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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _________ TO _________
COMMISSION FILE NO. 0-20310
SUPERIOR ENERGY SERVICES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 75-2379388
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
1105 Peters Road
Harvey, Louisiana 70058
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (504) 362-4321
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [X] No [ ]
The number of shares of the registrant's common stock outstanding on November 7,
2003 was 74,070,648.
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1
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Quarterly Report on Form 10-Q for
the Quarterly Period Ended September 30, 2003
TABLE OF CONTENTS
Page
----
PART I FINANCIAL INFORMATION
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 12
Item 3. Quantitative and Qualitative Disclosures about Market Risk 17
Item 4. Controls and Procedures 17
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 18
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
September 30, 2003 and December 31, 2002
(in thousands, except share data)
9/30/03 12/31/02
(Unaudited) (Audited)
----------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 20,732 $ 3,480
Accounts receivable - net 117,204 108,352
Income taxes receivable - 6,087
Prepaid insurance and other 15,807 11,663
--------- ---------
Total current assets 153,743 129,582
--------- ---------
Property, plant and equipment - net 425,070 418,047
Goodwill - net 202,305 160,366
Investments in affiliates 12,772 12,343
Other assets - net 7,429 7,282
--------- ---------
Total assets $ 801,319 $ 727,620
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 20,306 $ 21,010
Accrued expenses 61,273 33,871
Income taxes payable 1,401 -
Current maturities of long-term debt 14,210 13,730
--------- ---------
Total current liabilities 97,190 68,611
--------- ---------
Deferred income taxes 82,755 67,333
Long-term debt 259,271 256,334
Stockholders' equity:
Preferred stock of $.01 par value. Authorized,
5,000,000 shares; none issued - -
Common stock of $.001 par value. Authorized, 125,000,000
shares; issued and outstanding, 74,057,509 shares at
September 30, 2003, and 73,819,341 at December 31, 2002 74 74
Additional paid in capital 370,501 368,746
Accumulated other comprehensive income 388 43
Accumulated deficit (8,860) (33,521)
--------- ---------
Total stockholders' equity 362,103 335,342
--------- ---------
Total liabilities and stockholders' equity $ 801,319 $ 727,620
========= =========
See accompanying notes to consolidated financial statements.
3
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
Three and Nine Months Ended September 30, 2003 and 2002
(in thousands, except per share data)
(unaudited)
Three Months Nine Months
2003 2002 2003 2002
--------- --------- --------- ---------
Revenues $ 128,316 $ 107,213 $ 380,368 $ 324,769
--------- --------- --------- ---------
Costs and expenses:
Cost of services 75,449 67,136 219,897 188,514
Depreciation and amortization 12,174 10,295 36,001 30,273
General and administrative 24,195 21,279 71,573 63,918
--------- --------- --------- ---------
Total costs and expenses 111,818 98,710 327,471 282,705
--------- --------- --------- ---------
Income from operations 16,498 8,503 52,897 42,064
Other income (expense):
Interest expense, net (5,611) (5,452) (16,693) (15,857)
Other income 2,762 -- 2,762 -
Equity in income of affiliates, net 60 113 492 258
--------- --------- --------- ---------
Income before income taxes 13,709 3,164 39,458 26,465
Income taxes 4,883 1,218 14,797 10,189
--------- --------- --------- ---------
Net income $ 8,826 $ 1,946 $ 24,661 $ 16,276
========= ========= ========= =========
Basic earnings per share $ 0.12 $ 0.03 $ 0.33 $ 0.22
========= ========= ========= =========
Diluted earnings per share $ 0.12 $ 0.03 $ 0.33 $ 0.22
========= ========= ========= =========
Weighted average common shares used
in computing earnings per share:
Basic 74,035 73,765 73,933 72,615
Incremental common shares from stock options 1,134 778 1,019 1,019
--------- --------- --------- ---------
Diluted 75,169 74,543 74,952 73,634
========= ========= ========= =========
See accompanying notes to consolidated financial statements.
4
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2003 and 2002
(in thousands)
(unaudited)
2003 2002
-------- --------
Cash flows from operating activities:
Net income $ 24,661 $ 16,276
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 36,001 30,273
Deferred income taxes 11,687 16,630
Equity in income of affiliates, net (492) (258)
Other income (2,762) -
Changes in operating assets and liabilities,
net of acquisitions:
Accounts receivable (5,754) 16,481
Other - net 419 (1,247)
Accounts payable (1,727) (17,060)
Accrued expenses 9,061 6,436
Income taxes 7,169 8,122
-------- --------
Net cash provided by operating activities 78,263 75,653
-------- --------
Cash flows from investing activities:
Payments for purchases of property and equipment (36,467) (80,506)
Acquisitions of businesses, net of cash acquired (8,549) (2,065)
Cash proceeds from asset dispositions 313 -
Cash proceeds from insurance settlement 8,000 -
-------- --------
Net cash used in investing activities (36,703) (82,571)
-------- --------
Cash flows from financing activities:
Net payments on revolving credit facility (9,250) (5,900)
Proceeds from long-term debt 23,000 9,507
Principal payments on long-term debt (39,334) (34,723)
Debt acquisition costs (479) (1,326)
Proceeds from issuance of stock - 38,836
Proceeds from exercise of stock options 1,755 1,421
-------- --------
Net cash provided by (used in) financing activities (24,308) 7,815
-------- --------
Net increase in cash 17,252 897
Cash and cash equivalents at beginning of period 3,480 3,769
-------- --------
Cash and cash equivalents at end of period $ 20,732 $ 4,666
======== ========
See accompanying notes to consolidated financial statements.
