Rule 424(b)(3)
Registration No. 333-127028
PROSPECTUS SUPPLEMENT
(To Prospectus dated August 10, 2005)
Filed Pursuant to Rule 424(b)(3) of the Rules and Regulations
Under the Securities Act of 1933
SEACOR HOLDINGS INC.
4,663,895 Shares of Common Stock Registered under the Securities Act of 1933
RECENT DEVELOPMENTS
This prospectus supplement contains the Form 10-Q Quarterly Report of SEACOR Holdings Inc. for the Quarter Ending June 30, 2005 filed with the SEC on August 9, 2005.
This prospectus supplement, together with the prospectus, may be used from time to time by the selling stockholders identified in the prospectus, as supplemented, to resell any shares of common stock of SEACOR Holdings Inc. (the Company) that were issued in connection with the Companys merger with Seabulk International, Inc. The Company will not sell any securities under the prospectus, as supplemented, or receive the proceeds of any securities sold under the prospectus, as supplemented.
August 17, 2005
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
ý Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2005 or
o Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from to
Commission file number 1-12289
SEACOR Holdings Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware |
|
13-3542736 |
(State or Other Jurisdiction of |
|
(IRS Employer |
|
|
|
11200 Richmond, Suite 400, Houston, Texas |
|
77082 |
(Address of Principal Executive Offices) |
|
(Zip Code) |
(281) 899-4800
(Registrants Telephone Number, Including Area Code)
Not Applicable
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
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 ý No o
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ý No o
The total number of shares of common stock, par value $.01 per share, outstanding as of August 3, 2005 was 24,813,766. The Registrant has no other class of common stock outstanding.
SEACOR HOLDINGS INC.
Table of Contents
SEACOR HOLDINGS INC.
CONDENSED CONSOLIDATED
BALANCE SHEETS
(in thousands, except share data, unaudited)
|
|
June 30, |
|
December 31, |
|
||
ASSETS |
|
|
|
|
|
||
Current Assets: |
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
377,189 |
|
$ |
214,389 |
|
Available-for-sale securities |
|
58,088 |
|
136,992 |
|
||
Trade and other receivables, net of allowance for doubtful accounts of $4,071 and $3,357, respectively |
|
200,476 |
|
193,050 |
|
||
Inventories |
|
19,871 |
|
18,837 |
|
||
Prepaid expenses and other current assets |
|
9,215 |
|
35,453 |
|
||
Total current assets |
|
664,839 |
|
598,721 |
|
||
Investments, at Equity, and Receivables from 50% or Less Owned Companies |
|
49,603 |
|
47,870 |
|
||
Property and Equipment |
|
1,227,113 |
|
1,236,261 |
|
||
Less accumulated depreciation |
|
(292,900 |
) |
(310,674 |
) |
||
Net property and equipment |
|
934,213 |
|
925,587 |
|
||
Construction Reserve Funds |
|
98,140 |
|
144,006 |
|
||
Other Assets |
|
52,172 |
|
49,825 |
|
||
|
|
$ |
1,798,967 |
|
$ |
1,766,009 |
|
LIABILITIES AND STOCKHOLDERS EQUITY |
|
|
|
|
|
||
Current Liabilities: |
|
|
|
|
|
||
Current portion of long-term debt |
|
$ |
41 |
|
$ |
13,228 |
|
Accounts payable and accrued expenses |
|
43,335 |
|
63,461 |
|
||
Other current liabilities |
|
81,738 |
|
65,797 |
|
||
Total current liabilities |
|
125,114 |
|
142,486 |
|
||
Long-Term Debt |
|
597,467 |
|
582,367 |
|
||
Deferred Income Taxes |
|
213,378 |
|
211,542 |
|
||
Deferred Income and Other Liabilities |
|
24,497 |
|
28,988 |
|
||
Minority Interest in Subsidiaries |
|
7,257 |
|
6,869 |
|
||
Stockholders Equity: |
|
|
|
|
|
||
Common stock, $.01 par value, 24,779,588 and 24,545,428 shares issued at June 30, 2005 and December 31, 2004 |
|
248 |
|
245 |
|
||
Additional paid-in capital |
|
421,788 |
|
412,210 |
|
||
Retained earnings |
|
594,988 |
|
551,273 |
|
||
Treasury stock, 6,313,235 and 6,237,932 shares at June 30, 2005 and December 31, 2004, at cost |
|
(203,065 |
) |
(197,850 |
) |
||
Unamortized restricted stock compensation |
|
(4,874 |
) |
(2,423 |
) |
||
Accumulated other comprehensive income - |
|
|
|
|
|
||
Cumulative translation adjustments |
|
13,046 |
|
18,296 |
|
||
Unrealized gain on available-for-sale securities |
|
9,123 |
|
12,006 |
|
||
Total stockholders equity |
|
831,254 |
|
793,757 |
|
||
|
|
$ |
1,798,967 |
|
$ |
1,766,009 |
|
The accompanying notes are an integral part
of these financial statements
and should be read in conjunction herewith.
1
SEACOR HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data, unaudited)
|
|
Three Months Ended |
|
Six Months Ended |
|
||||||||
|
|
2005 |
|
2004 |
|
2005 |
|
2004 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Operating Revenues |
|
$ |
177,831 |
|
$ |
97,403 |
|
$ |
343,016 |
|
$ |
193,377 |
|
|
|
|
|
|
|
|
|
|
|
||||
Costs and Expenses: |
|
|
|
|
|
|
|
|
|
||||
Operating expenses |
|
117,179 |
|
73,759 |
|
232,780 |
|
148,789 |
|
||||
Administrative and general |
|
19,329 |
|
13,857 |
|
37,824 |
|
28,933 |
|
||||
Depreciation and amortization |
|
18,492 |
|
14,156 |
|
36,774 |
|
28,117 |
|
||||
|
|
155,000 |
|
101,772 |
|
307,378 |
|
205,839 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Gains on Asset Sales |
|
1,812 |
|
6,117 |
|
15,328 |
|
9,755 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Operating Income (Loss) |
|
24,643 |
|
1,748 |
|
50,966 |
|
(2,707 |
) |
||||
|
|
|
|
|
|
|
|
|
|
||||
Other Income (Expense): |
|
|
|
|
|
|
|
|
|
||||
Interest income |
|
4,484 |
|
1,663 |
|
8,163 |
|
3,042 |
|
||||
Interest expense |
|
(7,550 |
) |
(5,388 |
) |
(15,141 |
) |
(10,766 |
) |
||||
Derivative loss, net |
|
(178 |
) |
(560 |
) |
(1,768 |
) |
(481 |
) |
||||
Foreign currency transaction gains (losses), net |
|
4,401 |
|
(689 |
) |
3,852 |
|
(223 |
) |
||||
Marketable securities sale gains, net |
|
8,502 |
|
2,753 |
|
14,736 |
|
5,502 |
|
||||
Other, net |
|
440 |
|
233 |
|
640 |
|
352 |
|
||||
|
|
10,099 |
|
(1,988 |
) |
10,482 |
|
(2,574 |
) |
||||
Income (Loss) from Continuing Operations Before Income Tax Expense (Benefit), Minority Interest in Income of Subsidiaries and Equity In Earnings of 50% or Less Owned Companies |
|
34,742 |
|
(240 |
) |
61,448 |
|
(5,281 |
) |
||||
Income Tax Expense (Benefit) |
|
12,448 |
|
169 |
|
22,188 |
|
(1,333 |
) |
||||
Income (Loss) from Continuing Operations Before Minority Interest in Income of Subsidiaries and Equity in Earnings of 50% or Less Owned Companies |
|
22,294 |
|
(409 |
) |
39,260 |
|
(3,948 |
) |
||||
Minority Interest in Income of Subsidiaries |
|
(154 |
) |
(91 |
) |
(120 |
) |
(86 |
) |
||||
Equity in Earnings of 50% or Less Owned Companies |
|
2,594 |
|
673 |
|
4,211 |
|
1,243 |
|
||||
Income (Loss) from Continuing Operations |
|
24,734 |
|
173 |
|
43,351 |
|
(2,791 |
) |
||||
Income from Discontinued Operations, net of $210 and $196, respectively, in income tax expense |
|
390 |
|
|
|
364 |
|
|
|
||||
Net Income (Loss) |
|
$ |
25,124 |
|
$ |
173 |
|
$ |
43,715 |
|
$ |
(2,791 |
) |
|
|
|
|
|
|
|
|
|
|
||||
Basic Earnings (Loss) Per Common Share: |
|
|
|
|
|
|
|
|
|
||||
Income (Loss) from Continuing Operations |
|
$ |
1.35 |
|
$ |
0.01 |
|
$ |
2.37 |
|
$ |
(0.15 |
) |
Income from Discontinued Operations |
|
0.02 |
|
|
|
0.02 |
|
|
|
||||
Net Income (Loss) |
|
$ |
1.37 |
|
$ |
0.01 |
|
$ |
2.39 |
|
$ |
(0.15 |
) |
|
|
|
|
|
|
|
|
|
|
||||
Diluted Earnings (Loss) Per Common Share: |
|
|
|
|
|
|
|
|
|
||||
Income (Loss) from Continuing Operations |
|
$ |
1.18 |
|
$ |
0.01 |
|
$ |
2.09 |
|
$ |
(0.15 |
) |
Income from Discontinued Operations |
|
0.02 |
|
|
|
0.02 |
|
|
|
||||
Net Income (Loss) |
|
$ |
1.20 |
|
$ |
0.01 |
|
$ |
2.11 |
|
$ |
(0.15 |
) |
|
|
|
|
|
|
|
|
|
|
||||
Weighted Average Common Shares Outstanding: |
|
|
|
|
|
|
|
|
|
||||
Basic |
|
18,349 |
|
18,347 |
|
18,299 |
|
18,407 |
|
||||
Diluted |
|
21,924 |
|
18,476 |
|
21,916 |
|
18,407 |
|
The accompanying notes are an integral part
of these financial statements
and should be read in conjunction herewith.
