SEACOR Holdings Announces Second Quarter Results
FORT LAUDERDALE, Fla., July 26 /PRNewswire-FirstCall/ -- SEACOR Holdings Inc. announced net income for the second quarter ended June 30, 2006 of $62.8 million, or $2.24 per diluted share, on operating revenues of $331.0 million. For the six months ended June 30, 2006, net income was $112.9 million, or $4.04 per diluted share, on operating revenues of $636.9 million.
For the second quarter ended June 30, 2005, net income was $25.1 million, or $1.20 per diluted share, on operating revenues of $177.8 million. For the six months ended June 30, 2005, net income was $43.7 million, or $2.11 per diluted share, on operating revenues of $343.0 million. The results for the three and six months ended June 30, 2005 do not include Seabulk International, Inc. which was acquired by the Company on July 1, 2005.
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For the immediately preceding quarter ended March 31, 2006, the Company reported net income of $50.1 million, or $1.80 per diluted share, on operating revenues of $305.9 million.
Highlights for the Quarter
Offshore Marine Services -- Operating income(1) in the second quarter was $70.8 million on operating revenues of $168.3 million compared to operating income of $66.1 million on operating revenues of $159.9 million in the preceding quarter. Second quarter results included $22.5 million in gains on asset dispositions compared to $20.6 million in gains in the preceding quarter.
Overall fleet utilization was higher in the second quarter at 86.8% compared to 85.3% in the preceding quarter. In the second quarter the number of days available for charter was lower by 1,114 days, or 4.9% primarily as a result of a reduction in the overall fleet count following asset dispositions.
The improvement in operating revenues was primarily driven by an 8.1% improvement in average day rates from $8,006 per day to $8,658 per day. The most significant improvements were in the Gulf of Mexico and West Africa, where average day rates increased by 12.6% and 8.1%, respectively.
Operating expenses in the second quarter were $86.7 million, an increase of $7.2 million over the preceding quarter. Of this increase, approximately $3.1 million was related to the cost of chartering-in third party vessels for brokered vessel activity and procuring additional labor to provide cargo handling services. The majority of these charges was offset by additional revenues and thus had minimal impact on operating margins. Other increases related to higher dry-dock and repair expenditures and higher wage rates in response to a competitive labor market for seafarers in all regions.
Marine Transportation Services -- Operating income in the second quarter was $8.2 million on operating revenues of $37.4 million compared to operating income of $5.1 million on operating revenues of $37.7 million in the preceding quarter.
The increase in operating income was primarily due to lower operating expenses. Fuel and port charges were lower in the second quarter as only two vessels operated on voyage charters compared to three in the preceding quarter. There were no dry-dock related costs in the current quarter.
Inland River Services -- Operating income in the second quarter was $13.6 million on operating revenues of $36.3 million compared to operating income of $14.8 million on operating revenues of $34.5 million in the preceding quarter.
The improvement in operating revenues was primarily due to additions to the owned fleet of dry hopper and tank barges and favorable operating conditions on the river system through most of the quarter. Operating expenses were higher in the second quarter primarily due to increased towing costs and vendor service charges. These increases were caused by higher fuel and labor costs as well as seasonal operating patterns that resulted in more loadings on the upper Mississippi and thus longer barge voyages.
Aviation Services -- Operating income in the second quarter was $3.8 million on operating revenues of $39.9 million compared to an operating loss of $0.3 million on operating revenues of $33.5 million in the preceding quarter.
The improvement was primarily due to the resumption of seasonal flight- seeing activity in Alaska, an increase in the amount of lease revenue and the impact of additional equipment to support higher levels of activity in the Gulf of Mexico. Second quarter results included $1.8 million in gains on asset dispositions compared to $0.3 million in gains in the preceding quarter.
Environmental Services -- Operating income in the second quarter was $4.5 million on operating revenues of $36.9 million compared to operating income of $2.3 million on operating revenues of $27.9 million in the preceding quarter.
The improvement in operating income was primarily due to higher revenues from retainer services contracts and an increase in spill response activity.
Derivative Transactions -- Derivative transactions, primarily consisting of interest rate swaps and foreign currency contracts, resulted in gains of $3.1 million in the second quarter as compared to losses of $2.8 million in the preceding quarter.
Foreign Currency Transactions -- Foreign currency transaction gains were $1.2 million in the second quarter compared to gains of $0.2 million in the preceding quarter.
Marketable Security Transactions -- Marketable security and short sale transactions resulted in losses of $3.3 million in the second quarter as compared to losses of $3.6 million in the preceding quarter.
Equity in Earnings of 50% or Less owned Companies -- Earnings were $6.0 million in the second quarter compared to $6.4 million in the preceding quarter. In the second quarter one of the Company's offshore marine joint ventures sold a vessel to a third party and the Company's share of the gain on the sale was $4.2 million. In the preceding quarter the Company disposed of its interest in a joint venture in Mexico and realized a gain of $4.5 million.