5
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements
Nine Months Ended September 30, 2003 and 2002
(1) Basis of Presentation
Certain information and footnote disclosures normally in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to the rules and regulations of the Securities and
Exchange Commission; however, management believes the disclosures which are made
are adequate to make the information presented not misleading. These financial
statements and footnotes should be read in conjunction with the financial
statements and notes thereto included in Superior Energy Services, Inc.'s Annual
Report on Form 10-K for the year ended December 31, 2002 and Management's
Discussion and Analysis of Financial Condition and Results of Operations.
The financial information of Superior Energy Services, Inc. and subsidiaries
(the Company) for the three and nine months ended September 30, 2003 and 2002
has not been audited. However, in the opinion of management, all adjustments
(which include only normal recurring adjustments) necessary to present fairly
the results of operations for the periods presented have been included therein.
The results of operations for the first nine months of the year are not
necessarily indicative of the results of operations that might be expected for
the entire year. Certain previously reported amounts have been reclassified to
conform to the 2003 presentation.
(2) Stock Based Compensation
The Company accounts for its stock based compensation under the principles
prescribed by the Accounting Principles Board's (Opinion No. 25), "Accounting
for Stock Issued to Employees." However, Statement of Financial Accounting
Standards No. 123 (FAS No. 123), "Accounting for Stock-Based Compensation"
permits the continued use of the intrinsic-value based method prescribed by
Opinion No. 25 but requires additional disclosures, including pro forma
calculations of earnings and net earnings per share as if the fair value method
of accounting prescribed by FAS No. 123 had been applied. No stock based
compensation costs are reflected in net income, as all options granted under
those plans had an exercise price equal to the market value of the underlying
common stock on the date of the grant. As required by Statement of Financial
Accounting Standards No. 148 (FAS No. 148), "Accounting for Stock Based
Compensation - Transition and Disclosure," which amended FAS No. 123, the
following table illustrates the effect on net income and earnings per share if
the Company had applied the fair value recognition provisions of FAS No. 123 to
stock based employee compensation. The pro forma data presented below is not
representative of the effects on reported amounts for future years (amounts are
in thousands, except per share amounts).
6
Three Months Ended September 30, Nine Months Ended September 30,
2003 2002 2003 2002
--------- --------- ---------- ----------
Net income, as reported $ 8,826 $ 1,946 $ 24,661 $ 16,276
Stock-based employee compensation
expense, net of tax (692) (808) (1,977) (2,265)
--------- --------- ---------- ----------
Pro forma net income $ 8,134 $ 1,138 $ 22,684 $ 14,011
========= ========= ========== ==========
Basic earnings per share:
Earnings, as reported $ 0.12 $ 0.03 $ 0.33 $ 0.22
Stock-based employee compensation
expense, net of tax (0.01) (0.01) (0.03) (0.03)
--------- --------- ---------- ----------
Pro forma earnings per share $ 0.11 $ 0.02 $ 0.30 $ 0.19
========= ========= ========== ==========
Diluted earnings per share:
Earnings, as reported $ 0.12 $ 0.03 $ 0.33 $ 0.22
Stock-based employee compensation
expense, net of tax (0.01) (0.01) (0.03) (0.03)
--------- --------- ---------- ----------
Pro forma earnings per share $ 0.11 $ 0.02 $ 0.30 $ 0.19
========= ========= ========== ==========
Black-Scholes option pricing model assumptions:
Risk free interest rate 3.10% 2.94% 2.65% 2.94%
Expected life (years) 3 3 3 3
Volatility 58.46% 85.48% 58.61% 85.48%
Dividend yield - - - -
(3) Earnings per Share
Basic earnings per share is computed by dividing income available to common
stockholders by the weighted average number of common shares outstanding during
the period. Diluted earnings per share is computed in the same manner as basic
earnings per share except that the denominator is increased to include the
number of additional common shares that could have been outstanding assuming the
exercise of stock options that would have a dilutive effect on earnings per
share.
(4) Other Income
As the result of a tropical storm, one of the Company's 200-foot class liftboats
sank in the Gulf of Mexico on June 30, 2003. During the third quarter of 2003,
the vessel was declared a total loss and the Company received $8 million of
insurance proceeds for the vessel. As a result, the Company recorded a gain from
the insurance proceeds of $2.8 million, which is included in other income in the
quarter ended September 30, 2003.
(5) Business Combinations
On August 15, 2003, the Company acquired Premier Oilfield Services, Ltd.
(Premier), an Aberdeen, Scotland-based provider of oilfield equipment rentals,
in order to geographically expand the Company's operations and the rental tool
segment. The Company paid $3.4 million ((pound)2.1 million) in cash
consideration for Premier, including transaction costs, and paid an additional
$29.0 million ((pound)18.1 million) to repay its existing debt, concurrently
with the acquisition. The acquisition has been accounted for as a purchase and
the acquired assets and liabilities have been preliminarily valued at their
estimated fair market values. The Company has initially recorded approximately
$19.1 million in goodwill related to this transaction pending finalization of
valuation of fixed assets and tax considerations. The results of operations of
Premier have been included from the acquisition date. The pro forma effect of
operations of the acquisition when included as of the beginning of the periods
presented was not material to the Consolidated Statements of Operations of the
Company.
7
On August 28, 2003, the Company sold its construction-related assets that were
included in the other oilfield services segment for $1.25 million. The Company
received $312,500 in cash for the sale and a note receivable for the remaining
$937,500. There was no gain or loss recorded on the sale. These assets generated
approximately $18.5 million and $18.7 million of the Company's revenues in the
nine months ended September 30, 2003 and 2002, respectively.
In the year ended December 31, 2002, the Company made two acquisitions. In
January, the Company acquired an environmental services company by converting
$18.6 million of notes and other receivables into ownership of the company. In
December, the Company acquired a rental tool business for $5.6 million in cash
consideration. The Company paid an additional $928,000 for this acquisition in
the second quarter of 2003 in conjunction with the receipt of the title to a
facility for this business. Both of these acquisitions have been accounted for
as purchases and the results of operations have been included from the
respective acquisition dates.