2
SEACOR
HOLDINGS INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
|
|
Six Months Ended |
|
||||
|
|
2005 |
|
2004 |
|
||
|
|
|
|
|
|
||
Net Cash Provided by Operating Activities |
|
$ |
49,076 |
|
$ |
268 |
|
|
|
|
|
|
|
||
Cash Flows from Investing Activities: |
|
|
|
|
|
||
Purchase of property and equipment |
|
(144,960 |
) |
(69,527 |
) |
||
Proceeds from asset sales, including those previously held for sale |
|
112,287 |
|
60,859 |
|
||
Purchase of available-for-sale securities |
|
(81,753 |
) |
(69,834 |
) |
||
Proceeds from sale of available-for-sale securities |
|
178,130 |
|
50,891 |
|
||
Investments in and advances to 50% or less owned companies |
|
(252 |
) |
(359 |
) |
||
Principal payments on notes due from 50% or less owned companies |
|
62 |
|
2,830 |
|
||
Proceeds on sale of investments in 50% or less owned companies |
|
|
|
5,148 |
|
||
Dividends received from 50% or less owned companies |
|
2,956 |
|
991 |
|
||
Net (increase) decrease in construction reserve funds |
|
45,866 |
|
(24,312 |
) |
||
Investment in note due from non-affiliate |
|
|
|
(5,352 |
) |
||
Principal payments on note due from non-affiliate |
|
|
|
41 |
|
||
Cash settlements of derivative transactions |
|
(110 |
) |
(274 |
) |
||
Acquisitions, purchase price adjustments |
|
4,793 |
|
|
|
||
Net cash provided by (used in) investing activities |
|
117,019 |
|
(48,898 |
) |
||
|
|
|
|
|
|
||
Cash Flows from Financing Activities: |
|
|
|
|
|
||
Payments of long-term debt |
|
(13,207 |
) |
(65 |
) |
||
Proceeds from borrowings under a revolving credit facility |
|
15,000 |
|
10,000 |
|
||
Proceeds from share award plans |
|
2,625 |
|
448 |
|
||
Common stock acquired for treasury |
|
(5,561 |
) |
(12,814 |
) |
||
Other |
|
158 |
|
(64 |
) |
||
Net cash used in financing activities |
|
(985 |
) |
(2,495 |
) |
||
|
|
|
|
|
|
||
Effect of Exchange Rate Changes on Cash and Cash Equivalents |
|
(2,310 |
) |
847 |
|
||
|
|
|
|
|
|
||
Net Increase (Decrease) in Cash and Cash Equivalents |
|
162,800 |
|
(50,278 |
) |
||
Cash and Cash Equivalents, Beginning of Period |
|
214,389 |
|
263,135 |
|
||
Cash and Cash Equivalents, End of Period |
|
$ |
377,189 |
|
$ |
212,857 |
|
The accompanying notes are an integral part
of these financial statements
and should be read in conjunction herewith.
3
SEACOR HOLDINGS INC.
NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
The condensed consolidated financial information for the three and six months ended June 30, 2005 and 2004 has been prepared by the Company and was not audited by its independent registered public accounting firm. The condensed consolidated financial statements include the accounts of SEACOR Holdings Inc. and its consolidated subsidiaries. In the opinion of management, all adjustments (consisting of normal recurring adjustments) have been made to present fairly the Companys financial position as of June 30, 2005 and its results of operations and cash flows for the three and six months ended June 30, 2005 and 2004. Results of operations for the interim periods presented are not necessarily indicative of the operating results for the full year or any future periods.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2004.
Unless the context otherwise indicates, any references in this Quarterly Report on Form 10-Q to the Company refer to SEACOR Holdings Inc. and its consolidated subsidiaries, and any references in this Quarterly Report on Form 10-Q to SEACOR refer to SEACOR Holdings Inc.
2. Seabulk Merger
On July 1, 2005, SEACOR completed its merger with Seabulk International, Inc. (Seabulk). With a fleet of 144 vessels at acquisition, Seabulk is a leading provider of marine support and transportation services, primarily to the energy and chemical industries. Seabulks offshore energy services fleet supports operators of offshore oil and gas exploration, development and production facilities in the Gulf of Mexico, the Arabian Gulf, offshore West Africa, South America and Southeast Asia. Seabulks tanker fleet, principally comprised of U.S. flag ships, transports petroleum products, crude oil and chemicals. Seabulks marine towing fleet provides harbor towing services from ports in Florida, Alabama, Louisiana and Texas and offshore towing services primarily in the Gulf of Mexico.
Under the terms of the merger agreement, Seabulks stockholders received 0.2694 shares of SEACOR common stock, par value $0.01 per share (Common Stock), plus cash of $4.00 for each issued and outstanding share of Seabulk common stock. Based on SEACORs closing price of $64.30 on June 30, 2005, Seabulk stockholders have received $21.32 in SEACOR stock and cash for each share of Seabulk common stock exchanged. Seabulk stock ceased trading at the close of business on June 30, 2005.
The aggregate equity value of the transaction was approximately $521.7 million, based on SEACOR issuing 6,354,642 shares of Common Stock, 394,446 options to purchase Common Stock, plus additional cash consideration of approximately $94.4 million. The cash portion of the transaction was financed with $50.0 million of additional borrowings under SEACORs existing revolving credit facility and internally generated funds.
3. Equipment Acquisitions and Dispositions
Capital expenditures aggregated $145.0 million in the six months ended June 30, 2005. Equipment deliveries during the period included 4 used anchor handling towing supply vessels and 1 new crew vessel, 45 new dry cargo covered hopper and 16 new chemical tank barges. The Company also sold 11 offshore support vessels, 4 helicopters and other equipment for aggregate consideration of $108.6 million in the six months ended June 30, 2005.
4
4. Acquisition of Era Aviation, Inc. and Disposition of Held for Sale Assets
On December 31, 2004, the Company acquired all of the issued and outstanding shares of Era Aviation, Inc. (Era), the owner of 81 helicopters and 16 fixed wing aircraft. Immediately following the acquisition of Era, the Company combined Eras helicopter business with its pre-existing helicopter services and began a process to sell Eras regional airline service business that included its fixed wing aircraft. During the six months ended June 30, 2005, the purchase price of $118.1 million was reduced by $4.8 million resulting from the final determination of acquired working capital partially offset by additional closing costs. The purchase price allocation will be completed in 2005. The Company does not expect the acquisition of Era to result in the recognition of goodwill.
Effective May 27, 2005, the Company sold Eras regional airline service business, previously held for sale, for $15.0 million. Sale proceeds, paid to the Company in July 2005, were reported in Trade and other receivables in the Companys Condensed Consolidated Balance Sheet at June 30, 2005. The operating results of the regional airline service business, including $15.3 million of operating revenues earned in the six months ended June 30, 2005, have been reported as Discontinued Operations in the Companys Condensed Consolidated Statement of Operations. The Company also sold other previously held for sale Era assets for $3.7 million, including 1 helicopter and 4 fixed wing aircraft, during the second quarter of 2005.
During the second quarter of 2005, the Company withdrew $50.9 million from its joint depository construction reserve fund accounts with consent of the Maritime Administration. The withdrawals reimbursed the Company for prior purchases of dry cargo hopper and chemical tank barges and an anchor handling towing supply vessel. These withdrawals were partly offset by the Companys deposit into its joint depository construction reserve fund accounts of additional offshore support vessel sale proceeds and interest earned on invested fund balances during the six months ended June 30, 2005.
Construction reserve fund accounts were established by the Company pursuant to Section 511 of the Merchant Marine Act, 1936, as amended. In accordance with the statute, the Company has been permitted to deposit proceeds from the sale of certain vessels into the joint depository construction reserve fund accounts for the purpose of acquiring U.S. flag vessels and qualifying for the temporary deferral of taxable gains realized from the sale of vessels.
The Companys unfunded capital commitments as of June 30, 2005 for new helicopters, new dry cargo covered hopper barges, new offshore support vessels and other equipment totaled $342.7 million. Of these commitments, up to approximately $160.0 million may be terminated without liability other than the payment of liquidated damages of $3.0 million in the aggregate. Deliveries are expected in 2005 through 2009 for helicopters, 2006 through 2007 for barges and 2005 for offshore support vessels. In addition to these purchase commitments, the Company has placed refundable deposits for additional new helicopters.
The Company has guaranteed the payment of amounts owed by certain of its joint ventures under vessel charter agreements that expire through 2009. In addition, the Company has guaranteed amounts owed by certain of its joint ventures under a banking facility and a performance guarantee. As of June 30, 2005, the total amount guaranteed by the Company was $14.8 million.
A subsidiary of SEACOR has received a document subpoena from the Antitrust Division of the U.S. Department of Justice. This subpoena relates to a grand jury investigation of potential antitrust violations among providers of helicopter transportation services in the Gulf of Mexico. The Company believes that this subpoena is part of a broader industry inquiry and that the other providers also have received such subpoenae. SEACOR intends to provide all information requested in the response to this investigation.
7. Long-Term Debt
In 2005, the Company borrowed $65.0 million ($15.0 million on June 3, 2005 and $50.0 million on July 5, 2005) under its revolving credit facility and, as of August 3, 2005, $132.8 million remains available for future borrowings under that facility. The Companys revolving credit facility terminates in February 2007. Repayments of long-term debt in 2005, principally related to an obligation due an offshore vessel builder, totaled $13.2 million.
5
8. Income Taxes
As a result of the American Jobs Creation Act of 2004, the Company believes it will be in the position to repatriate, for a limited time, accumulated foreign earnings at an effective federal tax rate of 5.25%, which would result in tax obligations significantly less than the deferred taxes previously provided for its unremitted earnings of foreign subsidiaries. The Company is exploring the full impact of the legislation and will finalize its repatriation plan during 2005. In accordance with FASB Staff Position FAS 109-2, the Company will recognize the income tax benefit of this special one-time dividends received deduction in the period that the Company has decided on a plan for repatriation.
9. Authorized Shares of Common Stock
At the annual meeting of stockholders on June 27, 2005, the holders of Common Stock approved an amendment to SEACORs Restated Certificate of Incorporation increasing the number of authorized shares of SEACOR from 40,000,000 shares to 60,000,000 shares. To effect this change, SEACOR amended its certificate of incorporation.
10. Stock and Debt Repurchases
During the six months ended June 30, 2005, the Company acquired a total of 84,647 shares of Common Stock for treasury at an aggregate cost of $5.6 million. As of June 30, 2005, $37.7 million of repurchase authority granted by the Companys Board of Directors remains available for acquisition of additional shares of Common Stock, the Companys 7.2% Senior Notes Due 2009 (7.2% Notes) and its 5-7/8% Senior Notes due 2012 (5-7/8% Notes). Securities are acquired from time to time through open market purchases, privately negotiated transactions or otherwise, depending on market conditions.
