaranteed Ship Financing Bonds represent several series of
bonds which are guaranteed by MARAD. These bonds mature from 2000 to 2002 and
bear interest at rates ranging from 8.75% to 10.75%. The related reserve fund
balance was $1,024,000 at December 31, 1995. The Company expects to deposit
approximately $220,000 in 1996.
F-12
NOTE 7 - INCOME TAXES:
The components of the provision for income taxes for the years ended December 31
are as follows (in thousands):
<TABLE>
<CAPTION>
1993 1994 1995
--------- --------- --------
<S> <C> <C> <C>
Current provision (benefit):
U.S. federal income tax.......................... $ 2,480 $ 2,383
Alternative minimum and other taxes.............. 619 161 $ 176
State income tax................................. 104 25 (309)
Foreign taxes.................................... 62
Utilization of net operating loss carryforwards
and carrybacks.................................. (1,245) (864)
Utilization of investment tax credit
carryforward.................................... (381)
--------- --------- --------
1,958 1,386 (133)
--------- --------- --------
Deferred provision (benefit):
U.S. federal income tax.......................... 1,946 739 6,572
Alternative minimum tax and other credits........ (619) 220 (2,842)
Utilization of net operating loss carryforwards.. 1,245 864
--------- --------- --------
2,572 1,823 3,730
--------- --------- --------
Total provision for income taxes................... $ 4,530 $ 3,209 $ 3,597
========= ========= ========
</TABLE>
The difference between the effective income tax rate and the amount which would
be determined by applying the statutory U.S. income tax to income before taxes
is as follows:
DECEMBER 31,
-------------------------------
1993 1994 1995
------ ------ ------
Provision for income taxes at
U.S. statutory rates............ 34% 34% 34%
Foreign earnings not includable
in U.S. tax return.............. (2) (4)
Tax restructuring benefit........ (4) (1)
State taxes...................... 1 (2)
------ ------ ------
29% 29% 32%
====== ====== =====
The deferred income tax liability is primarily comprised of differences in the
tax and book basis of the Company's vessels and benefits from the carryforward
tax attributes as described below.
Undistributed earnings of the Company's foreign affiliates aggregated $3,986,000
on December 31, 1995, which, under existing law, will not be subject to U.S. tax
until distributed as dividends. Since the earnings have been and are intended to
be indefinitely reinvested in foreign operations, no provision has been made for
any U.S. taxes that may be applicable thereto. The amount of unrecognized
deferred U.S. taxes on these undistributed earnings is approximately $1,355,000.
Furthermore, any taxes paid to foreign governments on those earnings may be used
in whole or in part, as credits against the U.S. tax on any dividends
distributed from such earnings.
As of December 31, 1995, the Company has net operating loss carryforwards of
$347,000 which will expire from 2004 to 2005 if not used to offset future
taxable income. The utilization of these net operating losses is subject to an
annual limitation of $53,000. As of December 31, 1995, the Company has
investment tax credit carryforwards of $1,006,000 which will expire in 1997, if
not used to offset future income. As of December 31, 1995, the Company also has
alternative minimum tax credit carryforwards of $4,600,000.
F-13
NOTE 8 - COMMON STOCK, PREFERRED STOCK AND WARRANTS:
On July 21, 1993, the Company completed a public offering of 2,500,000 shares of
common stock for aggregate proceeds of approximately $40,000,000, after
expenses. Proceeds have been and will be utilized for the Ravensworth
acquisition, to repay certain debt and for general corporate purposes. In
connection with the July 23 closing of the Ravensworth acquisition, 158,978
shares of common stock were issued at an aggregate value of $2,722,500.
In September 1994, the Company purchased the remaining 71 shares of Series 1
Preferred Stock for $518,000 with the price determined in accordance with the
liquidation preference thereof.
In June 1994, 928,752 common stock purchase warrants were exercised. Pursuant to
the terms of the warrant agreement, the Company issued 480,588 shares of common
stock in exchange for all of such warrants. In September 1994, the Company paid
$368,896 to repurchase 71,428 warrants.
As discussed in Note 5, in 1995, approximately 106,000 shares were returned to
the Company pursuant to the Ravensworth acquisition agreement. The shares were
canceled by the Company.