Most of the Company's acquisitions have involved additional contingent
consideration based upon a multiple of the acquired companies' respective
average earnings before interest, income taxes, depreciation and amortization
expense (EBITDA) over a three-year period from the respective date of
acquisition. While the amounts of additional consideration payable depend upon
the acquired company's operating performance and are difficult to predict
accurately, the maximum additional consideration payable for the Company's
remaining acquisitions will be approximately $16.1 million, which will be
determined in the second quarter of 2004 and payable during the second half of
2004. These amounts are not classified as liabilities under generally accepted
accounting principles and are not reflected in the Company's financial
statements until the amounts are fixed and determinable. With the exception of
the Company's guarantee of Lamb Energy Services' credit facility (see note 7 to
the unaudited consolidated financial statements), the Company does not have any
other financing arrangements that are not required under generally accepted
accounting principles to be reflected in its financial statements. When amounts
are determined, they are capitalized as part of the purchase price of the
related acquisition. In the nine months ended September 30, 2003, the Company
capitalized additional consideration of $22.8 million related to five of its
acquisitions, of which $5.7 million was paid in the nine months ended September
30, 2003, and $17.1 million will be paid by the end of the first quarter of
2004.
(6) Segment Information
The Company's reportable segments are as follows: well intervention group,
marine, rental tools and other oilfield services. Each segment offers products
and services within the oilfield services industry. The well intervention group
segment provides plug and abandonment services, coiled tubing services, well
pumping and stimulation services, data acquisition services, gas lift services,
electric wireline services, hydraulic drilling and workover services, well
control services and mechanical wireline services that perform a variety of
ongoing maintenance and repairs to producing wells, as well as modifications to
enhance the production capacity and life span of the well. The marine segment
operates liftboats for oil and gas production facility maintenance, construction
operations and platform removals, as well as production service activities. The
rental tools segment rents and sells specialized equipment for use with onshore
and offshore oil and gas well drilling, completion, production and workover
activities. The other oilfield services segment provides contract operations and
maintenance services, interconnect piping services, sandblasting and painting
maintenance services, transportation and logistics services, offshore oil and
gas cleaning services, oilfield waste treatment services, dockside cleaning of
items, including supply boats, cutting boxes, and process equipment, and
manufactures and sells drilling instrumentation and oil spill containment
equipment. All of the segments operate primarily in the Gulf of Mexico.
Summarized financial information concerning the Company's segments for the three
and nine months ended September 30, 2003 and 2002 is shown in the following
tables (in thousands):
8
Three Months Ended September 30, 2003
Other
Well Rental Oilfield Unallocated Consolidated
Intervention Marine Tools Services Amount Total
------------------------------------------------------------------------------------
Revenues $ 50,264 $ 17,260 $ 35,351 $ 25,441 $ - $128,316
Cost of services 29,811 12,443 11,509 21,686 - 75,449
Depreciation and amortization 3,011 1,746 6,433 984 - 12,174
General and administrative 10,139 1,611 8,579 3,866 - 24,195
Operating income 7,303 1,460 8,830 (1,095) - 16,498
Interest expense, net - - - - (5,611) (5,611)
Equity in income of affiliates, net - - 60 - - 60
Other income - 2,762 - - - 2,762
------------------------------------------------------------------------------------
Income (loss) before income taxes $ 7,303 $ 4,222 $ 8,890 $ (1,095) $ (5,611) $ 13,709
====================================================================================
Three Months Ended September 30, 2002
Other
Well Rental Oilfield Unallocated Consolidated
Intervention Marine Tools Services Amount Total
------------------------------------------------------------------------------------
Revenues $ 36,115 $ 14,326 $ 29,401 $ 27,371 $ - $107,213
Cost of services 24,414 11,456 9,373 21,893 - 67,136
Depreciation and amortization 2,742 1,422 5,036 1,095 - 10,295
General and administrative 8,432 1,704 7,337 3,806 - 21,279
Operating income 527 (256) 7,655 577 - 8,503
Interest expense, net - - - - (5,452) (5,452)
Equity in income of affiliates, net - - 113 - - 113
------------------------------------------------------------------------------------
Income (loss) before income taxes $ 527 $ (256) $ 7,768 $ 577 $ (5,452) $ 3,164
===================================================================================
Nine Months Ended September 30, 2003
Other
Well Rental Oilfield Unallocated Consolidated
Intervention Marine Tools Services Amount Total
-----------------------------------------------------------------------------------------
Revenues $ 138,079 $ 54,412 $ 106,347 $ 81,530 $ - $ 380,368
Cost of services 82,894 37,777 34,005 65,221 - 219,897
Depreciation and amortization 9,041 5,028 18,737 3,195 - 36,001
General and administrative 29,399 5,531 25,084 11,559 - 71,573
Operating income 16,745 6,076 28,521 1,555 - 52,897
Interest expense, net - - - - (16,693) (16,693)
Equity in income of affiliates, net - - 492 - - 492
Other income - 2,762 - - - 2,762
--------------------------------------------------------------------------------------
Income (loss) before income taxes $ 16,745 $ 8,838 $ 29,013 $ 1,555 $ (16,693) $ 39,458
======================================================================================
9
Nine Months Ended September 30, 2002
Other
Well Rental Oilfield Unallocated Consolidated
Intervention Marine Tools Services Amount Total
-----------------------------------------------------------------------------------------
Revenues $ 112,589 $ 46,672 $ 90,676 $ 74,832 $ - $ 324,769
Cost of services 69,489 31,965 27,761 59,299 - 188,514
Depreciation and amortization 7,953 4,564 14,431 3,325 - 30,273
General and administrative 25,828 5,078 22,327 10,685 - 63,918
Operating income 9,319 5,065 26,157 1,523 - 42,064
Interest expense, net - - - - (15,857) (15,857)
Equity in income of affiliates, net - - 258 - - 258
-------------------------------------------------------------------------------------
Income (loss) before income taxes $ 9,319 $ 5,065 $ 26,415 $ 1,523 $ (15,857) $ 26,465
=====================================================================================
(7) Debt
The Company has outstanding $200 million of 8 7/8% senior notes due 2011. The
indenture governing the senior notes requires semi-annual interest payments,
which commenced November 15, 2001 and continue through the maturity date of May
15, 2011. The indenture governing the senior notes contains certain covenants
that, among other things, prevent the Company from incurring additional debt,
paying dividends or making other distributions, unless its ratio of cash flow to
interest expense is at least 2.25 to 1, except that the Company may incur
additional debt in an amount equal to 30% of its net tangible assets, which was
approximately $141 million at September 30, 2003. The indenture also contains
covenants that restrict the Company's ability to create certain liens, sell
assets or enter into certain mergers or acquisitions. At September 30, 2003, the
Company was in compliance with all such covenants.
