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<CAPTION>
TWELVE MONTHS ENDED
NINE MONTHS SEPTEMBER 30,
ENDED --------------------------
JUNE 30, 1995 1994 1993
-------------- ---------- -----------
(IN THOUSANDS, EXCEPT % AMOUNTS)
<S> <C> <C> <C>
CUSTOMER PACKAGE SALES:
Domestic $18,277 $21,397 $16,727
International 3,602 8,445 5,293
------- ------- -------
Total $21,879 $29,842 $22,020
======= ======= =======
PERCENT OF TOTAL SALES:
Domestic 83.5% 71.7% 76.0%
International 16.5% 28.3% 24.0%
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Energy Industries has entered into an agreement whereby it is an exclusive
supplier of gas compressor packages and parts to Enserv in Canada. This
agreement runs through October 1996.
Additionally, Energy Industries has entered into a marketing agreement with
Atlas Copco, headquartered in Belgium, for package sales outside North America.
As compensation for use of its worldwide marketing and distribution network,
Atlas Copco receives a commission on all such international sales of Energy
Industries' equipment. This agreement runs through 1998 and is subject to
automatic annual renewal unless notice is given of a party's desire to terminate
the relationship.
Competition. The principal competitive factors in natural gas compression
markets are price, service, availability and delivery time. Energy Industries
operates in a highly competitive environment and competes with a large number of
companies, some of which are larger and have greater resources than Energy
Industries.
Facilities and Real Estate. Energy Industries owns facilities and related
real estate in Houston, Midland and Corpus Christi, Texas, Oklahoma City,
Oklahoma and Lafayette, Louisiana. The main fabrication facility is in Corpus
Christi, Texas, and the other properties are currently being used for branch
offices. Other branch facilities are leased from third parties.
PROPOSAL NO. 2
THE CIMARRON SALE PROPOSAL
BACKGROUND OF THE CIMARRON SALE PROPOSAL
As set forth in "The Energy Industries Sale Proposal--Background of the Energy
Industries Sale Proposal," the Company's strategic plan calls for the Company's
exit from the energy business and the repositioning of the Company in the food
services business. In addition to the Energy Industries Sale Proposal, the
Cimarron Sale Proposal is an important component of that strategic plan.
Schroder Wertheim was engaged by the Company to assist the Company in
identifying and evaluating potential candidates for a purchase of Cimarron. In
connection with this engagement, Schroder Wertheim will be requested by the
Company to render an opinion as to the fairness, from a financial point of view,
of the consideration to be received by the Company in connection with the
Cimarron Sale. The Company has agreed to pay Schroder Wertheim a fee equal to
1% of the aggregate consideration for the Cimarron Sale up to $25 million, and
1.5% of the aggregate consideration above $25 million, upon the closing of the
Cimarron Sale and has also agreed to reimburse Schroder Wertheim for reasonable
expenses and to indemnify Schroder Wertheim against certain liabilities,
including liabilities under the federal securities laws.
In connection with the Cimarron Sale, Schroder Wertheim initiated contact with
more than 80 potential purchasers. Those potential purchasers were selected on
the basis of their potential strategic interest in Cimarron and their desire to
add natural gas gathering, processing, marketing and trading operations to their
existing operations or energy investment portfolios. As a result of such
contacts, more than 60 of the prospective purchasers signed confidentiality
agreements and received confidential information regarding Cimarron. The
confidential information sent to the prospective purchasers included a
confidential memorandum which provided a
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