Harbinger Group Inc.
    Print Page | Close Window

SEC Filings

10-Q
HRG GROUP, INC. filed this Form 10-Q on 05/15/1995
Entire Document
 << Previous Page | Next Page >>
<PAGE>
 

I
TEM 2.               MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



LIQUIDITY AND CAPITAL RESOURCES

     At March 31, 1995, Zapata's long-term debt of $51.3 million compared
favorably to working capital of $85.9 million and stockholders' equity of $150.3
million.  During March 1995, Zapata sold its remaining 673,077 shares of
Tidewater Inc. ("Tidewater") common stock for $12.7 million.  In April 1995,
Zapata used the proceeds from this sale to reduce the Company's $17.5 million in
notes due to Norex America, Inc. in May 1996.  Remaining mandatory principal
payments for the next twelve months total $2.5 million.

     Cash used by operating activities increased to $3.8 million during the
first six months of fiscal 1995 from $762,000 during the corresponding prior-
year period.  This increase was primarily due to increases in working capital.
Cash used by investing activities totalled $4.3 million during the first six
months of fiscal 1995 as compared to the $82.6 million provided during the first
six months of fiscal 1994.  The fiscal 1994 period included $85.9 million from
the sale of 4.13 million shares of Zapata's Tidewater common stock.  Net cash
provided by financing activities totalled $284,000 during the first six months
of fiscal 1995 as compared to a net use of $69.3 million in the corresponding
prior-year period, which included a $68.5 million prepayment of senior debt.

     In April 1995, Zapata repurchased 2.25 million shares of
Zapata's common stock from Norex America, Inc. for $4.00 per share.  The shares
repurchased by Zapata represented 7% of the Company's then outstanding common
stock.  Following the repurchase of these shares, Zapata had approximately 29.5
million shares of common stock outstanding.

     In April 1995, Zapata announced that the Company is considering
the sale of its two natural gas services businesses: the natural gas compression
operation and the natural gas gathering and processing operation.  The decision
to consider exiting the energy industry is based on the belief that businesses
outside the energy industry may provide better opportunities for the Company to
pursue. Due to the preliminary nature of this decision process, the financial
statement impact of the ultimate disposition or retention of these businesses
cannot be determined at this time. The decision to consider redirecting
operations away from the energy industry does not imply a decision to liquidate
Zapata. The Company is evaluating opportunities to reinvest the shareholders'
capital.

     The Company has cancelled the sale of the marine protein division.  Zapata
had previously announced that an agreement to sell its marine protein operations
for $56 million in cash and approximately $11 million in assumed obligations had
been reached with a group led by current management of the marine protein
operation.  However, the acquisition group was unable to close the transaction
by the scheduled closing date after all conditions precedent to the closing had
been met.  The acquisition group's inability to close was apparently due to the
inability of its financing source to provide proper funding on a timely basis.
The Company is studying alternatives for the marine protein operation at this
time.

                                       10

 << Previous Page | Next Page >>