NOTE 9 - RELATED PARTY TRANSACTIONS:
Bareboat charter fees are paid to an affiliate of a director of the Company.
Such fees totaled $600,000, $940,000 and $803,000 for the years ended December
31, 1993, 1994 and 1995, respectively. Until September 1993, a director of the
Company was an affiliate of an investment banking firm providing investment
banking services. The Company paid fees totaling $301,000 in 1993 for such
services.
NOTE 10 - EMPLOYEE INCENTIVE PLANS:
Pursuant to the Company's Employee Incentive Plans of 1982, 1989 and 1993, the
Board of Directors (or compensation committee thereof) has been empowered to
grant (over respective ten-year periods) stock options, stock appreciation
rights and stock bonuses with respect to an aggregate of 950,000 shares of
Common Stock. There were 466,770, 458,712 and 390,739 shares available for
grant at December 31, 1993, 1994 and 1995, respectively.
The following is a summary of stock option activity for the years ended
December 31:
<TABLE>
<CAPTION>
1993 1994 1995
------------- ------------- --------------
<S> <C> <C> <C>
Options outstanding at
beginning of year................ 311,559 287,619 283,593
Options granted................... 20,160 7,250 59,841
Options exercised................. (44,100) (9,861) (80,693)
Options canceled.................. (1,415) (7,507)
------------- ------------- --------------
Options outstanding at end of year 287,619 283,593 255,234
============= ============ ==============
Price range of options granted.... $6.31-13.00 $14.25-14.63 $9.88-11.50
Price range of options exercised.. $2.63-5.84 $3.50-6.31 $3.50-13.00
Price range of options outstanding
at end of year................... $3.25-13.00 $3.25-14.63 $3.25-14.63
</TABLE>
F-14
The stock options are exercisable over a five-year or ten-year period which
commences on the date of grant. The number of shares exercisable in each year
during the period is determined by the Company's Board of Directors (or
compensation committee) at the time of grant. At December 31, 1993, 1994 and
1995, options to purchase 246,739, 257,763 and 233,564 shares, respectively,
were exercisable. If the merger with Tidewater as discussed in Note 2, is
consummated, all options will be exercisable. Because the exercise price of the
options equaled the market price of the Company's stock on the dates the
options were granted, no compensation costs have been recognized by the Company.
Effective January 1, 1993, a total of 13,975 shares were awarded to employees
which vest over two years. Compensation expense of approximately $97,000 will be
recorded for the stock awards over the vesting period. On December 14, 1993, a
total of 13,070 shares were awarded to employees which vest over three years.
Compensation expense of approximately $170,000 will be recorded for the stock
awards over the vesting period.
In November 1994, a total of 2,698 shares which vest over a period of 1 1/2 - 2
years were awarded to employees. Compensation expense of approximately $37,845
will be recorded for the stock awards over the vesting period.
In April 1995, a total of 17,310 shares which vest over a period of three years
were awarded to employees. Compensation expense of approximately $199,065 will
be recorded for stock awards over the vesting period.
In 1993, 1994 and 1995, shares totaling 3,500, 4,200 and 4,800, respectively,
were awarded to the Company's Board of Directors pursuant to the Non-Employee
Directors Restricted Stock Plan.
No stock appreciation rights have been awarded under the Employee Incentive
Plans. The Company has no postretirement benefits that are required to be
accrued under Statement of Financial Accounting Standards (SFAS) No. 106,
"Accounting for Postretirement Benefits Other Than Pensions", nor does it have
postemployment benefits that are required to be accrued under SFAS No. 112,
"Employer's Accounting for Postemployment Benefits".
NOTE 11 - SEGMENT INFORMATION:
The Company's operations which are conducted in one segment, the offshore
service vessel industry. There were no charter fee revenues earned from
customers in excess of 10% of total revenues for 1993 and 1994. In 1995, one
customer accounted for approximately 10% of total revenues.
NOTE 12 - COMMITMENTS AND CONTINGENCIES:
Hornbeck has received and is responding to a subpoena for documents from the
U.S. District Court for the Southern District of Texas, Houston Division. The
scope of the subpoena suggests an interest in Hornbeck's compliance with certain
environmental statutes and regulations, violations of which could carry both
civil and criminal liabilities. The subpoena seeks information concerning
Hornbeck's vessels since January 1, 1993 regarding vessel operations as they
relate to the purchase, use and disposition of petroleum and related products.