11. Earnings (Loss) Per Common Share
Basic earnings (loss) per common share were computed based on the weighted average number of common shares issued and outstanding during the relevant periods. Diluted earnings (loss) per common share were computed based on the weighted average number of common shares issued and outstanding plus all potentially dilutive common shares that would have been outstanding in the relevant periods assuming the vesting of restricted stock grants and the issuance of common shares for stock options and convertible subordinated notes through the application of the treasury stock and if-converted methods. Diluted earnings (loss) per common share exclude certain options and share awards, totaling 110,560 in the three and six months ended June 30, 2005 and 246,645 and 355,015 in the three and six months ended June 30, 2004, respectively, as the effect of their inclusion in the computation would have been antidilutive.
|
|
For the Three Months Ended |
|
For the Six Months Ended |
|
||||||||||||
|
|
June 30, |
|
June 30, |
|
||||||||||||
|
|
Net Income |
|
Average O/S |
|
Per |
|
Net Income |
|
Average O/S |
|
Per |
|
||||
2005 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
(in thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic Earnings Per Common Share |
|
$ |
25,124 |
|
18,349 |
|
$ |
1.37 |
|
$ |
43,715 |
|
18,299 |
|
$ |
2.39 |
|
Effect of Dilutive Securities, net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Options and Restricted Stock |
|
|
|
157 |
|
|
|
|
|
199 |
|
|
|
||||
Convertible Securities |
|
1,198 |
|
3,418 |
|
|
|
2,408 |
|
3,418 |
|
|
|
||||
Diluted Earnings Per Common Share |
|
$ |
26,322 |
|
21,924 |
|
$ |
1.20 |
|
$ |
46,123 |
|
21,916 |
|
$ |
2.11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
2004 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
(in thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic Earnings (Loss) Per Common Share |
|
$ |
173 |
|
18,347 |
|
$ |
0.01 |
|
$ |
(2,791 |
) |
18,407 |
|
$ |
(0.15 |
) |
Effect of Dilutive Securities, net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Options and Restricted Stock |
|
|
|
129 |
|
|
|
|
|
|
|
|
|
||||
Diluted Earnings (Loss) Per Common Share |
|
$ |
173 |
|
18,476 |
|
$ |
0.01 |
|
$ |
(2,791 |
) |
18,407 |
|
$ |
(0.15 |
) |
6
12. Comprehensive Income (Loss)
For the three months ended June 30, 2005 and 2004, total comprehensive income was $18.0 million and total comprehensive loss was $0.5 million, respectively. For the six months ended June 30, 2005 and 2004, total comprehensive income was $35.6 million and total comprehensive loss was $1.4 million, respectively. Other comprehensive income (loss) consisted of gains and losses from foreign currency translation adjustments and unrealized holding gains and losses on available-for-sale securities.
13. Stock Compensation
Under Statement of Financial Accounting Standards No. 123 (SFAS 123), companies could either adopt a fair value method of accounting for its stock based compensation plans or continue to use the intrinsic value method as prescribed by APB Opinion No. 25. The Company has elected to continue accounting for its stock compensation plans using the intrinsic value method. Had compensation costs for the plans been determined using a fair value method consistent with SFAS 123, the Companys net income (loss) and earnings (loss) per share would have been reduced to the following pro forma amounts:
|
|
For the Three Months |
|
For the Six Months |
|
||||||||
(in thousands, except per share data) |
|
2005 |
|
2004 |
|
2005 |
|
2004 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Net Income (Loss), As Reported |
|
$ |
25,124 |
|
$ |
173 |
|
$ |
43,715 |
|
$ |
(2,791 |
) |
Add: Stock Based Compensation Using Intrinsic Value Method |
|
495 |
|
347 |
|
914 |
|
764 |
|
||||
Less: Stock Based Compensation Using Fair Value Method |
|
(642 |
) |
(536 |
) |
(1,207 |
) |
(1,180 |
) |
||||
Net Income (Loss), Pro Forma |
|
$ |
24,977 |
|
$ |
(16 |
) |
$ |
43,422 |
|
$ |
(3,207 |
) |
|
|
|
|
|
|
|
|
|
|
||||
Basic Earnings (Loss) Per Common Share: |
|
|
|
|
|
|
|
|
|
||||
As Reported |
|
$ |
1.37 |
|
$ |
0.01 |
|
$ |
2.39 |
|
$ |
(0.15 |
) |
Pro Forma |
|
1.36 |
|
0.00 |
|
2.37 |
|
(0.17 |
) |
||||
|
|
|
|
|
|
|
|
|
|
||||
Diluted Earnings (Loss) Per Common Share: |
|
|
|
|
|
|
|
|
|
||||
As Reported |
|
$ |
1.20 |
|
$ |
0.01 |
|
$ |
2.11 |
|
$ |
(0.15 |
) |
Pro Forma |
|
1.19 |
|
0.00 |
|
2.09 |
|
(0.17 |
) |
The effects of applying a fair value method consistent with SFAS 123 in this pro forma disclosure are not indicative of future events and the Company anticipates that it will award additional stock based compensation in future periods. During the six months ended June 30, 2005, the Company issued 234,160 shares of Common Stock for restricted stock grants, director stock grants and the exercise of stock options. In addition, the Company released from treasury 9,344 shares of Common Stock for employee stock plan purchases.
14. New Accounting Pronouncement
On December 16, 2004, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 123 (revised 2004), Share-Based Payment, which is a revision of FASB Statement No. 123, Accounting for Stock-Based Compensation. Statement 123 (R) supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees, and amends FASB Statement No. 95, Statement of Cash Flows. Statement 123 (R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. The impact of adopting Statement 123 (R) cannot be predicted at this time because it will depend on levels of share-based payments granted in the future. However, had the Company adopted Statement 123 (R) in prior periods, the impact of that standard would have approximated the impact of the SFAS 123 disclosure of pro forma net income and earnings per share presented in Note 13. The Company will adopt the provisions of Statement 123 (R) on January 1, 2006 using the modified prospective approach, recognizing compensation expense for all unvested employee stock options as of that date and for all subsequent employee stock options granted thereafter.
7
15. Segment Information
Accounting standards require public business enterprises to report information about each of their operating business segments that exceed certain quantitative thresholds or meet certain other reporting requirements. Operating business segments have been defined as a component of an enterprise about which separate financial information is available and is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Certain reclassifications of prior period information have been made to conform to the current periods reportable segment presentation. The Companys basis of measurement of segment profit or loss has not changed from those previously described in the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2004.
(in thousands) |
|
Offshore |
|
Environmental |
|
Inland |
|
Helicopter |
|
Other |
|
Total |
|
||||||
For the Three Months Ended June 30, 2005 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
External customers |
|
$ |
84,028 |
|
$ |
35,635 |
|
$ |
27,333 |
|
$ |
27,578 |
|
$ |
3,257 |
|
$ |
177,831 |
|
Intersegment |
|
15 |
|
|
|
|
|
114 |
|
|
|
129 |
|
||||||
Operating revenues |
|
84,043 |
|
35,635 |
|
27,333 |
|
27,692 |
|
3,257 |
|
177,960 |
|
||||||
Operating expenses |
|
(50,735 |
) |
(27,347 |
) |
(16,880 |
) |
(20,349 |
) |
(1,997 |
) |
(117,308 |
) |
||||||
Administrative and general |
|
(8,241 |
) |
(4,177 |
) |
(570 |
) |
(1,759 |
) |
(104 |
) |
(14,851 |
) |
||||||
Depreciation and amortization |
|
(10,950 |
) |
(778 |
) |
(2,791 |
) |
(3,846 |
) |
(94 |
) |
(18,459 |
) |
||||||
Gains on asset sales |
|
1,770 |
|
42 |
|
|
|
|
|
|
|
1,812 |
|
||||||
Other income (expense), primarily foreign currency |
|
4,370 |
|
34 |
|
92 |
|
120 |
|
|
|
4,616 |
|
||||||
Equity in earnings of 50% or less owned companies |
|
1,764 |
|
369 |
|
|
|
|
|
461 |
|
2,594 |
|
||||||
Reportable Segment Profit |
|
$ |
22,021 |
|
$ |
3,778 |
|
$ |
7,184 |
|
$ |
1,858 |
|
$ |
1,523 |
|
36,364 |
|
|
Corporate expenses |
|
|
|
|
|
|
|
|
|
|
|
(4,516 |
) |
||||||
Other income (expense) not included above |
|
|
|
|
|
|
|
|
|
|
|
5,488 |
|
||||||
Equity in earnings of 50% or less owned companies |
|
|
|
|
|
|
|
|
|
|
|
(2,594 |
) |
||||||
Income before Taxes, Minority Interest and Equity Earnings |
|
|
|
|
|
|
|
|
|
|
|
$ |
34,742 |
|
|||||
For the Three Months Ended June 30, 2004 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
External customers |
|
$ |
67,008 |
|
$ |
14,654 |
|
$ |
10,038 |
|
$ |
5,703 |
|
$ |
|
|
$ |
97,403 |
|
Intersegment |
|
31 |
|
|
|
|
|
977 |
|
|
|
1,008 |
|
||||||
Operating revenues |
|
67,039 |
|
14,654 |
|
10,038 |
|
6,680 |
|
|
|
98,411 |
|
||||||
Operating expenses |
|
(49,858 |
) |
(10,931 |
) |
(7,282 |
) |
(6,697 |
) |
|
|
(74,768 |
) |
||||||
Administrative and general |
|
(8,046 |
) |
(2,255 |
) |
(365 |
) |
(213 |
) |
|
|
(10,879 |
) |
||||||
Depreciation and amortization |
|
(10,822 |
) |
(722 |
) |
(1,459 |
) |
(1,054 |
) |
|
|
(14,057 |
) |
||||||
Gains (losses) on asset sales |
|
6,364 |
|
70 |
|
|
|
(24 |
) |
|
|
6,410 |
|
||||||
Other income (expense), primarily foreign currency |
|
(687 |
) |
23 |
|
|
|
|
|
|
|
(664 |
) |
||||||
Equity earnings (losses) of 50% or less owned companies |
|
909 |
|
|
|
|
|
|
|
(236 |
) |
673 |
|
||||||
Reportable Segment Profit (Loss) |
|
$ |
4,899 |
|
$ |
839 |
|
$ |
932 |
|
$ |
(1,308 |
) |
$ |
(236 |
) |
5,126 |
|
|
Corporate expenses |
|
|
|
|
|
|
|
|
|
|
|
(3,369 |
) |
||||||
Other income (expense) not included above |
|
|
|
|
|
|
|
|
|
|
|
(1,324 |
) |
||||||
Equity in earnings of 50% or less owned companies |
|
|
|
|
|
|
|
|
|
|
|
(673 |
) |
||||||
Loss before Taxes, Minority Interest and Equity Earnings |
|
|
|
|
|
|
|
|
|
|
|
$ |
(240 |
) |
|||||