Weighted Average Shares Outstanding -- Weighted average diluted shares outstanding were 28,568,267 for the quarter ended June 30, 2006 compared to 21,923,636 for the quarter ended June 30, 2005. The increase was mainly due to the issuance of 6,354,642 shares as part of the acquisition of Seabulk International, Inc.
Capital Commitments -- The Company's unfunded capital commitments as of June 30, 2006 consisted primarily of marine service vessels, helicopters and barges and totaled $631.7 million, of which $429.7 million is payable in 2006 and 2007, with the remaining balance payable through 2009. Subsequent to the end of the quarter the Company committed to purchase additional equipment for $22.6 million. Of these commitments, approximately $187.8 million may be terminated without further liability other than the payment of liquidated damages of $4.9 million in the aggregate. As of June 30, 2006 the Company held balances of Cash, Cash Equivalents, Restricted Cash, Securities, Construction Reserve Funds and Title XI Reserve Funds totaling $803.4 million.
(1) See attached schedule "OPERATING INCOME (LOSS) BY LINE OF BUSINESS" for components of operating income.
SEACOR is a global provider of marine support and transportation services, primarily to the energy and chemical industries. SEACOR and its subsidiaries provide customers with a full suite of marine-related services including offshore services, U.S. coastwise shipping, inland river services,helicopter services, environmental services, and offshore and harbor towing services. SEACOR is uniquely focused on providing highly responsive local service, combined with the highest safety standards, innovative technology, modern efficient equipment, and dedicated, professional employees.
This release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements concerning management's 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, activity in foreign countries and changes in foreign political, military and economic conditions, the dependence of Offshore Marine Services, Marine Transportation Services and Aviation Services on several customers, industry fleet capacity, consolidation of our customer base, the ongoing need to replace aging vessels, restrictions imposed by the Shipping Acts and Aviation Acts on the amount of foreign ownership of the Company's Common Stock, increased competition if the Jones Act is repealed, safety record requirements related to Offshore Marine Services and Aviation Services, changes in foreign and domestic oil and gas exploration and production activity, vessel and helicopter-related risks of Offshore Marine Services and Aviation Services, effects of adverse weather conditions and seasonality on Aviation Services, decreased demand for our tanker and towing services due to construction of additional refined petroleum product, natural gas or crude oil pipelines or due to decreased demand for refined petroleum products, crude oil or chemical products or a change in existing methods of delivery, future phase-out of our single-hull tankers, 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 NRC's OSRO classification, liability in connection with providing spill response services, 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, the effect of international economic and political factors in inland river operations, the intense competition faced by Inland River Services, adequacy of insurance coverage, compliance with government regulation, including environmental laws and regulations, currency exchange fluctuations, the attraction and retention of qualified personnel by the Company, our integration of the internal controls and procedures of Seabulk International, Inc. to continue our compliance with the Sarbanes-Oxley Act of 2002 and various other matters, many of which are beyond the Company's control and other factors. In addition, these statements constitute our cautionary statements under the Private Securities Litigation Reform Act of 1995. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider the following to be a complete discussion of all potential risks or uncertainties. The words "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. The forward-looking statements in this release should be evaluated together with the many uncertainties that affect our businesses, particularly those mentioned under "Forward-Looking Statements" in Item 7 of our Form 10-K and SEACOR's periodic reporting on Form 10-Q and Form 8-K (if any), which we incorporate by reference.
For additional information, contact Timothy McKeand, Vice President, at (954) 524-4200 ext. 820 or visit SEACOR's website at http://www.seacorholdings.com/.