It is Hornbeck's policy to comply with all applicable laws, including laws
designed to protect the environment. While management and the Hornbeck Board do
not believe that any outcome of the investigation would have a material adverse
effect on the financial position of Hornbeck, they cannot predict the nature or
ultimate outcome of the investigation or any proceeding that might be based
thereon.
The Company is not party to any legal proceedings the result of which could, in
the opinion of management, have a material adverse effect upon the Company.
F-15
NOTE 13 - CASH FLOW INFORMATION:
The following is a reconciliation of net income to net cash provided by
operating activities (in thousands):
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------
1993 1994 1995
---------- ---------- ----------
<S> <C> <C> <C>
Net income.......................................... $ 10,665 $ 8,023 $ 7,629
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization..................... 7,394 10,007 13,577
Amortization of noncompete agreements............. 291 150
Amortization of debt discount..................... 200 67 33
Deferred income taxes............................. 2,846 1,823 3,730
Equity in net income of unconsolidated affiliates. (822) (1,409) (53)
Cash distributions from unconsolidated affiliate.. 38
Unrealized income on marketable securities, net... (291)
Gain on sale of vessels........................... (736) (431)
Salvage expense................................... 945
Extraordinary charge for early retirement of debt. 280
Other............................................. (28) 100 174
Changes in current assets and liabilities, net:
Accounts receivable - trade..................... (3,813) (2,335) (1,653)
Refundable income taxes......................... 663
Prepaid and other current assets................ (3,309) 2,824 (352)
Accounts payable................................ 715 (291) 1,085
Accrued interest................................ (107) (40) (35)
Income taxes payable............................ 440 (82) (240)
Other accrued liabilities....................... 122 1,047 (7)
---------- ---------- ----------
Net cash provided by operating activities....... $ 16,229 $ 19,148 $ 23,457
========== ========== ==========
</TABLE>
The following is a supplemental schedule of noncash investing and financing
activities for the years ended December 31:
<TABLE>
<CAPTION>
1993 1994 1995
--------- --------- --------
<S> <C> <C> <C>
Issuance of common and preferred stock:
Nonemployee directors restricted stock plan... $ 16
Acquisition of Ravensworth.................... 2,723
Exercise of warrants.......................... $ 358
Return of Ravensworth stock held in escrow.... $ 1,809
Tax benefit of stock sold by employees.......... 129 36 36
</TABLE>
NOTE 14 - QUARTERLY FINANCIAL DATA (UNAUDITED):
Summarized quarterly financial data for 1993, 1994 and 1995 are as follows (in
thousands, except per share data):
<TABLE>
<CAPTION>
THREE MONTHS ENDED (1993)
---------------------------------------------------
MAR 31 JUN 30 SEP 30 DEC 31
------ ------ ------ ------
<S> <C> <C> <C> <C>
Revenues ..................................................... $ 9,410 $10,601 $12,582 $14,698
Depreciation and amortization ................................ 1,620 1,698 2,016 2,060
Operating profit <F1>......................................... 2,838 3,548 4,753 5,232
Net income ................................................... 1,779 2,774 3,427 2,685
Net income per share ......................................... .17 .26 .27 .20
F-16
THREE MONTHS ENDED (1994)
---------------------------------------------------
MAR 31 JUN 30 SEP 30 DEC 31
------ ------ ------ ------
Revenues ..................................................... $11,506 $ 9,807 $10,418 $14,103
Depreciation and amortization ................................ 2,273 2,441 2,430 2,863
Operating profit <F1>......................................... 2,534 1,198 1,509 3,526
Net income ................................................... 1,902 1,476 2,135 2,510
Net income per share ......................................... .14 .11 .16 .19
THREE MONTHS ENDED (1995)
---------------------------------------------------
MAR 31 JUN 30 SEP 30 DEC 31
------ ------ ------ ------
Revenues ..................................................... $12,671 $14,057 $14,603 $17,681
Depreciation and amortization ................................ 3,281 3,361 3,334 3,601
Operating profit (1) ......................................... 1,376 2,453 2,977 4,527
Net income ................................................... 487 1,579 2,139 3,424
Net income per share ......................................... .04 .12 .16 .26
</TABLE>
- ------------
[FN]
<F1> Operating profit equals operating revenues minus direct labor and other
operating expenses, depreciation and amortization and general and
administrative expenses.