For the Six Months Ended June 30, 2005 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
External customers |
|
$ |
164,352 |
|
$ |
71,528 |
|
$ |
52,863 |
|
$ |
48,814 |
|
$ |
5,459 |
|
$ |
343,016 |
|
Intersegment |
|
41 |
|
|
|
|
|
477 |
|
74 |
|
592 |
|
||||||
Operating revenues |
|
164,393 |
|
71,528 |
|
52,863 |
|
49,291 |
|
5,533 |
|
343,608 |
|
||||||
Operating expenses |
|
(103,585 |
) |
(54,002 |
) |
(31,652 |
) |
(40,682 |
) |
(3,451 |
) |
(233,372 |
) |
||||||
Administrative and general |
|
(15,742 |
) |
(7,988 |
) |
(1,078 |
) |
(3,939 |
) |
(505 |
) |
(29,252 |
) |
||||||
Depreciation and amortization |
|
(21,620 |
) |
(1,638 |
) |
(5,388 |
) |
(7,912 |
) |
(94 |
) |
(36,652 |
) |
||||||
Gains on asset sales |
|
14,693 |
|
39 |
|
11 |
|
585 |
|
|
|
15,328 |
|
||||||
Other income (expense), primarily foreign currency |
|
3,830 |
|
41 |
|
27 |
|
192 |
|
50 |
|
4,140 |
|
||||||
Equity in earnings of 50% or less owned companies |
|
2,860 |
|
660 |
|
|
|
|
|
691 |
|
4,211 |
|
||||||
Reportable Segment Profit (Loss) |
|
$ |
44,829 |
|
$ |
8,640 |
|
$ |
14,783 |
|
$ |
(2,465 |
) |
$ |
2,224 |
|
68,011 |
|
|
Corporate expenses |
|
|
|
|
|
|
|
|
|
|
|
(8,704 |
) |
||||||
Other income (expense) not included above |
|
|
|
|
|
|
|
|
|
|
|
6,352 |
|
||||||
Equity in earnings of 50% or less owned companies |
|
|
|
|
|
|
|
|
|
|
|
(4,211 |
) |
||||||
Income before Taxes, Minority Interest and Equity Earnings |
|
|
|
|
|
|
|
|
|
|
|
$ |
61,448 |
|
|||||
For the Six Months Ended June 30, 2004 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
External customers |
|
$ |
132,982 |
|
$ |
31,046 |
|
$ |
18,614 |
|
$ |
10,735 |
|
$ |
|
|
$ |
193,377 |
|
Intersegment |
|
73 |
|
|
|
|
|
1,772 |
|
|
|
1,845 |
|
||||||
Operating revenues |
|
133,055 |
|
31,046 |
|
18,614 |
|
12,507 |
|
|
|
195,222 |
|
||||||
Operating expenses |
|
(101,250 |
) |
(23,150 |
) |
(13,272 |
) |
(12,904 |
) |
|
|
(150,576 |
) |
||||||
Administrative and general |
|
(16,544 |
) |
(4,924 |
) |
(773 |
) |
(850 |
) |
|
|
(23,091 |
) |
||||||
Depreciation and amortization |
|
(21,893 |
) |
(1,269 |
) |
(2,694 |
) |
(2,080 |
) |
|
|
(27,936 |
) |
||||||
Gains on asset sales |
|
9,784 |
|
67 |
|
73 |
|
124 |
|
|
|
10,048 |
|
||||||
Other income (expense), primarily foreign currency |
|
(131 |
) |
21 |
|
|
|
|
|
|
|
(110 |
) |
||||||
Equity in earnings (losses) of 50% or less owned companies |
|
2,246 |
|
|
|
|
|
|
|
(1,002 |
) |
1,244 |
|
||||||
Reportable Segment Profit (Loss) |
|
$ |
5,267 |
|
$ |
1,791 |
|
$ |
1,948 |
|
$ |
(3,203 |
) |
$ |
(1,002 |
) |
4,801 |
|
|
Corporate expenses |
|
|
|
|
|
|
|
|
|
|
|
(6,374 |
) |
||||||
Other income (expense) not included above |
|
|
|
|
|
|
|
|
|
|
|
(2,464 |
) |
||||||
Equity in earnings of 50% or less owned companies |
|
|
|
|
|
|
|
|
|
|
|
(1,244 |
) |
||||||
Loss before Taxes, Minority Interest and Equity Earnings |
|
|
|
|
|
|
|
|
|
|
|
$ |
(5,281 |
) |
8
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Certain statements discussed in Item 2 (Managements Discussion and Analysis of Financial Condition and Results of Operations), Item 3 (Quantitative and Qualitative Disclosures About Market Risk) and elsewhere in this Form 10-Q constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements concerning managements expectations, strategic objectives, business prospects, anticipated economic performance and financial condition and other similar matters involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of results to differ materially from any future results, performance or achievements discussed or implied by such forward-looking statements. Such risks, uncertainties and other important factors include, among others: the cyclical nature of the oil and gas industry, the operation of Offshore Marine Services and Helicopter Services in a highly competitive environment, changes in foreign political, military and economic conditions, the dependence of Offshore Marine Services and Helicopter Services on several customers, industry fleet capacity, the ongoing need to replace aging vessels, restrictions imposed by the Shipping Acts and Aviation Acts on the amount of foreign ownership of the Companys Common Stock, safety record requirements related to Offshore Marine Services and Helicopter Services, changes in foreign and domestic oil and gas exploration and production activity, vessel and helicopter-related risks of Offshore Marine Services and Helicopter Services, effects of adverse weather conditions and seasonality on Helicopter Services, dependence of spill response revenue on the number and size of spills and upon continuing government regulation in this area and our ability to comply with such regulation and other governmental regulation, changes in NRCs OSRO classification, effects of adverse weather and river conditions and seasonality on inland river operations, the level of grain export volume, the effect of fuel prices on barge towing costs, variability in freight rates for inland river barges, liability in connection with providing spill response services, the effect of international economic and political factors in inland river operations, the intense competition faced by Inland River Services, adequacy of insurance coverage, currency exchange fluctuations, the attraction and retention of qualified personnel by the Company, and various other matters, many of which are beyond the Companys control and other factors as described at the end of Item 7 (Managements Discussion and Analysis of Financial Condition and Results of Operations) of the Companys Form 10-K for the fiscal year ended December 31, 2004. The words expect, anticipate, estimate, project, intend, believe, plan and similar expressions are intended to identify forward-looking statements. Forward-looking statements speak only as of the date of the document in which they are made. We disclaim any obligation or undertaking to provide any updates or revisions to any forward-looking statement to reflect any change in our expectations or any change in events, conditions or circumstances on which the forward-looking statement is based.
Consolidated Results of Operations
|
|
For the Three Months Ended June 30, |
|
For the Six Months Ended June 30, |
|
Percent Change |
|
||||||||||||||||||
|
|
2005 |
|
2004 |
|
2005 |
|
2004 |
|
3 Mos |
|
6 Mos |
|
||||||||||||
(in thousands) |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
05 / 04 |
|
05 / 04 |
|
||||
Operating Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Offshore Marine Services |
|
$ |
84,043 |
|
47 |
% |
$ |
67,039 |
|
69 |
% |
$ |
164,393 |
|
48 |
% |
$ |
133,055 |
|
69 |
% |
25 |
% |
24 |
% |
Environmental Services |
|
35,635 |
|
20 |
% |
14,654 |
|
15 |
% |
71,528 |
|
21 |
% |
31,046 |
|
16 |
% |
143 |
% |
130 |
% |
||||
Inland River Services |
|
27,333 |
|
15 |
% |
10,038 |
|
10 |
% |
52,863 |
|
15 |
% |
18,614 |
|
10 |
% |
172 |
% |
184 |
% |
||||
Helicopter Services |
|
27,692 |
|
16 |
% |
6,680 |
|
7 |
% |
49,291 |
|
14 |
% |
12,507 |
|
6 |
% |
315 |
% |
294 |
% |
||||
Other and Eliminations |
|
3,128 |
|
2 |
% |
(1,008 |
) |
(1 |
)% |
4,941 |
|
2 |
% |
(1,845 |
) |
(1 |
)% |
410 |
% |
368 |
% |
||||
|
|
$ |
177,831 |
|
100 |
% |
$ |
97,403 |
|
100 |
% |
$ |
343,016 |
|
100 |
% |
$ |
193,377 |
|
100 |
% |
83 |
% |
77 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating Income (Loss) |
|
$ |
24,643 |
|
14 |
% |
$ |
1,748 |
|
2 |
% |
$ |
50,966 |
|
15 |
% |
$ |
(2,707 |
) |
(2 |
)% |
1,309 |
% |
1,983 |
% |
Other, net |
|
10,099 |
|
6 |
% |
(1,988 |
) |
(2 |
)% |
10,482 |
|
3 |
% |
(2,574 |
) |
(1 |
)% |
608 |
% |
507 |
% |
||||
Income (loss) before income taxes, minority interest & equity earnings |
|
34,742 |
|
20 |
% |
(240 |
) |
0 |
% |
61,448 |
|
18 |
% |
(5,281 |
) |
(3 |
)% |
14,576 |
% |
1,264 |
% |
||||
Income tax expense (benefit) |
|
12,448 |
|
(7 |
)% |
169 |
|
0 |
% |
22,188 |
|
(6 |
)% |
(1,333 |
) |
1 |
% |
7,266 |
% |
1,765 |
% |
||||
Income (loss) before minority interest & equity earnings |
|
22,294 |
|
13 |
% |
(409 |
) |
0 |
% |
39,260 |
|
12 |
% |
(3,948 |
) |
(2 |
)% |
5,551 |
% |
1,094 |
% |
||||
Minority interest |
|
(154 |
) |
0 |
% |
(91 |
) |
0 |
% |
(120 |
) |
0 |
% |
(86 |
) |
0 |
% |
(69 |
)% |
(40 |
)% |
||||
Equity earnings |
|
2,594 |
|
1 |
% |
673 |
|
0 |
% |
4,211 |
|
1 |
% |
1,243 |
|
1 |
% |
285 |
% |
239 |
% |
||||
Income (loss) from continuing operations |
|
24,734 |
|
14 |
% |
173 |
|
0 |
% |
43,351 |
|
13 |
% |
(2,791 |
) |
(1 |
)% |
14,197 |
% |
1,653 |
% |
||||
Discontinued operations |
|
390 |
|
0 |
% |
|
|
0 |
% |
364 |
|
0 |
% |
|
|
0 |
|
N/A |
|
N/A |
|
||||
Net income (loss) |
|
$ |
25,124 |
|
14 |
% |
$ |
173 |
|
0 |
% |
$ |
43,715 |
|
13 |
% |
$ |
(2,791 |
) |
(1 |
)% |
14,423 |
% |
1,666 |
% |
9
Overview
The table above provides an analysis of the Companys consolidated statements of operations for each quarter and six month period indicated. See Item 1. Financial Statements Note 15. Segment Information included in Part I for additional financial information about the Companys business segments. Additional discussions of results of operations by business segment are presented below. The Companys operations are divided among the following four business segments: Offshore Marine Services; Environmental Services; Inland River Services; and Helicopter Services. The Company also has activities that are referred to and described under Other. Other primarily includes equity in earnings of 50% or less owned companies unrelated to our reportable business segments and our Fixed Base Operation acquired on December 31, 2004 in the acquisition of Era (as described in Note 4 to the financial statements). Our Fixed Base Operation sells fuel and provides ground services to transient corporate aircraft at the Ted Stevens Anchorage International Airport.
