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SEACOR SMIT Announces Fourth Quarter Results

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HOUSTON--(BUSINESS WIRE)--SEACOR SMIT Inc. (NYSE:CKH) announced net earnings for the fourth quarter ended December 31, 2002 of $1,638,000, or $0.08 per diluted share, on operating revenues of $99,708,000.

For the twelve months ended December 31, 2002, net earnings were $46,587,000, or $2.28 per diluted share, on operating revenues of $403,158,000. Twelve-month results included an after-tax gain of $12,817,000, or $0.61 per diluted share, resulting from the merger of Chiles Offshore Inc. ("Chiles") and Ensco International Incorporated (the "Chiles Merger") and an extraordinary loss due to debt extinguishment of $1,520,000, or $0.07 per diluted share (the "2002 Extraordinary Loss").

In the quarter ended December 31, 2001, SEACOR earned $18,679,000, or $0.93 per diluted share, on operating revenues of $109,804,000. For the twelve months ended December 31, 2001, net earnings were $70,701,000, or $3.43 per diluted share, on operating revenues of $434,790,000. Twelve-month results included an extraordinary loss due to debt extinguishment of $896,000, or $0.04 per diluted share.

Net earnings in the quarter ended September 30, 2002 were $21,295,000, or $1.02 per diluted share, on operating revenues of $102,137,000. Results for the quarter included the effect of the Chiles Merger and 2002 Extraordinary Loss.

The financial results for the quarter as compared to the prior quarter were impacted by a variety of factors highlighted below and described in greater detail in subsequent paragraphs and tables in this release:

-- Changes in fleet size and composition: Due to net vessel dispositions, particularly those in the international fleet, there were 202 fewer available revenue earning boat days during the quarter. This impacted revenues by approximately $2.2 million.

-- Declines in fleet utilization: Lower utilization, particularly for North Sea anchor handling towing supply vessels and utility boats in the Gulf of Mexico, accounted for approximately $1.6 million less revenue. Utilization and day rate tables are included in this press release.

-- Decrease in arrangement fees: In the prior quarter, the Company earned a $0.8 million arrangement fee for services performed in obtaining certain financing for Chiles. There were no similar fees during the current quarter.

-- Increased marine operating expenses: Higher running costs, primarily engine and hull repairs, offset by lower statutory drydock expense, exceeded the prior quarter by $2.5 million.

-- Increased overhead expense: General and administrative expenses exceeded the previous quarter by $1.2 million, largely due to the cost of providing employee severance benefits.

-- Increased net interest expense: The "negative spread" associated with carrying additional cash raised by the sale of 10 year notes with a 5 7/8% coupon was approximately $2.3 million.

-- Inland river business: The Company took delivery of 34 new inland river hopper barges in the current quarter. Operating revenue and operating income increased $1.9 million and $0.7 million, respectively.

-- Environmental services: Reduced retainer revenue and less spill response activity contributed to a $0.3 million decline in operating income.

Overall operating revenues decreased $2,429,000 from the third quarter. Results of the offshore marine business segment declined approximately $2,800,000. The effect of net vessel dispositions, as previously detailed, was the biggest factor impacting operating revenues. Utilization of the offshore marine fleet was 76.8% in the fourth quarter as compared to 77.7% in the prior quarter. Utilization declined throughout the last three months of the year. Forty-seven vessels, primarily U.S.-operated utility and crew, were out of service due to market conditions at the end of the year.

During the current quarter, the Company took delivery of 4 new mini-supply and 1 new towing supply vessel, and 2 additional vessels were bareboat chartered-in. Six vessels were sold, one of which was leased-back. Due to the timing of the vessel additions and sales, as noted above, there were 202 fewer "available vessel days." The impact on revenue was even greater as the equipment sold were international towing supply/anchor handling towing supply vessels.

Operating income declined $6,282,000 from the third quarter of 2002 due to the combination of lower operating revenues and higher operating and general and administrative expenses as detailed above.

Net interest expense rose $1,482,000 between quarters due to an increase in outstanding indebtedness. On September 27, 2002, the Company completed the sale of $200,000,000 aggregate principal amount of 5 7/8% Senior Notes due October 1, 2012 (the "5 7/8% Senior Notes").

Income from equipment sales increased $756,000 from the third quarter of 2002. The sale of six vessels in the quarter contributed $2,088,000 to income. The Company also recognized income from a sale completed in a prior quarter to a joint venture whose recognition was deferred based on the Company having financed the sale. That sale was re-financed with a lending institution. The previous quarter's results included a write-down of the carrying value of equipment associated with a cancelled offshore vessel construction contract.

Derivative losses during the fourth quarter were approximately $2,424,000, $827,000 less than in the prior quarter. These losses were incurred in connection with a transaction that hedged the Company's share ownership position in Ensco International Incorporated, which position was obtained as a result of the Chiles Merger. In the prior quarter, the Company had derivative losses associated with interest rate swap agreements entered into in anticipation of the placement of its 5 7/8% Senior Notes.

Other income decreased approximately $4,100,000. The decrease included $2,860,000 less gains from the sale of marketable securities than in the third quarter. Foreign currency accounting gains were also lower between periods.