F-17
TIDEWATER UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL INFORMATION
The following unaudited pro forma condensed combined
information is presented for illustrative purposes only and is
not necessarily indicative of the operating results or financial
position that would have occurred if the Merger had been
consummated in accordance with the assumptions set forth under
"Notes to Unaudited Pro Forma Condensed Combined Financial
Information," nor is it necessarily indicative of future
operating results or financial position.
The unaudited pro forma condensed combined balance sheet at
December 31, 1995 set forth below has been compiled from the
Tidewater unaudited balance sheet and the Hornbeck unaudited
balance sheet, both dated December 31, 1995, and gives effect to
the Merger under the pooling-of-interests accounting method as if
the Merger had occurred on December 31, 1995.
Pro Forma Condensed Combined Balance Sheet
December 31, 1995 - Unaudited
<TABLE>
<CAPTION>
Pro Forma
____________________________
Tidewater Hornbeck Adjustments Combined
___________ __________ _____________ _________
ASSETS (in thousands)
<S> <C> <C> <C> <C>
Current assets:
Cash, including temporary $ 10,234 $ 13,945 $ -- $ 24,179
cash investments
Trade and other receivables 131,146 13,400 -- 144,546
Inventories 32,311 -- -- 32,311
Other current assets 4,738 1,909 -- 6,647
___________ __________ __________ ___________
Total current assets 178,429 29,254 -- 207,683
___________ __________ __________ ___________
Investment in and advances to
unconsolidated companies 20,448 14,976 -- 35,424
Properties and equipment 1,453,891 120,923 -- 1,574,814
Less accumulated depreciation 882,941 27,805 -- 910,746
___________ __________ __________ ___________
Net properties and equipment 570,950 93,118 -- 664,068
Other assets 77,707 12,361 (8,120)(a) 81,948
___________ __________ __________ ___________
$ 847,534 $ 149,709 $ (8,120) $ 989,123
=========== ========== ========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-
term debt $ -- $ 3,561 $ -- $ 3,561
Accounts payable and accrued
expenses 72,793 4,792 -- 77,585
Income taxes 9,839 118 -- 9,957
___________ __________ __________ __________
Total current liabilities 82,632 8,471 -- 91,103
___________ __________ __________ __________
Deferred income taxes 59,226 16,109 (2,842)(b) 72,493
Long-term debt 5,000 11,852 -- 16,852
Accrued property and liability losses 37,658 -- -- 37,658
Other liabilities and deferred credits 41,215 -- -- 41,215
Stockholders' equity:
Common stock 5,334 1,323 (492)(c) 6,165
Additional paid-in capital 335,625 82,381 492 (c) 418,498
Retained earnings 292,982 29,573 (5,278)(d) 317,277
___________ __________ __________ __________
633,941 113,277 (5,278) 741,940
___________ __________ __________ __________
Less:
Cumulative foreign currency
translation adjustment 10,759 -- -- 10,759
Deferred compensation--
restricted stock 1,379 -- -- 1,379
___________ __________ __________ _________
Total stockholders' equity 621,803 113,277 (5,278) 729,802
___________ __________ __________ _________
$ 847,534 $ 149,709 $ (8,120) $ 989,123
=========== ========== ========== =========
</TABLE>
See accompanying Notes to Unaudited Pro Forma Condensed Combined
Financial Information.
The unaudited pro forma condensed combined statements of earnings set forth
below have been compiled from the following:
(1) Tidewater audited statements of earnings for each of the years
in the three-year period ended March 31, 1995.
(2) Tidewater unaudited statements of earnings for the nine months
ended December 31, 1994 and 1995.
(3) Hornbeck audited statements of earnings for each of the years in the
three-year period ended December 31, 1994.
(4) Hornbeck unaudited statements of earnings for the nine months
ended December 31, 1994 and 1995.