Consolidated operating revenues increased significantly in the three and six months ended June 30, 2005 (Current Year Quarter and Current Six Months, respectively) as compared to the three and six months ended June 30, 2004 (Prior Year Quarter and Prior Six Months, respectively). Demand improved for vessels in Offshore Marine Services. Spill response activities increased in Environmental Services. The fleet grew and freight rates increased in Inland River Services. The acquisition of Era significantly increased the helicopter fleet in Helicopter Services.
Consolidated net income also increased significantly in the Current Year Quarter and Current Six Months due principally to those factors affecting the operating revenues and as a result of increased marketable security sales and foreign currency exchange gains that were reported in Other, net and equity earnings of 50% or less owned companies. Increased vessel sale gains in the first quarter of 2005 additionally improved profits in the Current Six Months.
Offshore Marine Services
|
|
For the Three Months Ended June 30, |
|
For the Six Months Ended June 30, |
|
Percent Change |
|
||||||||||||||||||
|
|
2005 |
|
2004 |
|
2005 |
|
2004 |
|
3 Mos |
|
6 Mos |
|
||||||||||||
(in thousands) |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
05 / 04 |
|
05 / 04 |
|
||||
Operating Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
United States |
|
$ |
45,062 |
|
54 |
% |
$ |
29,416 |
|
44 |
% |
$ |
85,703 |
|
52 |
% |
$ |
57,759 |
|
44 |
% |
53 |
% |
48 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
United Kingdom |
|
14,338 |
|
17 |
% |
16,725 |
|
25 |
% |
32,371 |
|
20 |
% |
33,653 |
|
25 |
% |
(14 |
)% |
(4 |
)% |
||||
West Africa |
|
13,781 |
|
16 |
% |
11,694 |
|
17 |
% |
26,333 |
|
16 |
% |
24,182 |
|
18 |
% |
18 |
% |
9 |
% |
||||
Latin America/Mexico |
|
6,293 |
|
7 |
% |
6,375 |
|
10 |
% |
11,653 |
|
7 |
% |
11,409 |
|
9 |
% |
(1 |
)% |
2 |
% |
||||
Asia |
|
4,024 |
|
5 |
% |
2,621 |
|
4 |
% |
7,303 |
|
4 |
% |
5,479 |
|
4 |
% |
54 |
% |
33 |
% |
||||
Other |
|
545 |
|
1 |
% |
208 |
|
0 |
% |
1,030 |
|
1 |
% |
573 |
|
0 |
% |
162 |
% |
80 |
% |
||||
Total Foreign |
|
38,981 |
|
46 |
% |
37,623 |
|
56 |
% |
78,690 |
|
48 |
% |
75,296 |
|
56 |
% |
4 |
% |
5 |
% |
||||
|
|
$ |
84,043 |
|
100 |
% |
$ |
67,039 |
|
100 |
% |
$ |
164,393 |
|
100 |
% |
$ |
133,055 |
|
100 |
% |
25 |
% |
24 |
% |
Operating Income |
|
$ |
15,887 |
|
19 |
% |
$ |
4,677 |
|
7 |
% |
$ |
38,139 |
|
23 |
% |
$ |
3,152 |
|
2 |
% |
240 |
% |
1,110 |
% |
Operating Revenues. An improvement in demand for offshore support services that began in the third quarter of 2004 continued through the Current Six Months. This improvement resulted in higher rates per day worked and utilization for Offshore Marine Services vessels, which increased operating revenues approximately $10.7 million and $21.7 million in the Current Year Quarter and Current Six Months, respectively. Of these increases, 75% and 80%, respectively, resulted from improved rates per day worked and 25% and 20%, respectively, resulted from improved vessel utilization. Rates per day worked and utilization improved for many of the Companys vessels operating in the U.S. Gulf of Mexico, offshore West Africa, the North Sea and Asia.
The Company continually assesses its asset portfolio and regularly buys, sells and charters vessels in an effort to align Offshore Marine Services fleet mix with the needs of customers. Adjustments in fleet mix have resulted in increased operating revenues of $4.6 million and $6.3 million in the Current Year Quarter and Current Six Months. Offshore Marine Services acquired four used anchor handling towing supply and one new crew vessel in the U.S. and sold six supply, two crew and one each anchor handling towing supply, towing supply and mini-supply vessel from its North Sea, West African and U.S. Gulf of Mexico fleets in the Current Six Months.
10
A net increase in the number of vessels entering time charter-out service upon concluding bareboat-out charter arrangements resulted in increased operating revenues of $2.3 million and $4.2 million in the Current Year Quarter and Current Six Months. Several of Offshore Marine Services vessels returned to the U.S. Gulf of Mexico for time-charter-out operations upon concluding bareboat charter-out activities in Latin America and Mexico.
A strengthening between comparable periods in the Pound Sterling currency relative to the U.S. dollar increased operating revenues of Offshore Marine Services North Sea operations by $0.4 million and $0.9 million in the Current Year Quarter and Current Six Months.
Improved results in the Current Year Quarter and Current Six Months were offset by decreased operating revenues earned in the U.S. Gulf of Mexico logistical operations of Offshore Marine Services.
Operating Income. Operating income increased significantly in the Current Year Quarter and Current Six Months. Improved rates per day worked and vessel utilization and fleet modernization contributed significantly to increased profitability in Offshore Marine Services. These improvements were partly offset by increased vessel operating expenses. Vessel repair and maintenance expenses, seamen redundancy costs associated with workforce reductions and fuel costs for foreign vessel operations increased in the Current Year Quarter and Current Six Months. Administrative expenses remained constant in the Current Year Quarter and declined slightly in the Current Six Months.
Results in the Current Year Quarter and Current Six Months included gains from asset sales of $1.8 million and $14.7 million, respectively, a decrease of $4.6 million and an increase of $4.9 million as compared to the Prior Year Quarter and Prior Six Months. At dates of disposition, the aggregate carrying value for the 11 vessels sold in the Current Six Months was $92.6 million.
Although reported operating revenues increased due to the strengthening in the Pound Sterling currency relative to the U.S. dollar, currency exchange rate fluctuations had no material effect on operating income, because Offshore Marine Services also pays related operating expenses in that same currency.
The table below sets forth operational data for Offshore Marine Services during the periods indicated.
|
|
Three Months |
|
Six Months |
|
Percent Change |
|
||||||
|
|
Ended June 30, |
|
Ended June 30, |
|
3 Mos |
|
6 Mos |
|
||||
|
|
2005 |
|
2004 |
|
2005 |
|
2004 |
|
05 / 04 |
|
05 / 04 |
|
Rates Per Day Worked ($): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Anchor Handling Towing Supply Domestic |
|
23,850 |
|
19,115 |
|
28,075 |
|
17,417 |
|
25 |
% |
61 |
% |
Anchor Handling Towing Supply Foreign |
|
10,228 |
|
9,539 |
|
10,741 |
|
9,048 |
|
7 |
% |
19 |
% |
Crew Domestic |
|
4,010 |
|
3,049 |
|
4,758 |
|
3,044 |
|
32 |
% |
56 |
% |
Crew Foreign |
|
4,768 |
|
4,127 |
|
4,737 |
|
4,099 |
|
16 |
% |
16 |
% |
Mini-supply Domestic |
|
3,318 |
|
2,862 |
|
3,854 |
|
2,890 |
|
16 |
% |
33 |
% |
Mini-supply Foreign |
|
4,175 |
|
3,555 |
|
4,387 |
|
3,517 |
|
17 |
% |
25 |
% |
Other |
|
N/A |
|
N/A |
|
17,000 |
|
N/A |
|
N/A |
|
N/A |
|
Standby safety Foreign |
|
8,228 |
|
7,719 |
|
8,229 |
|
7,707 |
|
7 |
% |
7 |
% |
Supply Domestic |
|
7,255 |
|
5,994 |
|
9,416 |
|
6,149 |
|
21 |
% |
53 |
% |
Supply Foreign |
|
9,350 |
|
9,729 |
|
12,794 |
|
9,397 |
|
(4 |
)% |
36 |
% |
Towing Domestic |
|
10,083 |
|
6,040 |
|
11,687 |
|
6,047 |
|
67 |
% |
93 |
% |
Towing Foreign |
|
7,581 |
|
6,775 |
|
7,280 |
|
6,667 |
|
12 |
% |
9 |
% |
Overall Utilization: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Anchor Handling Towing Supply Domestic |
|
83.9 |
% |
68.3 |
% |
85.5 |
% |
68.3 |
% |
23 |
% |
25 |
% |
Anchor Handling Towing Supply Foreign |
|
75.3 |
% |
63.9 |
% |
75.0 |
% |
62.7 |
% |
18 |
% |
20 |
% |
Crew Domestic |
|
90.4 |
% |
87.3 |
% |
88.3 |
% |
83.4 |
% |
4 |
% |
6 |
% |
Crew Foreign |
|
84.0 |
% |
94.9 |
% |
86.3 |
% |
94.3 |
% |
(11 |
)% |
(8 |
)% |
Mini-supply Domestic |
|
92.1 |
% |
86.7 |
% |
87.3 |
% |
84.1 |
% |
6 |
% |
4 |
% |
Mini-supply Foreign |
|
56.8 |
% |
86.5 |
% |
39.4 |
% |
84.6 |
% |
(34 |
)% |
(53 |
)% |
Other |
|
0 |
% |
N/A |
|
16.6 |
% |
0 |
% |
0 |
% |
N/A |
|
Standby safety Foreign |
|
88.8 |
% |
85.9 |
% |
89.5 |
% |
86.4 |
% |
3 |
% |
4 |
% |
Supply Domestic |
|
95.9 |
% |
76.1 |
% |
80.9 |
% |
73.8 |
% |
26 |
% |
10 |
% |
Supply Foreign |
|
78.5 |
% |
72.8 |
% |
71.2 |
% |
73.1 |
% |
8 |
% |
(3 |
)% |
Towing Domestic |
|
91.0 |
% |
91.8 |
% |
86.7 |
% |
70.7 |
% |
(1 |
)% |
23 |
% |
Towing Foreign |
|
96.0 |
% |
61.8 |
% |
93.3 |
% |
64.9 |
% |
55 |
% |
44 |
% |
Overall Fleet |