SEACOR HOLDINGS INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data, unaudited) Three Months Ended Six Months Ended June 30, June 30, 2006 2005 2006 2005 Operating Revenues $330,986 $177,831 $636,901 $343,016 Costs and Expenses: Operating expenses 187,149 117,179 356,793 232,780 Administrative and general 32,865 19,329 64,358 37,824 Depreciation and amortization 42,318 18,492 85,578 36,774 262,332 155,000 506,729 307,378 Gains on Asset Dispositions 24,089 1,812 44,966 15,328 Operating Income 92,743 24,643 175,138 50,966 Other Income (Expense): Interest income 9,086 4,484 16,222 8,163 Interest expense (12,847) (7,550) (26,915) (15,141) Derivative transaction gains (losses), net 3,084 (178) 272 (1,768) Foreign currency transaction gains, net 1,217 4,401 1,376 3,852 Marketable security transaction gains (losses), net (3,341) 8,502 (6,926) 14,736 Other, net 595 440 623 640 (2,206) 10,099 (15,348) 10,482 Income from Continuing Operations Before Income Tax Expense, Minority Interest in Income of Subsidiaries and Equity In Earnings of 50% or Less Owned Companies 90,537 34,742 159,790 61,448 Income Tax Expense 33,703 12,448 59,134 22,188 Income from Continuing Operations Before Minority Interest in Income of Subsidiaries and Equity in Earnings of 50% or Less Owned Companies 56,834 22,294 100,656 39,260 Minority Interest in Income of Subsidiaries (104) (154) (187) (120) Equity in Earnings of 50% or Less Owned Companies 6,031 2,594 12,400 4,211 Income from Continuing Operations 62,761 24,734 112,869 43,351 Income from Discontinued Operations, Net of Tax - 390 - 364 Net Income $62,761 $25,124 $112,869 $43,715 Basic Earnings Per Common Share: Income from Continuing Operations $2.52 $1.35 $4.55 $2.37 Income from Discontinued Operations - 0.02 - 0.02 Net Income $2.52 $1.37 $4.55 $2.39 Diluted Earnings Per Common Share: Income from Continuing Operations $2.24 $1.18 $4.04 $2.09 Income from Discontinued Operations - 0.02 - 0.02 Net Income $2.24 $1.20 $4.04 $2.11 Weighted Average Common Shares Outstanding: Basic 24,869 18,349 24,828 18,299 Diluted 28,568 21,924 28,542 21,916 SEACOR HOLDINGS INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data, unaudited) Three Months Ended Jun. 30, Mar. 31, Dec. 31, Sep. 30, Jun. 30, 2006 2006 2005 2005 2005 Operating Revenues $330,986 $305,915 $334,119 $294,869 $177,831 Costs and Expenses: Operating expenses 187,149 169,644 177,012 180,136 117,179 Administrative and general 32,865 31,493 36,256 31,115 19,329 Depreciation and amortization 42,318 43,260 44,405 46,535 18,492 262,332 244,397 257,673 257,786 155,000 Gains (Losses) on Asset Dispositions and Impairments, Net 24,089 20,877 13,575 (618) 1,812 Operating Income 92,743 82,395 90,021 36,465 24,643 Other Income (Expense): Interest income 9,086 7,136 6,284 4,754 4,484 Interest expense (12,847) (14,068) (16,470) (16,541) (7,550) Derivative transaction gains (losses), net 3,084 (2,812) (881) (4,425) (178) Foreign currency transaction gains, net 1,217 159 16,895 2,436 4,401 Marketable security transaction gains (losses), net (3,341) (3,585) 2,957 10,388 8,502 Other, net 595 28 176 891 440 (2,206) (13,142) 8,961 (2,497) 10,099 Income from Continuing Operations Before Income Tax Expense (Benefit), Minority Interest in (Income) Loss of Subsidiaries and Equity In Earnings of 50% or Less Owned Companies 90,537 69,253 98,982 33,968 34,742 Income Tax Expense (Benefit) 33,703 25,431 (6,336) 13,894 12,448 Income from Continuing Operations Before Minority Interest in (Income) Loss of Subsidiaries and Equity in Earnings of 50% or Less Owned Companies 56,834 43,822 105,318 20,074 22,294 Minority Interest in (Income) Loss of Subsidiaries (104) (83) (71) 223 (154) Equity in Earnings of 50% or Less Owned Companies 6,031 6,369 1,250 200 2,594 Income from Continuing Operations 62,761 50,108 106,497 20,497 24,734 Income from Discontinued Operations, Net of Tax - - - - 390 Net Income $62,761 $50,108 $106,497 $20,497 $25,124 Basic Earnings Per Common Share: Income from Continuing Operations $2.52 $2.02 $4.28 $0.83 $1.35 Income from Discontinued Operations - - - - 0.02 Net Income $2.52 $2.02 $4.28 $0.83 $1.37 Diluted Earnings Per Common Share: Income from Continuing Operations $2.24 $1.80 $3.76 $0.76 $1.18 Income from Discontinued Operations - - - - 0.02 