Hornbeck's fiscal year end is December 31 and Tidewater's fiscal year end is
March 31. The March 31, 1993, 1994 and 1995 Tidewater statements of earnings
are combined with the Hornbeck statements of operations for the years ended
December 31, 1992, 1993 and 1994, respectively. The Unaudited Pro Forma
Condensed Combined Statements of Earnings for the nine months ended
December 31, 1994 and 1995 include results of each entity for the nine months
ended December 31, 1994 and 1995. See Note (e) of "Notes To Unaudited Pro
Forma Condensed Combined Financial Information" for the Hornbeck unaudited
statements of earnings for the nine months ended December 31, 1994 and
1995. Additionally, retained earnings of the combined entities were adjusted
by $433,000 as of the beginning of Tidewater's fiscal 1996 year to include
the unaudited net earnings of Hornbeck, including adjustments to conform
accounting policies to those of Tidewater, for the period from January 1, 1995
to March 31, 1995. During this period, Hornbeck's revenues were
$12,671,000.
The following unaudited pro forma condensed combined statements of earnings
give effect to the Merger under the pooling-of-interests accounting method as
if Tidewater and Hornbeck had been combined since inception.
Pro Forma Condensed Combined Statements of Earnings - Unaudited
<TABLE>
<CAPTION>
Nine Months
Years Ended March 31, Ended December 31,
___________________________________________ ____________________________
1993 1994 1995 1994 1995
_____________ _____________ _____________ _____________ _____________
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C>
Revenues:
Tidewater Marine operations $ 431,874 $ 513,892 $ 501,118 $ 382,777 $ 396,671
Tidewater Compression operations 62,099 55,471 83,490 52,071 85,609
____________ ____________ ____________ ____________ ____________
493,973 569,363 584,608 434,848 482,280
____________ ____________ ____________ ____________ ____________
Costs and expenses:
Tidewater Marine operations
(Note (a)) 264,880 315,349 311,949 237,516 243,480
Tidewater Compression operations 36,283 30,338 45,886 28,826 45,603
Depreciation (Note (a)) 83,814 88,936 92,865 66,599 61,626
General and administrative 60,368 66,034 63,919 48,173 43,752
____________ ____________ ____________ ____________ ____________
445,345 500,657 514,619 381,114 394,461
____________ ____________ ____________ ____________ ____________
48,628 68,706 69,989 53,734 87,819
Other income (expenses):
Foreign exchange loss (1,788) (557) (611) (242) (584)
Gain on sales of assets 3,415 4,588 14,207 11,283 6,612
Equity in net earnings of
unconsolidated companies 2,530 3,504 4,555 3,638 4,599
Minority interests (2,544) (2,022) (1,488) (1,182) (925)
Interest and miscellaneous income 7,676 6,908 6,920 6,423 3,137
Other expense (3,941) (2,452) (8,499) (2,611) (18)
Interest expense (13,710) (9,262) (5,608) (2,507) (5,464)
____________ ____________ ____________ ____________ ____________
(8,362) 707 9,476 14,802 7,357
____________ ____________ ____________ ____________ ____________
Earnings from continuing operations
before income taxes 40,266 69,413 79,465 68,536 95,176
Income taxes (Note (b)) 12,376 24,753 28,278 24,413 31,131
____________ ____________ ____________ ____________ ____________
Earnings from continuing operations 27,890 44,660 51,187 44,123 64,045
Discontinued operations 3,099 -- -- -- --
____________ ____________ ____________ ____________ ____________
Earnings before extraordinary
item and cumulative effect
of accounting change 30,989 44,660 51,187 44,123 64,045
Extraordinary loss on early
debt retirement -- (12,250) -- -- --
Cumulative effect of accounting
change (6,640) -- -- -- --
____________ ____________ ____________ ____________ ____________
Net earnings $ 24,349 $ 32,410 $ 51,187 $ 44,123 $ 64,045
============ ============ ============ ============ ============
Primary and fully-diluted
earnings per common share:
Continuing operations $ .45 $ .72 $ .82 $ .71 $ 1.03
Discontinued operations .05 -- -- -- --
____________ ____________ ____________ ____________ ____________
Earnings before extraordinary
item and cumulative effect
of accounting change .50 .72 .82 .71 1.03
Extraordinary loss on early
debt retirement -- (.20) -- -- --
Cumulative effect of accounting
change (.11) -- -- -- --
____________ ____________ ____________ ____________ ____________
Net earnings $ .39 $ .52 $ .82 $ .71 $ 1.03
============ ============ ============ ============ ============
Weighted average common shares
and equivalents 61,873,573 62,117,501 62,206,014 61,722,788 62,043,256
============ ============ ============ ============ ============
</TABLE>
Notes to Unaudited Pro Forma Condensed Combined Financial Information:
(a) To conform accounting policies regarding certain drydocking costs which
have been capitalized and amortized over periods of 24 to 36 months in
Hornbeck's historical financial statements but are expensed as incurred
by Tidewater. To conform Hornbeck's historical amounts to Tidewater's
policy, other assets have been reduced at December 31, 1995 by
$8,120,000. Marine equipment operating expenses have been increased by
$1,223,000, $5,825,000 and $2,915,000 for the years ended March 31,
1993, 1994 and 1995, respectively, and $2,914,000 and $6,942,000 for the
nine-month periods ended December 31, 1994 and 1995, respectively.