|
87.9 |
% |
83.2 |
% |
85.7 |
% |
80.8 |
% |
6 |
% |
6 |
% |
11
|
|
Three Months |
|
Six Months |
|
Percent Change |
|
||||||
|
|
Ended June 30, |
|
Ended June 30, |
|
3 Mos |
|
6 Mos |
|
||||
|
|
2005 |
|
2004 |
|
2005 |
|
2004 |
|
05 / 04 |
|
05 / 04 |
|
Available Days: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Anchor Handling Towing Supply Domestic |
|
576 |
|
273 |
|
841 |
|
577 |
|
111 |
% |
46 |
% |
Anchor Handling Towing Supply Foreign |
|
728 |
|
741 |
|
1,389 |
|
1,465 |
|
(2 |
)% |
(5 |
)% |
Crew Domestic |
|
5,188 |
|
4,556 |
|
8,707 |
|
9,379 |
|
14 |
% |
(7 |
)% |
Crew Foreign |
|
1,509 |
|
1,365 |
|
2,836 |
|
2,730 |
|
11 |
% |
4 |
% |
Mini-supply Domestic |
|
2,275 |
|
2,435 |
|
3,812 |
|
4,892 |
|
(7 |
)% |
(22 |
)% |
Mini-supply Foreign |
|
152 |
|
273 |
|
273 |
|
546 |
|
(44 |
)% |
(50 |
)% |
Other |
|
91 |
|
N/A |
|
181 |
|
91 |
|
100 |
% |
99 |
% |
Standby safety Foreign |
|
1,911 |
|
1,911 |
|
3,801 |
|
3,822 |
|
0 |
% |
(1 |
)% |
Supply Domestic |
|
369 |
|
731 |
|
762 |
|
1,521 |
|
(50 |
)% |
(50 |
)% |
Supply Foreign |
|
450 |
|
910 |
|
1,008 |
|
1,820 |
|
(51 |
)% |
(45 |
)% |
Towing Domestic |
|
364 |
|
182 |
|
600 |
|
455 |
|
100 |
% |
32 |
% |
Towing Foreign |
|
811 |
|
837 |
|
1,621 |
|
1,863 |
|
(3 |
)% |
(13 |
)% |
Overall Fleet |
|
14,424 |
|
14,214 |
|
25,831 |
|
29,161 |
|
1 |
% |
(11 |
)% |
|
|
|
|
|
|
Percent |
|
|
|
As of June 30, |
|
Change |
|
||
|
|
2005 |
|
2004 |
|
05 / 04 |
|
Fleet Count: |
|
|
|
|
|
|
|
Anchor Handling Towing Supply Domestic |
|
8 |
|
4 |
|
100 |
% |
Anchor Handling Towing Supply Foreign |
|
13 |
|
14 |
|
(7 |
)% |
Crew Domestic |
|
57 |
|
49 |
|
16 |
% |
Crew Foreign |
|
24 |
|
26 |
|
(8 |
)% |
Mini-supply Domestic |
|
25 |
|
26 |
|
(4 |
)% |
Mini-supply Foreign |
|
4 |
|
5 |
|
(20 |
)% |
Other |
|
2 |
|
1 |
|
100 |
% |
Standby safety Foreign |
|
27 |
|
27 |
|
0 |
% |
Supply Domestic |
|
5 |
|
8 |
|
(38 |
)% |
Supply Foreign |
|
9 |
|
14 |
|
(36 |
)% |
Towing Domestic |
|
4 |
|
2 |
|
100 |
% |
Towing Foreign |
|
28 |
|
31 |
|
(10 |
)% |
Overall Fleet |
|
206 |
|
207 |
|
(1 |
)% |
Environmental Services
|
|
For the Three Months Ended June 30, |
|
For the Six Months Ended June 30, |
|
Percent Change |
|
||||||||||||||||||
|
|
2005 |
|
2004 |
|
2005 |
|
2004 |
|
3 Mos |
|
6 Mos |
|
||||||||||||
(in thousands) |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
05 / 04 |
|
05 / 04 |
|
||||
Operating Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
United States |
|
$ |
31,662 |
|
89 |
% |
$ |
13,086 |
|
89 |
% |
$ |
62,960 |
|
88 |
% |
$ |
28,603 |
|
92 |
% |
142 |
% |
120 |
% |
Foreign |
|
3,973 |
|
11 |
% |
1,568 |
|
11 |
% |
8,568 |
|
12 |
% |
2,443 |
|
8 |
% |
153 |
% |
251 |
% |
||||
|
|
$ |
35,635 |
|
100 |
% |
$ |
14,654 |
|
100 |
% |
$ |
71,528 |
|
100 |
% |
$ |
31,046 |
|
100 |
% |
143 |
% |
130 |
% |
Operating Income |
|
$ |
3,375 |
|
9 |
% |
$ |
816 |
|
6 |
% |
$ |
7,939 |
|
11 |
% |
$ |
1,770 |
|
6 |
% |
314 |
% |
349 |
% |
Operating Revenues. Results improved in both the Current Year Quarter and Current Six Months due largely to increased spill response activities, retainer fees and expanded services internationally. Environmental Services completed its response in the Current Year Quarter to a major oil spill on the Delaware River that began in December 2004. Retainer fees charged by Environmental Services for ensuring by contract the availability of response services and equipment to customers were increased in the first quarter of 2005. Environmental Services commenced oil spill response services in the Caspian region in the third quarter of 2004.
Spill response activities approximated 20% and 36%, of Environmental Services operating revenues in the Current Year Quarter and Current Six Months, respectively, compared to 16% and 22% in the Prior Year Quarter and Prior Six Months.
12
Operating Income. Results improved in the Current Year Quarter and Current Six Months due to improved operating revenues and profitability on spill response and retainer activities.
The operating results of Environmental Services are very dependent on the number of spills in a given period and the magnitude of each spill. Consequently, spill response revenues and related profits can vary materially between comparable periods, and the operating revenues and profits earned in any one period are not indicative of a trend or of anticipated results in future periods.
Cost of oil spill response activities can include payments to sub-contractors for labor, equipment and materials and/or the direct charge of labor, equipment and materials provided by Environmental Services. Profits earned on equipment intensive responses tend to be better than profits earned on labor intensive responses. The cost of equipment is largely fixed in relation to the capital investment whereas the cost of labor is variable. Further, labor costs can increase significantly when overtime payments are required as is typically in the case with emergency responses that occur outside of normal business hours. Profit margins can also vary based on the use of our own personnel and equipment resources versus the use of third party personnel and equipment.
Inland River Services
|
|
For the Three Months Ended June 30, |
|
For the Six Months Ended June 30, |
|
Percent Change |
|
||||||||||||||||||
|
|
2005 |
|
2004 |
|
2005 |
|
2004 |
|
3 Mos |
|
6 Mos |
|
||||||||||||
(in thousands) |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
05 / 04 |
|
05 / 04 |
|
||||
Operating Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U. S. only |
|
$ |
27,333 |
|
100 |
% |
$ |
10,038 |
|
100 |
% |
$ |
52,863 |
|
100 |
% |
$ |
18,614 |
|
100 |
% |
172 |
% |
184 |
% |
Operating Income |
|
$ |
7,092 |
|
26 |
% |
$ |
932 |
|
9 |
% |
$ |
14,756 |
|
28 |
% |
$ |
1,948 |
|
10 |
% |
661 |
% |
657 |
% |
Operating Revenues. Fleet expansion, as a consequence of additional barges and towboats entering service, significantly increased Inland River Services operating revenues in the Current Year Quarter and Current Six Months. Net fleet additions included 358 dry cargo hopper barges, 36 chemical tank barges and 3 towboats since the beginning of 2004. Fleet growth increased available operating barge days 53% in the Current Six Months.
Operating revenues also increased in the Current Year Quarter and Current Six Months due to rising freight rates for dry bulk commodities. Demand strengthened for non-grain commodity shipping capacity. Availability of dry cargo barges declined due to an aging industry-wide fleet. Freight rates additionally improved in the Current Six Months as a result of shortages in supply of dry cargo barges in the first quarter of 2005 caused by adverse river conditions.
As of June 30, 2005, Inland River Services operated a fleet of 1,114 dry cargo hopper barges, of which 719 were owned, 182 were chartered in, 207 were managed and 6 were six joint ventured. Inland River Services also owns 36 chemical tank barges and 6 towboats, 3 of which are joint-ventured.
Operating Income. Operating income increased in the Current Year Quarter and Current Six Months due to barge fleet expansion and improved profitability that resulted from increased freight rates. These operating income improvements were partly offset by higher operating expenses. Barge towing expenses increased significantly due primarily to rising fuel costs.
Helicopter Services
|
|
For the Three Months Ended June 30, |
|
For the Six Months Ended June 30, |
|
Percent Change |
|
||||||||||||||||||
|
|
2005 |
|
2004 |
|
2005 |
|
2004 |
|
3 Mos |
|
6 Mos |
|
||||||||||||
(in thousands) |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
05 / 04 |
|
05 / 04 |
|
||||
Operating Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U. S. |
|
$ |
27,184 |
|
98 |
% |
$ |
6,680 |
|
100 |
% |
$ |
48,783 |
|
99 |
% |
$ |
12,507 |
|
100 |
% |
307 |
% |
290 |
% |
Foreign |
|
508 |
|
2 |
% |
|
|
0 |
% |
508 |
|
1 |
% |
|
|
0 |
% |
100 |
% |
100 |
% |
||||
|
|
27,692 |
|
100 |
% |
6,680 |
|
100 |
% |
49,291 |
|
100 |
% |
12,507 |
|
100 |
% |
315 |
% |
294 |
% |
||||
Operating Income (Loss) |
|
$ |
1,738 |
|
6 |
% |
$ |
(1,308 |
) |
(20 |
)% |
$ |
(2,657 |
) |
(5 |
)% |
$ |
(3,203 |
) |
(26 |
)% |
233 |
% |
17 |
% |
Operating Revenues. Operating revenues increased in the Current Year Quarter and Current Six Months due principally to fleet expansion in Helicopter Services. On December 31, 2004, the Company acquired Era from Rowan Companies, Inc. At acquisition, Era owned 81 helicopters.
13
Operating Income (Loss). Results improved for Helicopter Services in the Current Year Quarter and Current Six Months due to the Era acquisition.