The Company has a bank credit facility which was amended in August 2003. The
amendment increased the balance of the term loans by $23 million to finance the
acquisition of Premier and extended the maturity date of the facility. At
September 30, 2003, the Company has term loans in an aggregate amount of $54.1
million outstanding and a revolving credit facility of $75 million, none of
which was outstanding. The term loans require principal payments of $3.4 million
each quarter through March 31, 2005 and $1.8 million each quarter from June 30,
2005 through June 30, 2008. A lump sum payment of $11.2 million is due on May 2,
2005 and any balance outstanding on the revolving credit facility is due on
August 13, 2006. The credit facility bears interest at a LIBOR rate plus margins
that depend on the Company's leverage ratio. Indebtedness under the credit
facility is secured by substantially all of the Company's assets, including the
pledge of the stock of the Company's principal subsidiaries. The credit facility
contains customary events of default and requires that the Company satisfy
various financial covenants. It also limits the Company's capital expenditures,
its ability to pay dividends or make other distributions, make acquisitions,
make changes to the Company's capital structure, create liens or incur
additional indebtedness. At September 30, 2003, the Company was in compliance
with all such covenants.
The Company has $19.4 million outstanding in U. S. Government guaranteed
long-term financing under Title XI of the Merchant Marine Act of 1936 which is
administered by the Maritime Administration (MARAD) for two 245-foot class
liftboats. The debt bears an interest rate of 6.45% per annum and is payable in
equal semi-annual installments of $405,000, which began December 3, 2002, and
matures on June 3, 2027. The Company's obligations are secured by mortgages on
the two liftboats. In accordance with the agreement, the Company is required to
comply with certain covenants and restrictions, including the maintenance of
minimum net worth and debt-to-equity requirements. At September 30, 2003, the
Company was in compliance with all such covenants.
The Company owns a 54.3% interest in Lamb Energy, which has a credit facility
with a syndicate of banks that matures in 2005 consisting of a term loan in the
amount of $10 million outstanding at September 30, 2003, and a revolving credit
facility of $3 million, none of which was outstanding at September 30, 2003. The
Company fully guarantees amounts due under the credit facility. The Company does
not expect to incur any losses as a result of the guarantee.
10
(8) Commitments and Contingencies
From time to time, the Company is involved in litigation and other disputes
arising out of operations in the normal course of business. In management's
opinion, the Company is not involved in any litigation or disputes, the outcome
of which would have a material effect on the financial position, results of
operations or liquidity of the Company.
(9) Accounting Pronouncements
In January 2003, the Financial Accounting Standards Board issued FASB
Interpretation No. 46 (FIN 46), "Consolidation of Variable Interest Entities."
FIN 46 clarifies the application of Accounting Research Bulletin Number 51,
"Consolidated Financial Statements," to certain entities in which equity
investors do not have the characteristics of a controlling financial interest or
do not have sufficient equity at risk for the entity to finance its activities
without additional subordinated financial support from other parties. FIN 46
applies immediately to variable interest entities created after January 31,
2003, and to variable interest entities in which an enterprise obtains an
interest after that date. It applies in the second fiscal year or interim period
beginning after December 15, 2003, to variable entities in which an enterprise
holds a variable interest that it acquired before February 1, 2003. FIN 46
applies to public enterprises as of the beginning of the applicable interim or
annual period. The Company does not expect the adoption of FIN 46 to have a
significant effect on the Company's financial position or results of operations.
In April 2003, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 149 (FAS No. 149), "Amendment of Statement
133 on Derivative Instruments and Hedging Activities." FAS No. 149 amends and
clarifies financial accounting and reporting for derivative instruments,
including certain derivative instruments embedded in other contracts
(collectively referred to as derivatives) and for hedging activities under
Statement of Financial Accounting Standards No. 133 (FAS No. 133), "Accounting
for Derivative Instruments and Hedging Activities." FAS No. 149 is effective for
contracts entered into or modified after September 30, 2003. The adoption of FAS
No. 149 did not have a significant effect on the Company's financial position or
results of operations.
In May 2003, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 150 (FAS No. 150), "Accounting for Certain
Financial Instruments with Characteristics of Both Liabilities and Equity." FAS
No. 150 establishes standards for the classification and measurement of certain
financial instruments with characteristics of both liabilities and equity. FAS
No. 150 is effective for financial instruments entered into or modified after
May 31, 2003. The adoption of FAS No. 150 did not have a significant effect on
the Company's financial position or results of operations.