Depreciation expense has been reduced by $1,252,000, $2,110,000 and
$3,740,000 for the years ended March 31, 1993, 1994 and 1995,
respectively, and $3,740,000 and $3,313,000 for the nine-month periods
ended December 31, 1994 and 1995, respectively.
(b) To reflect the income tax expense effect of the pro-forma adjustments
discussed in note (a) above, income tax expense has been increased
(decreased) by $10,000, ($1,300,000) and $289,000 for the years ended
March 31, 1993, 1994 and 1995, respectively, and $289,000 and
($1,270,000) for the nine-month periods ended December 31, 1994 and
1995, respectively. The deferred income tax liability account has been
reduced at December 31, 1995 by $2,842,000 for the net effect of the
adjustments described above.
(c) To give effect to the issuance of 8,475,000 shares (a Conversion
Ratio of .628 shares) of Tidewater Common Stock in exchange for
approximately 13,235,000 shares of Hornbeck Stock. The excess of
par value of the 13,235,000 shares of Hornbeck Stock surrendered upon
consummation of the Merger over par value of the 8,475,000 shares of
Tidewater Common Stock issued upon consummation of the Merger is
credited to additional paid-in capital.
(d) The retained earnings adjustment of $5,278,000 reflects the combined
effect of the adjustments referenced under notes (a) and (b).
(e) The Hornbeck unaudited statements of earnings for the nine months ended
December 31, 1994 and 1995 are as follows:
Nine Months Ended December 31,
______________________________
1994 1995
____________ ___________
(in thousands except
per share data)
Tidewater Marine operating revenues $ 34,329 $ 46,341
___________ ___________
Marine operating costs 17,719 22,815
Depreciation expense 7,734 10,296
General and administrative expenses 2,642 3,273
___________ ___________
28,095 36,384
___________ ___________
6,234 9,957
Other income (expense):
Foreign exchange loss (109) (81)
Gain on sales of assets 736 428
Equity in net earnings of unconsolidated companies 1,139 383
Interest and miscellaneous income 1,209 967
Other expense (111) (18)
Interest expense (631) (1,281)
___________ ___________
2,233 398
___________ ___________
Earnings before income taxes 8,467 10,355
Income taxes 2,346 3,213
___________ ___________
Net earnings $ 6,121 $ 7,142
=========== ===========
Primary and full-diluted earnings per common share $ .45 $ .54
=========== ===========
Weighted average common shares and equivalents 13,460,000 13,344,000
=========== ===========
(f) No provision has been reflected in the unaudited pro forma condensed
combined financial information for direct expenses related to the
Merger, which are expected to approximate $10 million.
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 hereunto duly authorized.
TIDEWATER INC.
By: /s/ Cliffe F. Laborde
________________________
Cliffe F. Laborde
Senior Vice President
and Secretary
Dated: March 28, 1996
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (No. 33-63094 and No. 33-38240) of Tidewater,
Inc. of our report related to the financial statements of Hornbeck
Offshore Services, Inc. dated February 12, 1996 apprearing on page F-2
of this Form 8-K.
Price Waterhouse LLP
March 27, 1996
Houston, Texas