Net Income $2.24 $1.80 $3.76 $0.76 $1.20 Weighted Average Common Shares Outstanding: Basic 24,869 24,767 24,884 24,789 18,349 Diluted 28,568 28,495 28,618 28,562 21,924 Common Shares Outstanding at Period End 24,801 25,076 24,819 25,009 18,466 SEACOR HOLDINGS INC. OPERATING INCOME (LOSS) BY LINE OF BUSINESS (in thousands, unaudited) Three Months Ended Jun. 30, Mar. 31, Dec. 31, Sep. 30, Jun. 30, 2006 2006 2005 2005 2005 Offshore Marine Services Operating Revenues $168,285 $159,852 $168,823 $146,842 $84,043 Costs and Expenses: Operating expenses 86,695 79,506 85,377 82,726 50,735 Administrative and general 11,470 11,688 12,809 11,290 8,241 Depreciation and amortization 21,793 23,127 22,772 25,040 10,950 119,958 114,321 120,958 119,056 69,926 Gains on Asset Dispositions and Impairments, Net 22,489 20,552 6,578 (905) 1,770 Operating Income $70,816 $66,083 $54,443 $26,881 $15,887 Marine Transportation Services Operating Revenues $37,446 $37,724 $36,625 $35,723 - Costs and Expenses: Operating expenses 18,064 21,471 17,677 24,692 - Administrative and general 1,049 964 874 705 - Depreciation and amortization 10,162 10,185 11,641 11,663 - 29,275 32,620 30,192 37,060 - Gains on Asset Dispositions - - - - - Operating Income (Loss) $8,171 $5,104 $6,433 $(1,337) - Inland River Services Operating Revenues $36,339 $34,488 $40,666 $29,702 $27,333 Costs and Expenses: Operating expenses 18,649 15,395 18,498 17,203 16,880 Administrative and general 829 816 691 644 570 Depreciation and amortization 3,267 3,474 3,479 3,151 2,791 22,745 19,685 22,668 20,998 20,241 Gains on Asset Dispositions - - - - - Operating Income $13,594 $14,803 $17,998 $8,704 $7,092 Aviation Services Operating Revenues $39,903 $33,454 $38,856 $43,949 $30,949 Costs and Expenses: Operating expenses 29,137 26,345 26,960 30,583 22,346 Administrative and general 4,158 3,494 4,571 3,579 1,858 Depreciation and amortization 4,591 4,254 4,199 4,212 3,940 37,886 34,093 35,730 38,374 28,144 Gains on Asset Dispositions 1,818 325 7,024 306 - Operating Income (Loss) $3,835 $(314) $10,150 $5,881 $2,805 Environmental Services Operating Revenues $36,946 $27,923 $37,583 $27,466 $35,635 Costs and Expenses: Operating expenses 26,345 20,508 21,852 17,400 27,347 Administrative and general 5,156 4,405 4,669 4,546 4,177 Depreciation and amortization 741 733 664 901 778 32,242 25,646 27,185 22,847 32,302 Gains (Losses) on Asset Dispositions (215) - (27) (19) 42 Operating Income $4,489 $2,277 $10,371 $4,600 $3,375 Three Months Ended Jun. 30, Mar. 31, Dec. 31, Sep. 30, Jun. 30, 2006 2006 2005 2005 2005 Harbor and Offshore Towing Services Operating Revenues $12,156 $12,884 $11,949 $11,343 - Costs and Expenses: Operating expenses 8,336 6,841 7,043 7,673 - Administrative and general 1,851 1,604 1,663 1,333 - Depreciation and amortization 1,275 1,259 1,303 1,226 - 11,462 9,704 10,009 10,232 - Gains on Asset Dispositions - - - - - Operating Income $694 $3,180 $1,940 $1,111 - Corporate and Eliminations Operating Revenues $(89) $(410) $(383) $(156) $(129) Costs and Expenses: Operating expenses (77) (422) (395) (141) (129) Administrative and general 8,352 8,522 10,979 9,018 4,483 Depreciation and amortization 489 228 347 342 33 8,764 8,328 10,931 9,219 4,387 Losses on Asset Dispositions (3) - - - - Operating Loss $(8,856) $(8,738) $(11,314) $(9,375) $(4,516) SEACOR HOLDINGS INC. SELECTED CONSOLIDATED BALANCE SHEET DATA (in thousands, unaudited) Jun. 30, Mar. 31, Dec. 31, Sep. 30, Jun. 30, 2006 2006 2005 2005 2005 Cash, Cash Equivalents, Restricted Cash, Securities, Construction Reserve Funds, and Title XI Reserve Funds $803,360 $764,649 $684,521 $664,164 $533,417 Receivables 278,000 270,794 260,831 267,108 200,476 Current Assets 915,245 900,488 839,091 867,290 664,839 Net Property and Equipment 1,737,811 1,733,757 1,759,393 1,784,083 934,213 Total Assets 3,014,963 2,961,627 2,885,141 2,959,169 1,798,967 Current Portion of Long-term Debt and Capital Lease Obligations 8,970 10,420 10,505 13,164 41 Current Liabilities 287,797 280,279 247,906 209,396 125,114 Long-term Debt & Capital Lease Obligations 955,567 964,096 977,635 1,126,431 597,467 Stockholders' Equity 1,458,302 1,418,190 1,361,305 1,280,028 831,254
CONTACT: Timothy McKeand, Vice President of SEACOR Holdings Inc., +1-954-524-4200 ext. 820