11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FORWARD-LOOKING STATEMENTS
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" contains forward-looking statements which involve risks and
uncertainties. All statements other than statements of historical fact included
in this section regarding our financial position and liquidity, strategic
alternatives, future capital needs, business strategies and other plans and
objectives of our management for future operations and activities, are
forward-looking statements. These statements are based on certain assumptions
and analyses made by our management in light of its experience and its
perception of historical trends, current conditions, expected future
developments and other factors it believes are appropriate under the
circumstances. Such forward-looking statements are subject to uncertainties that
could cause our actual results to differ materially from such statements. Such
uncertainties include but are not limited to: the volatility of the oil and gas
industry, including the level of offshore exploration, production and
development activity; risks of our growth strategy, including the risks of rapid
growth and the risks inherent in acquiring businesses; changes in competitive
factors affecting our operations; operating hazards, including the significant
possibility of accidents resulting in personal injury, property damage or
environmental damage; the effect on our performance of regulatory programs and
environmental matters; seasonality of the offshore industry in the Gulf of
Mexico; and our dependence on certain customers. These and other uncertainties
related to our business are described in detail in our Annual Report on Form
10-K for the year ended December 31, 2002. Although we believe that the
expectations reflected in such forward-looking statements are reasonable, we can
give no assurance that such expectations will prove to be correct. You are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date hereof. We undertake no obligation to update any of
our forward-looking statements for any reason.
OVERVIEW
We are a leading provider of specialized oilfield services and equipment focused
on serving the production-related needs of oil and gas companies primarily in
the Gulf of Mexico. We believe that we are one of the few companies in the Gulf
of Mexico capable of providing most of the post wellhead products and services
necessary to maintain offshore producing wells, as well as the plug and
abandonment services necessary at the end of their life cycle. We believe that
our ability to provide our customers with multiple services and to coordinate
and integrate their delivery from our liftboats allows us to maximize
efficiency, reduce lead time and provide cost-effective services for our
customers.
Over the past several years, we have significantly expanded the range of
production-related services we provide and the geographic scope of our
operations through both internal growth and strategic acquisitions. We have
expanded our geographic focus to select international market areas and added
complementary product and service offerings. Currently, we provide a full range
of products and services for our customers, including well intervention
services, marine services, rental tools and other oilfield services. For
additional segment financial information, see note 6 to our unaudited
consolidated financial statements.
Our financial performance is impacted by the broader economic trends affecting
our customers. The demand for our services and equipment is cyclical due to the
nature of the energy industry. Our operating results are directly tied to
industry demand for our services, most of which are performed on the outer
continental shelf in the Gulf of Mexico. While we have focused on providing
production-related services and renting drilling-related equipment where,
historically, demand has not been as volatile as for exploration-related
services, we expect our operating results to be highly dependent upon industry
activity levels in the Gulf of Mexico.
In the third quarter of 2003, activity levels increased for our
production-related services, which offset decreases in demand for our
drilling-related businesses. As a result, revenue increased for many of our well
intervention services in comparison to the second quarter of 2003, offsetting
decreased demand for drilling-related products and services such as rental tools
and non-hazardous oilfield waste treatment services. For the quarter ended
September 30, 2003, revenue remained relatively unchanged at $128.3 million and
net income increased 6% to $8.8 million from the second quarter of 2003. During
the third quarter of 2003, we also recorded $2.8 million of other income related
to the gain on insurance proceeds from the loss of the 200-foot class liftboat,
Superior Challenge.
12
Our well intervention segment's revenue increased to $50.3 million in the third
quarter of 2003 as compared to $46.4 million in the second quarter of 2003.
Activity increased for most well intervention services, including coiled tubing,
hydraulic workover, mechanical wireline and well control services. These were
offset by decreases in activity levels for plug and abandonment and electric
line services.
Our marine segment's revenue decreased 7% to $17.3 million in the third quarter
of 2003 from the second quarter of 2003. This decrease is primarily attributed
to the loss of the 200-foot class liftboat Superior Challenge and the unusually
high number of weather downtime days due to multiple tropical storms in the Gulf
of Mexico. During the quarter, five tropical storms in the Gulf of Mexico either
partially or completely shut down liftboat activity. Several storms occurred
days apart, meaning some of our customers did not restart projects until the
weather improved over a longer period of time so they could avoid mobilization
charges. Our fleet's average utilization rate remained relatively unchanged at
66% from the second quarter of 2003. Our fleet's average dayrate decreased to
$6,240 in the third quarter of 2003 from $6,430 in the second quarter of 2003.
The lower average dayrate was attributable to lower dayrates for some of our
larger liftboat classes, particularly the 230-foot to 245-foot and 250-foot
class liftboats.
The revenue for our rental tools segment decreased to $35.4 million in the third
quarter of 2003, as compared to $36.4 million in the second quarter of 2003.
Rental activity for drill pipe, stabilizers and related equipment was lower as a
result of lower oil and gas drilling activity in the shallow water Gulf of
Mexico and changes in timing on certain deepwater Gulf of Mexico projects.
Our other oilfield services segment's revenue was $25.4 million, an 8% decrease
over the second quarter of 2003. The decrease in revenue was attributable to the
sale of the Company's construction-related assets and lower activity for
drilling-related environmental services, such as non-hazardous oilfield waste
treatment.
COMPARISON OF THE RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30,
2003 AND 2002
For the three months ended September 30, 2003, our revenues were $128.3 million
resulting in net income of $8.8 million or $0.12 diluted earnings per share. For
the three months ended September 30, 2002, revenues were $107.2 million and net
income was $1.9 million or $0.03 diluted earnings per share. Our increase in
revenue and net income are primarily the result of increased activity levels as
compared to the third quarter of last year when activity levels were lower and
two hurricanes shut down activity in the Gulf of Mexico in September, which
negatively impacted all of the segments of our business. The following
discussion analyzes our operating results on a segment basis.
WELL INTERVENTION SEGMENT
Revenue for our well intervention group was $50.3 million for the three months
ended September 30, 2003, as compared to $36.1 million for the same period in
2002. This segment's gross margin percentage increased to 41% in the three
months ended September 30, 2003 from 32% in the three months ended September 30,
2002. The increase in revenue and gross margin percentage is the result of
increased demand for almost all of our services as a result of increased
production-related activity.
