Harbinger Group Inc.
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SEC Filings

PRER14A
HRG GROUP, INC. filed this Form PRER14A on 11/14/1995
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<PAGE>
 
  Net cash used by investing activities of $4.9 million in fiscal 1993
approximated the $4.5 million use of cash in 1992. Investing activities in 1993
consisted of the cash received from the disposition of the Company's investment
in Arethusa, the cash used in the acquisitions of Cimarron and Stellar and
capital expenditures. Capital expenditures were lower in 1993 as a result of
the completion of a major oil and gas production capital project in 1992.
Reflecting the Norex Refinancing, net cash provided by financing activities of
$1.5 million in fiscal 1993 compared favorably to the net use of cash in fiscal
1992 of $10.5 million.
 
RESULTS OF OPERATIONS
 
General
 
 Fiscal 1994--1993
 
  Zapata's net loss of $8.3 million for fiscal 1994 compared unfavorably to the
net income of $9.4 million in fiscal 1993. A net loss from the discontinued
marine protein operation in fiscal 1994 totalled $7.6 million and compared
unfavorably to the $436,000 net loss in fiscal 1993. The fiscal 1994 loss from
discontinued operations includes an estimated loss on disposition of $8.9
million. The discontinued marine protein results include allocations of
interest on general corporate debt of $2.5 million and $3.9 million in 1994 and
1993, respectively.
 
  On a continuing operations basis, a loss of $695,000 in fiscal 1994 compared
unfavorably to income of $9.8 million in fiscal 1993. The fiscal 1994 loss
included a $29.2 million pretax write-down of the Company's oil and gas
properties in the Gulf of Mexico as a result of low gas prices and a revision
of estimated future costs. Sales of Tidewater common stock generated pretax
gains of $37.5 million in fiscal 1994 and $32.9 million in fiscal 1993. The
fiscal 1994 gain was partially offset by a $7.4 million expense associated with
the Norex debt prepayments; this expense was comprised of debt prepayment
penalties totalling $4.1 million and a $3.3 million write-off of previously
deferred expenses related to the origination of such indebtedness. The fiscal
1993 gain was partially offset by a $6.4 million prepayment penalty that Zapata
was required to pay in connection with refinancing of senior indebtedness and a
$5.7 million loss from the disposal of Zapata's investment in Arethusa.
Interest expense was reduced substantially in fiscal 1994 as compared to 1993
reflecting the effects of the restructuring of indebtedness in fiscal 1993 and
overall reduction of the Company's indebtedness in fiscal 1994.
 
  Revenues of $241.2 million and an operating loss of $30.1 million in fiscal
1994 compared to revenues of $206.5 million and an operating loss of $1.3
million in fiscal 1993. The oil and gas valuation provision in fiscal 1994 more
than offset the contribution from the newly-acquired natural gas compression
operations. The 1994 operating loss also included a $2.4 million expense
related to a reduction in staff at the Company's corporate headquarters and
write-off of leasehold improvements.
 
 Fiscal 1993--1992
 
  The Company's net income of $9.4 million for fiscal 1993 represented a
significant improvement from net income of $2.4 million for fiscal 1992. The
discontinued marine protein operations incurred net losses of $436,000 and
$384,000 in fiscal 1993 and 1992, respectively, which includes allocations of
interest on general corporate debt of $3.9 million and $3.7 million,
respectively.
 
  The Company's income from continuing operations of $9.8 million in fiscal
1993 compared favorably to the income of $2.8 million in fiscal 1992. The
improvement was due to the $32.9 million pretax gain from the sale of Tidewater
common stock in June 1993.
 
  The Company's operating loss of $1.3 million for fiscal 1993 compared
unfavorably to the fiscal 1992 operating income of $6.2 million. The shortfall
was primarily attributable to reduced receipts from Bolivian oil and gas
operations. Fiscal 1993 income included equity income of $1.1 million from
Zapata's investment in Tidewater compared to equity income of $1.5 million in
fiscal 1992.
 
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