UNITED STATES
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) April 20, 2000
SUPERIOR ENERGY SERVICES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 0-20310 75-2379388
(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
1105 Peters Road, Harvey, Louisiana 70058
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(504) 362-4321
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(b) Pro Forma Financial Information - unaudited
On July 15, 1999, a subsidiary of Superior Energy Services, Inc.
("Superior") merged (the "Merger") with Cardinal Holding Corp.
("Cardinal"). As a result of the Merger, Cardinal became a subsidiary of
Superior. However, the Merger was treated, for accounting purposes, as if
Superior was acquired by Cardinal in a purchase transaction. In addition,
on November 1, 1999, Superior acquired (the "PMI Acquisition") Production
Management Companies, Inc. ("PMI").
The following unaudited pro forma condensed financial information for
the year ended December 31, 1999 has been prepared by management assuming
that the Merger and the PMI Acquisition occurred on January 1, 1999. In
preparing the information, management has utilized the following financial
statements:
(A) the historical financial statements of Superior as of December 31,
1999, which as a result of the accounting treatment of the Merger and
the PMI Acquisition reflect (a) the results of Cardinal's operations
through the date of the Merger, (b) the results of the combined
operations of Cardinal and Superior following the Merger but prior to
the PMI Acquisition and (c) the results of the combined operations of
Cardinal, Superior and PMI following the PMI Acquisition;
(B) the financial statements of Superior prior to the Merger; and
(C) the financial statements of PMI prior to the PMI Acquisition.
The pro forma adjustments that have been made to reflect the assumption
that the Merger and PMI Acquisition occurred on January 1, 1999 are
described in the accompanying notes and are based upon estimates and
certain assumptions that management of the companies believes reasonable
under the circumstances.
The unaudited pro forma condensed financial information is for
comparative purposes only and does not purport to be indicative of the
results which would actually have been obtained had the Merger and the PMI
Acquisition been effected on January 1, 1999, or of the results which may
be obtained in the future. The unaudited pro forma condensed financial
information, in the opinion of management, reflects all adjustments
necessary to present fairly the data for such period.
Superior Energy Services, Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the year ended December 31, 1999
(in thousands, except per share amounts)
PRE-
HISTORICAL PRE-MERGER ACQUISITION
SUPERIOR SUPERIOR PMI (NOTE) ADJUSTMENTS PRO FORMA
-----------------------------------------------------------------------------
Revenues $ 113,076 $ 34,035 $ 44,323 A $ (122) $ 191,312
------------------------------------- ---------
Costs and expenses:
Costs of services 67,364 13,579 39,480 A (122) 120,301
Depreciation and amortization 12,625 4,135 1,058 B 766 18,584
General and administrative 23,071 13,146 2,941 39,158
------------------------------------- ---------
Total costs and expenses 103,060 30,860 43,479 178,043
------------------------------------- ---------
Income from operations 10,016 3,175 844 13,269
Other income (expense):
Interest expense (12,969) (691) (624) C 1,528 (12,756)
Interest income 308 308
Other - - - -
------------------------------------- ---------
Income before income tax (2,645) 2,484 220 821
Provision for income taxes (611) 399 49 D 475 312
------------------------------------- ---------
Income (loss) before extraordinary losses $ (2,034) $ 2,085 $ 171 $ 509
===================================== =========
Net income (loss) per common share and
common share equivalent $ (0.11) $ 0.01
========= =========
Basic Weighted average shares outstanding 31,131 59,730
========= =========
Net income (loss) per common share and
common share equivalent $ (0.11) $ 0.01
========= =========
Diluted Weighted average shares outstanding 31,131 59,987
========= =========
(A) The record the elimination of intercompany transactions.
(B) In the Merger, Superior exchanged approximately 30 million shares of
Superior common stock for 100% of the outstanding stock of Cardinal.
The valuation of Superior's net assets were based upon the approximate
28.8 million shares of Superior Common Stock outstanding prior to the
merger times the trading price of $3.78 at the time of negotiation of
the Merger, plus additional capitalized costs of approximately $3
million related to the Cardinal merger costs for professional fees net
of $2 million in Superior merger costs. Superior's historical book
basis for its property and equipment was considered to be its fair
market value. This valuation reflects excess purchase price of $31.6
million, over the fair value of net assets, which has been recorded as
goodwill.
In the PMI Acquisition, Superior acquired PMI for aggregate
consideration of $3 million in cash and 610,000 shares of Superior's
common stock at the trading price of $5.66 at the time of negotiation
of the Merger. The purchase price allocated to net assets was $3.5
million, and the excess purchase price of approximately $3 million,
over the fair value of net assets, was recorded as goodwill.
This adjustment reflects the increase in amortization as a result of
goodwill, described above, amortized over 30 years and non compete
agreements of approximately $1 million entered into as a result of the
Merger amortized over 4 years as follows:
Additional goodwill amortization from the Merger $ 565
Additional goodwill amortization from the PMI Acquisition 80
Amortization of non-competes 121
-----
$ 766
(C) To record the net decrease in interest expense resulting from a $55
million equity contribution to Cardinal, used to pay down debt, net
with $10 million in additional debt incurred for the acquisition of
PMI The reduction in interest expense due to the equity contribution
uses Cardinal's borrowing rate of 8.12% and the offsetting increase
due to the debt incurred for the acquisition of PMI, uses Superior's
borrowing rate of 9.12%.
(D) To adjust the provision for income taxes to give effect to the Merger
and PMI Acquisition adjustments, exclusive of the amortization
adjustment.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
SUPERIOR ENERGY SERVICES, INC.
By: /S/ ROBERT S. TAYLOR
Robert S. Taylor
Chief Financial Officer
Dated: April 20, 2000