MARINE SEGMENT
Our marine revenue for the three months ended September 30, 2003 increased 20%
over the same period in 2002 to $17.3 million. The fleet's average dayrate
increased to $6,240 in the third quarter of 2003 from $5,410 in the third
quarter of 2002, and the average utilization increased to 66% for the third
quarter of 2003 from 63% in the same period in 2002. The gross margin percentage
for the three months ended September 30, 2003 increased to 28% from 20% for the
same period in 2002. Higher utilization was due to an increase in
production-related activity and the absence of the more severe hurricanes that
existed in the third quarter of 2002.
RENTAL TOOLS SEGMENT
Revenue for our rental tools segment for the three months ended September 30,
2003 was $35.4 million, a 20% increase over the same period in 2002. The
increase in this segment's revenue was primarily due to an increased demand for
our expanded inventory of rental tool equipment and our geographic expansion.
During the quarter,
13
revenue from international markets grew as we acquired Premier, an Aberdeen,
Scotland-based provider of oilfield equipment rentals, and continue to diversify
outside of the Gulf of Mexico market area. The gross margin percentage decreased
slightly to 67% in the three months ended September 30, 2003 from 68% from the
same period in 2002 due to changes in business mix.
OTHER OILFIELD SERVICES SEGMENT
Other oilfield services revenue for the three months ended September 30, 2003
was $25.4 million, a 7% decrease over the $27.4 million in revenue for the same
period in 2002. The gross margin percentage decreased to 15% in the three months
ended September 30, 2003 from 20% in the same period in 2002. The lower revenue
and gross margin percentage are attributable to lower drilling-related activity
which reduced activity in our non-hazardous oilfield waste treatment business
and the sale of our construction and fabrication assets.
DEPRECIATION AND AMORTIZATION
Depreciation and amortization increased to $12.2 million in the three months
ended September 30, 2003 from $10.3 million in the same period in 2002. The
increase resulted mostly from our larger asset base as a result of our capital
expenditures during 2002 and 2003.
GENERAL AND ADMINISTRATIVE
General and administrative expenses increased to $24.2 million for the three
months ended September 30, 2003 from $21.3 million for the same period in 2002.
The increase is primarily the result of our internal growth and expansion.
However, general and administrative expenses as a percentage of revenue
decreased to 19% for the quarter ended September 30, 2003 from 20% for the
quarter ended September 30, 2002.
COMPARISON OF THE RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30,
2003 AND 2002
For the nine months ended September 30, 2003, our revenues were $380.4 million
resulting in net income of $24.7 million or $0.33 diluted earnings per share.
For the nine months ended September 30, 2002, our revenues were $324.8 million
and our net income was $16.3 million or $0.22 diluted earnings per share. Our
increase in revenue and net income is the result of an overall increased demand
for most of our services due to increased activity by our customers. The
following discussion analyzes our operating results on a segment basis.
WELL INTERVENTION SEGMENT
Revenue for our well intervention group was $138.1 million for the nine months
ended September 30, 2003, as compared to $112.6 million for the same period in
2002. This segment's gross margin percentage increased slightly to 40% in the
nine months ended September 30, 2003 from 38% in the nine months ended September
30, 2002. The increase in revenue and gross margin percentage is the result of
increased demand for almost all of our services as production-related activity
in the Gulf of Mexico increased. Our hydraulic workover, well control and
pumping and stimulation services benefited the most from the increased activity
levels.
MARINE SEGMENT
Our marine revenue for the nine months ended September 30, 2003 increased 17%
over the same period in 2002 to $54.4 million. The fleet's average dayrate
increased to $6,400 in the nine months ended September 30, 2003 from $5,580 in
the same period in 2002, and the average utilization decreased slightly to 66%
for the nine months ended September 30, 2003 from 67% in the same period in
2002. The gross margin percentage for the nine months ended September 30, 2003
decreased slightly to 31% from 32% for the same period in 2002. While revenues
and the average dayrate increased because of additions of three larger liftboats
to the fleet during 2002, a drop-off in utilization and the increased costs of
the new liftboats resulted in a lower gross margin percentage. Increased costs,
including maintenance and insurance, also contributed to the decline in gross
margin percentage.
14
RENTAL TOOLS SEGMENT
Revenue for our rental tools segment for the nine months ended September 30,
2003 was $106.3 million, a 17% increase over the same period in 2002. The
increase in this segment's revenue was primarily due to an increased demand for
our expanded inventory of rental tool equipment and our geographic expansion.
During the nine months ended September 30, 2003, revenue from international
markets grew as we continue to diversify outside of the Gulf of Mexico market
area. We acquired Premier, an Aberdeen, Scotland-based provider of oilfield
equipment rentals, in August 2003 to further this diversification. The gross
margin percentage decreased slightly to 68% in the nine months ended September
30, 2003 from 69% in the same period in 2002 due primarily to a change in the
mix of the demand for our rental tools.
OTHER OILFIELD SERVICES SEGMENT
Other oilfield services revenue for the nine months ended September 30, 2003 was
$81.6 million, a 9% increase over the $74.8 million in revenue in the same
period in 2002. The gross margin percentage decreased slightly to 20% in the
nine months ended September 30, 2003 from 21% in the same period in 2002. This
segment generated more revenue primarily from sales of oil spill containment
equipment and growth in our oilfield waste treatment business, but a slightly
lower gross margin percentage due to additional costs associated with the sale
of our construction and fabrication assets and growth and expansion of our
oilfield waste treatment business.
DEPRECIATION AND AMORTIZATION
Depreciation and amortization increased to $36.0 million in the nine months
ended September 30, 2003 from $30.3 million in the same period in 2002. The
increase resulted mostly from our larger asset base as a result of our capital
expenditures during 2002 and 2003.