Results also improved in comparison to the immediately preceding quarter. Twenty-two Era helicopters that support seasonal firefighting and flightseeing activities commenced operation in the Current Year Quarter. Additionally, Eras maintenance expenses decreased between quarters as repairs were accelerated in the preceding quarter for helicopters entering seasonal service.
The operating results of Helicopter Services in the Current Year Quarter and Current Six Months included approximately $0.2 million and $0.9 million, respectively, of nonrecurring charges, principally associated with the integration of Era.
As of June 30, 2005, Helicopter Services operated a fleet of 99 owned, 16 leased-in and 1 managed helicopter.
Other and Corporate, included in Operating Income
|
|
For the Three Months Ended June 30, |
|
For the Six Months Ended June 30, |
|
Percent Change |
|
||||||||||||||||||
|
|
2005 |
|
2004 |
|
2005 |
|
2004 |
|
3 Mos |
|
6 Mos |
|
||||||||||||
(in thousands) |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
05 / 04 |
|
05 / 04 |
|
||||
Fixed Base Operation |
|
$ |
1,067 |
|
(31 |
)% |
$ |
|
|
0 |
% |
$ |
1,488 |
|
(21 |
)% |
$ |
|
|
0 |
% |
N/A |
|
N/A |
|
Corporate expense |
|
(4,516 |
) |
131 |
% |
(3,369 |
) |
100 |
% |
(8,704 |
) |
121 |
% |
(6,374 |
) |
100 |
% |
(34 |
)% |
(37 |
)% |
||||
Other |
|
|
|
0 |
% |
|
|
0 |
% |
5 |
|
0 |
% |
|
|
|
|
N/A |
|
N/A |
|
||||
|
|
$ |
(3,449 |
) |
100 |
% |
$ |
(3,369 |
) |
100 |
% |
$ |
(7,211 |
) |
100 |
% |
$ |
(6,374 |
) |
100 |
% |
|
|
|
|
Fixed Base Operation, acquired in the December 31, 2004 Era acquisition, sells fuel and provides ground services to transient corporate aircraft at the Ted Stevens Anchorage International Airport. Corporate expenses increased in the Current Year Quarter and Current Six Months due to increased business development, public filing and incentive based compensation plan costs.
Other, net
|
|
For the Three Months Ended June 30, |
|
For the Six Months Ended June 30, |
|
Percent Change |
|
||||||||||||||||||
|
|
2005 |
|
2004 |
|
2005 |
|
2004 |
|
3 Mos |
|
6 Mos |
|
||||||||||||
(in thousands) |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
05 / 04 |
|
05 / 04 |
|
||||
Net interest expense |
|
$ |
(3,066 |
) |
(30 |
)% |
$ |
(3,725 |
) |
187 |
% |
$ |
(6,978 |
) |
(67 |
)% |
$ |
(7,724 |
) |
300 |
% |
18 |
% |
10 |
% |
Derivative loss, net |
|
(178 |
) |
(2 |
)% |
(560 |
) |
28 |
% |
(1,768 |
) |
(17 |
)% |
(481 |
) |
19 |
% |
68 |
% |
(268 |
)% |
||||
Foreign currency transaction gains (losses), net |
|
4,401 |
|
44 |
% |
(689 |
) |
35 |
% |
3,852 |
|
37 |
% |
(223 |
) |
9 |
% |
739 |
% |
1,827 |
% |
||||
Marketable securities sale gains, net |
|
8,502 |
|
84 |
% |
2,753 |
|
(138 |
)% |
14,736 |
|
141 |
% |
5,502 |
|
(214 |
)% |
209 |
% |
168 |
% |
||||
Other, net |
|
440 |
|
4 |
% |
233 |
|
(12 |
)% |
640 |
|
6 |
% |
352 |
|
(14 |
)% |
89 |
% |
82 |
% |
||||
|
|
$ |
10,099 |
|
100 |
% |
$ |
(1,988 |
) |
100 |
% |
$ |
10,482 |
|
100 |
% |
$ |
(2,574 |
) |
100 |
% |
|
|
|
|
Combined other income and expense activities improved profitability in the Current Year Quarter and Current Six Months. Net interest expense declined in 2005 as increased interest earnings on temporary cash investments exceeded rising interest expense that resulted from the Companys sale in December 2004 of $250.0 million of its 2.875% convertible senior debentures. Losses recognized on derivative transactions in all reported periods related primarily to foreign currency contracts. Foreign currency transaction gains and losses in all reported periods resulted from the effect of currency exchange rate changes with respect to loans between SEACOR and certain of its foreign subsidiaries and other transactions denominated in currencies other than the functional currency of various SEACOR subsidiaries. Marketable securities sale gains in all reported periods included net gains from the sale of equity and fixed income marketable securities and short-sale positions.
Income Taxes
As a result of the American Jobs Creation Act of 2004, the Company believes it will be in the position to repatriate, for a limited time, accumulated foreign earnings at an effective federal tax rate of 5.25%, which would result in tax obligations significantly less than the deferred taxes previously provided for its unremitted earnings of foreign subsidiaries. The Company is exploring the full impact of the legislation and will finalize its repatriation plan during 2005. In accordance with FASB Staff Position FAS 109-2, the Company will recognize the income tax benefit of this special one-time dividends received deduction during the period that the Company has decided on a plan for repatriation.
14
Equity Earnings
Equity earnings increased $1.9 million, or 285%, to $2.6 million in the Current Year Quarter from $0.7 million in the Prior Year Quarter and $3.0 million, or 239%, to $4.2 million in the Current Six Months from $1.2 million in the Prior Six Months. Operating results improved in several entities in which the Company owns a 50% or less equity interest, including its bulk carrier joint venture and certain offshore marine and environmental joint ventures. Additionally, results for 2004 included a loss on the disposition of an Asian joint venture as well as an impairment charge relating to the Companys investment in an entity that develops and sells software to the ship brokerage and shipping industry.
Loss from Discontinued Operations
On December 31, 2004, the Company acquired all of the issued and outstanding shares of Era, the owner of 81 helicopters and 16 fixed wing aircraft. Immediately following the acquisition of Era, the Company combined Eras helicopter business with its pre-existing helicopter services and began a process to sell Eras regional airline service business, including its fixed wing aircraft. Effective May 27, 2005, the Company sold Eras regional airline service business, previously held for sale, for cash of $15.0 million. The operating results of the regional airline service business, including $15.3 million of operating revenues earned in the Current Six Months, have been reported as Discontinued Operations in the Companys Condensed Consolidated Statement of Operations.
General
The Companys ongoing liquidity requirements arise primarily from the funding of working capital needs, acquisition, construction or improvement of equipment, repayment of debt obligations, repurchase of Common Stock and purchase of other investments. Principal sources of liquidity are cash balances, marketable securities, construction reserve funds, cash flows from operations and borrowings under the Companys revolving credit facility although, from time to time, the Company may issue debt, shares of Common Stock, preferred stock, or a combination thereof, or sell vessels and other assets to finance the acquisition of equipment and businesses or make improvements to existing equipment. Fleet size, rates of hire and utilization of the Companys offshore support vessels, inland barges and helicopters and the number and severity of oil spills managed by Environmental Services primarily determine the Companys levels of operating cash flows.
Summary of Cash Flows
|
|
For the Six Months Ended June 30, |
|
||||
(in thousands) |
|
2005 |
|
2004 |
|
||
Cash flows provided by or (used) in: |
|
|
|
|
|
||
Operating activities |
|
$ |
49,076 |
|
$ |
268 |
|
Investing activities |
|
117,019 |
|
(48,898 |
) |
||
Financing activities |
|
(985 |
) |
(2,495 |
) |
||
Effect of exchange rate changes on cash |
|
(2,310 |
) |
847 |
|
||
Net increase (decrease) in cash and cash equivalents |
|
$ |
162,800 |
|
$ |
(50,278 |
) |
Operating Activities
Cash flows from operating activities improved in the Current Six Months due primarily to improved operating results in all of the Companys lines of business (see Consolidated Results of Operations discussion above).
Investing Activities
Cash flows from investing activities improved in the Current Six Months primarily from increased proceeds from equipment and marketable securities sales and as a result of withdrawals from construction reserve funds for future purchase of vessels or barges. These additional cash flows were partially offset by an increase in purchases of equipment and marketable securities.
15
Capital expenditures aggregated $145.0 million in the Current Six Months. Equipment deliveries during the period included 4 used anchor handling towing supply vessels and 1 new crew vessel, 45 new dry cargo covered hopper and 16 new chemical tank barges. Also in the Current Six Months, the Company sold 11 offshore support vessels, 4 helicopters, held for sale assets and other equipment for aggregate consideration of $112.3 million.
In the Current Six Months, the Company withdrew $50.9 million from its joint depository construction reserve fund accounts with consent of the Maritime Administration. The withdrawals reimbursed the Company for prior purchases of dry cargo hopper and chemical tank barges and an anchor handling towing supply vessel. These withdrawals were partly offset by the Companys deposit into its joint depository construction reserve fund accounts of additional offshore support vessel sale proceeds and interest earned on invested fund balances.
Construction reserve fund accounts were established by the Company pursuant to Section 511 of the Merchant Marine Act, 1936, as amended. In accordance with the statute, the Company has been permitted to deposit proceeds from the sale of certain vessels into the joint depository construction reserve fund accounts for the purpose of acquiring U.S. flag vessels and qualifying for the temporary deferral of taxable gains realized from the sale of vessels.
The Companys unfunded capital commitments as of June 30, 2005 for new helicopters, new dry cargo covered hopper barges, new offshore support vessels and other equipment totaled $342.7 million. Of these commitments, up to approximately $160.0 million may be terminated without liability other than the payment of liquidated damages of $3.0 million in the aggregate. Deliveries are expected in 2005 through 2009 for helicopters, 2006 through 2007 for barges, and 2005 for offshore support vessels. In addition to these purchase commitments, the Company has placed refundable deposits on additional new helicopters.
Financing Activities
Cash flows from financing activities improved in the Current Six Months due primarily to a reduction in purchases of Common Stock, increased borrowings under the Companys revolving credit facility and additional cash received on exercise of stock options significantly offset by repayment of an obligation due an offshore vessel builder.
In the Current Six Months, the Company acquired a total of 84,647 shares of Common Stock for treasury at an aggregate cost of $5.6 million. As of June 30, 2005, $37.7 million of repurchase authority granted by the Companys Board of Directors remains available for acquisition of additional shares of Common Stock and the Companys 7.2% Notes and its 5-7/8% Notes. Securities are acquired from time to time through open market purchases, privately negotiated transactions or otherwise, depending on market conditions.