GENERAL AND ADMINISTRATIVE
General and administrative expenses increased to $71.6 million for the nine
months ended September 30, 2003 from $63.9 million for the same period in 2002.
The increase is primarily the result of our internal growth and expansion.
However, general and administrative expenses as a percentage of revenue
decreased to 19% for the nine months ended September 30, 2003 from 20% for the
same period in 2002.
LIQUIDITY AND CAPITAL RESOURCES
In the nine months ended September 30, 2003, we generated net cash from
operating activities of $78.3 million. Our primary liquidity needs are for
working capital, capital expenditures, debt service and acquisitions. Our
primary sources of liquidity are cash flows from operations and borrowings under
our revolving credit facility. We had cash and cash equivalents of $20.7 million
at September 30, 2003 compared to $3.5 million at December 31, 2002.
We made $36.5 million of capital expenditures during the nine months ended
September 30, 2003, of which approximately $21.6 was used to expand and maintain
our rental tool equipment inventory, approximately $5.8 million was used on
facilities construction (including our facility in Broussard, Louisiana) and
approximately $1.5 million was made in our marine segment. We also made $7.6
million of capital expenditures to expand and maintain the asset base of our
well intervention group and other oilfield services group. We currently believe
that we will make approximately $15 million of capital expenditures, excluding
acquisitions and targeted asset purchases, during the remaining three months of
2003 primarily to further expand our rental tool asset base. We believe that our
current working capital, cash generated from our operations and availability
under our revolving credit facility will provide sufficient funds for our
identified capital projects.
In August 2003, we acquired Premier, an Aberdeen, Scotland-based provider of
oilfield equipment rentals, in order to geographically expand our operations and
the rental tool segment. We paid $3.4 million ((pound)2.1 million) in cash
consideration for Premier, including transaction costs, and paid an additional
$29.0 million ((pound)18.1 million) to repay its existing debt, concurrently
with the acquisition.
15
We have outstanding $200 million of 8 7/8% senior notes due 2011. The indenture
governing the senior notes requires semi-annual interest payments, which
commenced November 15, 2001 and continue through the maturity date of May 15,
2011. The indenture governing the senior notes contains certain covenants that,
among other things, prevent us from incurring additional debt, paying dividends
or making other distributions, unless our ratio of cash flow to interest expense
is at least 2.25 to 1, except that we may incur additional debt in an amount
equal to 30% of our net tangible assets, which was approximately $141 million at
September 30, 2003. The indenture also contains covenants that restrict our
ability to create certain liens, sell assets or enter into certain mergers or
acquisitions.
We also have a bank credit facility which was amended in August 2003. The
amendment increased the balance of the term loans by $23 million to finance the
acquisition of Premier and extended the maturity date of the facility. At
September 30, 2003, we had term loans in an aggregate amount of $54.1 million
outstanding and a revolving credit facility of $75 million, none of which was
outstanding. As of November 7, 2003, these balances were unchanged and the
weighted average interest rate on amounts outstanding under the credit facility
was 3.7% per annum. Indebtedness under the credit facility is secured by
substantially all of our assets, including the pledge of the stock of our
principal subsidiaries. The credit facility contains customary events of default
and requires that we satisfy various financial covenants. It also limits our
capital expenditures, our ability to pay dividends or make other distributions,
make acquisitions, make changes to our capital structure, create liens or incur
additional indebtedness.
We have $19.4 million outstanding at September 30, 2003 in U. S. Government
guaranteed long-term financing under Title XI of the Merchant Marine Act of 1936
which is administered by the Maritime Administration (MARAD) for two 245-foot
class liftboats. This debt bears an interest rate of 6.45% per annum and is
payable in equal semi-annual installments of $405,000, which began December 3,
2002, and matures on June 3, 2027. Our obligations are secured by mortgages on
the two liftboats. In accordance with the agreement, we are required to comply
with certain covenants and restrictions, including the maintenance of minimum
net worth and debt-to-equity requirements.
The following table summarizes our contractual cash obligations and commercial
commitments at September 30, 2003 (amounts in thousands) for our long-term debt
and operating leases. We do not have any other material obligations or
commitments.
Remaining
Three
Months
Description 2003 2004 2005 2006 2007 2008 Thereafter
- -------------------------------------------------------------------------------------------------------------------
Long-term debt $ 3,755 $ 14,210 $20,610 $7,810 $ 7,810 $ 4,310 $214,976
Operating leases 999 3,000 1,838 859 708 286 450
-------------------------------------------------------------------------------------------
Total $ 4,754 $ 17,210 $22,448 $8,669 $ 8,518 $ 4,596 $215,426
-------------------------------------------------------------------------------------------
The table does not include our guarantee of the Lamb Energy Services credit
facility consisting of a $10 million term loan at September 30, 2003 and a $3
million revolving credit facility, none of which was outstanding as of September
30, 2003. This table also does not include any potential additional
consideration that may be payable as a result of our acquisitions. Additional
consideration is generally based on the acquired company's operating performance
after the acquisition as measured by earnings before interest, income taxes,
depreciation and amortization (EBITDA) and other adjustments intended to exclude
extraordinary items. While the amounts of additional consideration payable
depend upon the acquired company's operating performance and are difficult to
predict accurately, the maximum additional consideration payable for the
Company's remaining acquisitions will be approximately $16.1 million, which will
be determined in the second quarter of 2004 and payable during the second half
of 2004. These amounts are not classified as liabilities under generally
accepted accounting principles and are not reflected in the Company's financial
statements until the amounts are fixed and determinable. We do not have any
other financing arrangements that are not required under generally accepted
accounting principles to be reflected in our financial statements. When amounts
are determined, they are capitalized as part of the purchase price of the
related acquisition. In the nine months ended September 30, 2003, we capitalized
additional consideration of $22.8 million related to five of our acquisitions,
of which $5.7 million was paid in the nine months ended September 30, 2003, and
$17.1 million will be paid by the end of the first quarter of 2004.
16
We intend to continue implementing our growth strategy of increasing our scope
of services through both internal growth and strategic acquisitions. We expect
to continue to make the capital expenditures required to implement our growth
strategy in amounts consistent with the amount of cash generated from operating
activities, the availability of additional financing and our credit facility.
Depending on the size of any future acquisitions, we may require additional
equity or debt financing in excess of our current working capital and amounts
available under our revolving credit facility.
NEW ACCOUNTING PRONOUNCEMENTS
In January 2003, the Financial Accounting Standards Board issued FASB
Interpretation No. 46 (FIN 46), "Consolidation of Variable Interest Entities."
FIN 46 clarifies the application of Accounting Research Bulletin Number 51,
"Consolidated Financial Statements," to certain entities in which equity
investors do not have the characteristics of a controlling financial interest or
do not have sufficient equity at risk for the entity to finance its activities
without additional subordinated financial support from other parties. FIN 46
applies immediately to variable interest entities created after January 31,
2003, and to variable interest entities in which an enterprise obtains an
interest after that date. It applies in the second fiscal year or interim period
beginning after December 15, 2003, to variable entities in which an enterprise
holds a variable interest that it acquired before February 1, 2003. FIN 46
applies to public enterprises as of the beginning of the applicable interim or
annual period. We do not expect the adoption of FIN 46 to have a significant
effect on our financial position or results of operations.
In April 2003, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 149 (FAS No. 149), "Amendment of Statement
133 on Derivative Instruments and Hedging Activities." FAS No. 149 amends and
clarifies financial accounting and reporting for derivative instruments,
including certain derivative instruments embedded in other contracts
(collectively referred to as derivatives) and for hedging activities under
Statement of Financial Accounting Standards No. 133 (FAS No. 133), "Accounting
for Derivative Instruments and Hedging Activities." FAS No. 149 is effective for
contracts entered into or modified after September 30, 2003. The adoption of FAS
No. 149 did not have a significant effect on our financial position or results
of operations.
In May 2003, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 150 (FAS No. 150), "Accounting for Certain
Financial Instruments with Characteristics of Both Liabilities and Equity." FAS
No. 150 establishes standards for the classification and measurement of certain
financial instruments with characteristics of both liabilities and equity. FAS
No. 150 is effective for financial instruments entered into or modified after
May 31, 2003. The adoption of FAS No. 150 did not have a significant effect on
our financial position or results of operations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no significant changes in our market risks since the year ended
December 31, 2002. For more information, please read the consolidated financial
statements and notes thereto included in our Annual Report on Form 10-K for the
year ended December 31, 2002.
ITEM 4. CONTROLS AND PROCEDURES
As of the end of the period covered by this quarterly report on Form 10-Q, based
on the evaluation conducted by our chief financial officer and chief executive
officer, they have concluded that our disclosure controls and procedures (as
defined in rules 13a-14c promulgated under the Securities Exchange Act of 1934,
as amended) are effective and designed to alert them to material information
relating to the Company.
There were no material changes to the Company's system of internal controls over
financial reporting or in other factors that have materially affected or are
reasonably likely to materially affect those internal controls subsequent to the
date of our most recent evaluation.
17
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are filed with this Form 10-Q:
3.1 Certificate of Incorporation of the Company (incorporated herein
by reference to the Company's Quarterly Report on Form 10-QSB for
the quarter ended March 31, 1996).
3.2 Certificate of Amendment to the Company's Certificate of
Incorporation (incorporated herein by reference to the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30,
1999).
3.3 Amended and Restated Bylaws (incorporated herein by reference to
the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1999).
10.1 Amended and Restated Credit Agreement dated as of August 13, 2003
among SESI, L.L.C., as borrower, Superior Energy Services, Inc.,
as parent, Bank One, NA as agent, Wells Fargo Bank Texas, N.A. as
syndication agent, Whitney National Bank as documentation agent,
and the lenders party thereto.
31.1 Officer's certification pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
31.2 Officer's certification pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
32.1 Officer's certification pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
32.2 Officer's certification pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K. The following reports on Form 8-K were filed
during the quarter ended September 30, 2003:
On August 5, 2003, the Company filed a current report on Form 8-K
reporting, under item 5, the announcement of earnings for the second
quarter ended June 30, 2003.
On August 12, 2003, the Company filed a current report on Form 8-K
reporting, under item 5, that it has elected Mr. Enoch Dawkins to the
Company's Board of Directors.
On August 18, 2003, the Company filed a current report on Form 8-K
reporting, under item 5, that it acquired Premier Oilfield Services,
Ltd., an Aberdeen-based provider of oilfield equipment rentals.
18
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.
SUPERIOR ENERGY SERVICES, INC.
Date: November 13 , 2003 By: /s/ Robert S. Taylor
-------------------------------------------
Robert S. Taylor
Chief Financial Officer
(Principal Financial and Accounting Officer)
19
EXHIBIT INDEX
3.1 Certificate of Incorporation of the Company (incorporated herein
by reference to the Company's Quarterly Report on Form 10-QSB for
the quarter ended March 31, 1996).
3.2 Certificate of Amendment to the Company's Certificate of
Incorporation (incorporated herein by reference to the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30,
1999).
3.3 Amended and Restated Bylaws (incorporated herein by reference to
the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1999).
10.1 Amended and Restated Credit Agreement dated as of August 13, 2003
among SESI, L.L.C., as borrower, Superior Energy Services, Inc.,
as parent, Bank One, NA as agent, Wells Fargo Bank Texas, N.A. as
syndication agent, Whitney National Bank as documentation agent,
and the lenders party thereto.
31.1 Officer's certification pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
31.2 Officer's certification pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
32.1 Officer's certification pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
32.2 Officer's certification pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.