Total assets of the Company increased 2% to $1.8 billion in 2005. The Companys combined cash, available-for-sale securities and construction reserve funds increased 8% to $533.4 million and represented 30% of total assets at June 30, 2005. Net property and equipment increased 1% to $934.2 million and represented 52% of the Companys total assets at June 30, 2005. Net working capital increased 18% to $539.7 million in 2005. Since December 31, 2004, long-term debt increased $15.1 million to $597.5 million.
As of August 3, 2005, the Company had $132.8 million available under a five year, non-reducing, unsecured $200.0 million revolving credit facility that terminates in February 2007.
16
The Companys long-term liquidity is dependent upon its ability to generate operating cash flows sufficient to meet its requirements for working capital, capital expenditures and a reasonable return on shareholders investment. The Company believes that earning such operating cash flows will permit it to maintain its access to favorably priced debt, equity and off-balance sheet financing arrangements.
Seabulk Merger
On July 1, 2005, SEACOR completed its merger with Seabulk International, Inc. (Seabulk). With a fleet of 144 vessels, Seabulk is a leading provider of marine support and transportation services, primarily to the energy and chemical industries. Seabulks offshore energy services fleet supports operators of offshore oil and gas exploration, development and production facilities in the Gulf of Mexico, the Arabian Gulf, offshore West Africa, South America and Southeast Asia. Seabulks tanker fleet, principally comprised of U.S.-flag ships, transports petroleum products, crude oil and chemicals. Seabulks marine towing fleet provides harbor towing services from ports in Florida, Alabama, Louisiana and Texas and offshore towing services primarily in the Gulf of Mexico.
Under the terms of the merger agreement, Seabulks stockholders received 0.2694 shares of Common Stock, plus cash of $4.00 for each issued and outstanding share of Seabulk common stock. Based on SEACORs closing price of $64.30 on June 30, 2005, Seabulk stockholders have received $21.32 in SEACOR stock and cash for each share of Seabulk common stock exchanged. Seabulk stock ceased trading at the close of business on June 30, 2005.
The aggregate equity value of the transaction was approximately $521.7 million, based on SEACOR issuing 6,354,642 shares of Common Stock, 394,446 options to purchase Common Stock, plus additional cash consideration of approximately $94.4 million. The cash portion of the transaction was financed with $50.0 million of additional borrowings under SEACORs existing revolving credit facility and internally generated funds.
In the normal course of its business, the Company becomes involved in various litigation matters including, among other things, claims by third parties for alleged property damages, personal injuries and other matters. While the Company believes it has meritorious defenses against these claims, management has used estimates in determining the Companys potential exposure and has recorded reserves in its financial statements related thereto where appropriate. It is possible that a change in the Companys estimates of that exposure could occur, but the Company does not expect such changes in estimated costs will have a material effect on the Companys financial position or results of its operations.
A subsidiary of SEACOR has received a document subpoena from the Antitrust Division of the U.S. Department of Justice. This subpoena relates to a grand jury investigation of potential antitrust violations among providers of helicopter transportation services in the Gulf of Mexico. The Company believes that this subpoena is part of a broader industry inquiry and that the other providers also have received such subpoenae. Seacor intends to provide all information requested in the response to this investigation.
New Accounting Pronouncement
On December 16, 2004, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 123 (revised 2004), Share-Based Payment, which is a revision of FASB Statement No. 123, Accounting for Stock-Based Compensation. Statement 123 (R) supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees, and amends FASB Statement No. 95, Statement of Cash Flows. Statement 123 (R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. The impact of adopting Statement 123 (R) cannot be predicted at this time because it will depend on levels of share-based payments granted in the future. However, had the Company adopted Statement 123 (R) in prior periods, the impact of that standard would have approximated the impact of the SFAS 123 disclosure of pro forma net income and earnings per share presented in note 13 of the condensed consolidated financial statements included in Item 1 of this Quarterly Report. The Company will adopt the provisions of Statement 123 (R) on January 1, 2006 using the modified prospective approach, recognizing compensation expense for all unvested employee stock options as of that date and for all subsequent employee stock options granted thereafter.
17
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There has been no significant change in the Companys exposure to market risk during the six-months ended June 30, 2005. For discussion of the Companys exposure to market risk, refer to Item 7A, Quantitative and Qualitative Disclosures about Market Risk, contained in the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2004.
ITEM 4. CONTROLS AND PROCEDURES
The Companys management, with the participation of the Companys Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Companys disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)), as of June 30, 2005. Based on their evaluation, the Companys Chief Executive Officer and Chief Financial Officer concluded that the Companys disclosure controls and procedures were effective as of June 30, 2005.
In conducting management's evaluation of the effectiveness of the Company's internal control over financial reporting, the operations of Era, acquired on December 31, 2004, were excluded. This business constituted approximately $106 million of total assets as of June 30, 2005.
The Company has recently completed the implementation of a suite of software applications used to accumulate financial data for reporting the business activities of an Environmental Services West Coast operation and Helicopter Services Era operations. This software application implementation was not made in response to any deficiency in the Companys internal controls and the same suite of software applications have been generally used in the Companys worldwide operation since the beginning of 2003.
Except for the preceding change, there was no change in the Companys internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the Current Six Months that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.
18
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
(c) This table provides information with respect to purchases by the Company of shares of its Common Stock during the Current Year Quarter:
Period |
|
Total Number of |
|
Average Price Paid |
|
Total Number of Shares |
|
Approximate Dollar Value |
|
|
April 1 30, 2005 |
|
|
|
N/A |
|
|
|
$ |
37,704,005 |
|
May 1 31, 2005 |
|
|
|
N/A |
|
|
|
$ |
37,704,005 |
|
June 1 30, 2005 |
|
|
|
N/A |
|
|
|
$ |
37,704,005 |
|
Total |
|
|
|
N/A |
|
|
|
|
|
(1) Beginning in February 1997 and increased at various times through November 2003, the Board of Directors authorized the repurchase of $347.0 million of Common Stock, debt or combination thereof. Through June 30, 2005, the Company has repurchased $231.1 million and $78.2 million of Common Stock and debt, respectively.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The annual meeting of stockholders of SEACOR was held on June 27, 2005. The following table gives a brief description of each matter voted upon at that meeting and, as applicable, the number of votes cast for, against or withheld, as well as the number of abstentions and broker non-votes.
Description of Matter |
|
For |
|
Against |
|
Withheld |
|
Abstentions |
|
Broker Non-Votes |
|
|
|
|
|
|
|
|
|
|
|
|
|
1. Election of Directors: |
|
|
|
|
|
|
|
|
|
|
|
Charles Fabrikant |
|
17,058,309 |
|
N/A |
|
210,037 |
|
N/A |
|
N/A |
|
Andrew Morse |
|
13,089,380 |
|
N/A |
|
4,178,966 |
|
N/A |
|
N/A |
|
Michael E. Gellert |
|
17,086,459 |
|
N/A |
|
181,887 |
|
N/A |
|
N/A |
|
Stephen Stamas |
|
17,045,458 |
|
N/A |
|
222,888 |
|
N/A |
|
N/A |
|
Richard M. Fairbanks III |
|
17,148,177 |
|
N/A |
|
120,169 |
|
N/A |
|
N/A |
|
Pierre de Demandolx |
|
17,146,779 |
|
N/A |
|
121,567 |
|
N/A |
|
N/A |
|
John C. Hadjipateras |
|
17,212,972 |
|
N/A |
|
55,374 |
|
N/A |
|
N/A |
|
Oivind Lorentzen |
|
17,212,972 |
|
N/A |
|
55,374 |
|
N/A |
|
N/A |
|
James A.F. Cowderoy |
|
17,082,102 |
|
N/A |
|
186,244 |
|
N/A |
|
N/A |
|
Steven J. Wisch |
|
17,212,972 |
|
N/A |
|
55,374 |
|
N/A |
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
2. The appointment of Ernst & Young LLP as the Companys independent auditors for the fiscal year ending December 31, 2005 |
|
17,209,059 |
|
59,226 |
|
N/A |
|
61 |
|
0 |
|
3. An amendment to SEACORs restated certificate of incorporation to increase the number of authorized shares of common stock from 40,000,000 to 60,000,000 |
|
17,092,252 |
|
175,419 |
|
N/A |
|
675 |
|
0 |
|
4. To approve the issuance of SEACOR common stock in the merger of Seabulk International, Inc. with a wholly owned subsidiary of SEACOR |
|
15,355,204 |
|
23,261 |
|
N/A |
|
175 |
|
1,889,706 |
|
19
31.1 Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.
31.2 Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.
32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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 thereunto duly authorized.
|
|
SEACOR Holdings Inc. |
||
|
|
|
||
DATE: AUGUST 9, 2005 |
|
By: |
/s/ Charles Fabrikant |
|
|
|
Charles Fabrikant, Chairman of the Board, |
||
|
|
President and Chief Executive Officer |
||
|
|
(Principal Executive Officer) |
||
|
|
|
||
DATE: AUGUST 9, 2005 |
|
By: |
/s/ Randall Blank |
|
|
|
Randall Blank, Executive Vice President, |
||
|
|
Chief Financial Officer and Secretary |
||
|
|
(Principal Financial Officer) |
20
EXHIBIT INDEX
31.1 Certification by the Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.
31.2 Certification by the Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.
32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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Exhibit 31.1
CERTIFICATION
I, Charles Fabrikant, certify that:
1. I have reviewed this quarterly report on Form 10-Q of SEACOR Holdings Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: August 9, 2005 |
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/s/ Charles Fabrikant |
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Name: |
Charles Fabrikant |
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Title: |
Chief Executive Officer |
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Exhibit 31.2
CERTIFICATION
I, Randall Blank, certify that:
1. I have reviewed this quarterly report on Form 10-Q of SEACOR Holdings Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: August 9, 2005 |
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/s/ Randall Blank |
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Name: |
Randall Blank |
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Title: |
Chief Financial Officer |
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Exhibit 32.1
CERTIFICATION
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED BY SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Charles Fabrikant, as Chief Executive Officer of SEACOR Holdings Inc. (the Company), certify, pursuant to 18 U.S.C. § 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
(1) the accompanying Quarterly Report on Form 10-Q for the period ending June 30, 2005 as filed with the U.S. Securities and Exchange Commission (the Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: August 9, 2005
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/s/ Charles Fabrikant |
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Charles Fabrikant |
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Chief Executive Officer |
Exhibit 32.2
CERTIFICATION
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED BY SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Randall Blank, as Chief Financial Officer of SEACOR Holdings Inc. (the Company), certify, pursuant to 18 U.S.C. § 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
(1) the accompanying Quarterly Report on Form 10-Q for the period ending June 30, 2005 as filed with the U.S. Securities and Exchange Commission (the Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: August 9, 2005
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/s/ Randall Blank |
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Randall Blank |
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Chief Financial Officer |