Equity interest in the earnings of 50% or less owned companies decreased $1,073,000 between quarters. Offshore marine joint venture earnings were lower due primarily to lower profits of the Company's Mexican operations. Prior quarter results included a write-down in the carrying value of the Company's investment in Strategic Software Ltd. The Company's fourth quarter equity interest in the net losses of Globe Wireless, L.L.C., a marine telecommunications investment, was $370,000, or $0.02 per diluted share.

The Company, which had previously acquired a 20% interest in Tex-Air Helicopters, Inc. ("Tex-Air"), acquired the balance of Tex-Air's equity on December 31, 2002. A total of approximately $3,000,000 of consideration was paid for Tex-Air, including approximately $2,800,000 in the form of SEACOR common stock. Tex-Air operates a fleet of 36 helicopters serving the offshore oil and gas industry in the U.S. Gulf of Mexico.

At December 31, 2002, cash and cash equivalents, marketable securities and construction reserve funds totaled $525,931,000.

In February 2003, cash proceeds from the sale of two North Sea anchor handling towing supply vessels totaled $51,500,000. Also in February, the Company redeemed $35,317,000 of its 5 3/8% Convertible Subordinated Notes due 2006 for $35,949,000. The redemption, which involved the payment of a small premium to principal amount, retired the issue. The write-off of related unamortized deferred financing cost and the recognition of premium expense will result in an after-tax charge of $731,000, or $0.03 per diluted share. Following the completion of these two transactions, the Company's cash and cash equivalents, marketable securities and construction reserve funds totaled approximately $544,000,000.

As of December 31, 2002, the Company had on order 4 platform supply vessels under construction in the Gulf of Mexico. One of these vessels is committed for sale. Delivery of these vessels commences in May 2003 and is spread over the next 11 months. The Company has on order 6 crew boats that will be delivered over the next 7 months. The Company also has contracts to acquire or bareboat 2 towing supply vessels under construction in Asia. The inland river division of the Company has contracts to acquire 61 barges. The aggregate cost of the Company's firm commitments for new construction is $108,300,000, of which $25,000,000 had been expended as of the end of 2002.

SEACOR and its subsidiaries are primarily engaged in the operation of a diversified fleet of offshore support vessels that service oil and gas exploration and development activities in the U.S. Gulf of Mexico, the North Sea, West Africa, Asia, Latin America and other international regions. Other business activities include environmental services, inland river operations, and helicopter transportation services to the oil and gas industry mainly in the U.S. Gulf of Mexico.

This release includes "forward-looking statements" as described in the Private Securities Litigation Reform Act of 1995. Statements herein that describe the Company's business strategy, industry outlook, objectives, plans, intentions or goals also are forward-looking statements. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those in forward-looking statements, including risks associated with the level of oil and natural gas exploration, the availability of competitive vessels, and the level of oil and natural gas prices. Forward-looking statements included in this release speak only as of the date of this release and SEACOR disclaims 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 Randall Blank, Executive Vice President and Chief Financial Officer, at (281) 899-4800 or (212) 307-6633 or visit SEACOR's website at www.seacorsmit.com.

                   SEACOR SMIT Inc. and Subsidiaries
            Condensed Consolidated Statements of Operations
             (in thousands, except share data, unaudited)

                        Three Months Ended       Twelve Months Ended
                           December 31,             December 31,
                      -----------------------  -----------------------
                          2002        2001         2002        2001
                      ----------- -----------  ----------- -----------
Operating Revenues   $    99,708 $   109,804  $   403,158 $   434,790
                      ----------- -----------  ----------- -----------
Costs and Expenses:
   Operating expenses     67,306      58,348      249,892     234,551
   Administrative and
    general               14,668      13,186       53,265      49,980
   Depreciation and
    amortization          13,991      16,058       56,244      58,324
                      ----------- -----------  ----------- -----------
                          95,965      87,592      359,401     342,855
                      ----------- -----------  ----------- -----------
Operating Income           3,743      22,212       43,757      91,935
                      ----------- -----------  ----------- -----------
Other Income
 (Expense):
   Interest on debt       (5,764)     (5,205)     (17,064)    (21,998)
   Interest income         2,821       2,636        8,833      13,546
   Income from
    equipment sales
    or retirements,
    net                    3,077       1,038        8,635       9,030
   Gain from Chiles
    Merger                     -           -       19,719           -
   Derivative income
    (loss), net           (2,424)      2,165       (5,043)      4,127
   Other, net              1,486       4,411        9,643       7,081
                      ----------- -----------  ----------- -----------
                            (804)      5,045       24,723      11,786
                      ----------- -----------  ----------- -----------
Income Before Income
 Taxes, Minority
 Interest, Equity in
 Earnings of 50% or
 Less Owned Companies
 and Extraordinary
 Item                      2,939      27,257       68,480     103,721
Income Tax Expense         1,266       9,172       23,852      36,058
                      ----------- -----------  ----------- -----------
Income Before
 Minority Interest,
 Equity in Earnings
 of 50% or Less Owned
 Companies and
 Extraordinary Item        1,673      18,085       44,628      67,663
Minority Interest in
 Income of
 Subsidiaries                (32)       (116)        (226)       (372)
Equity in Earnings of
 50% or Less Owned
 Companies, net               (3)        710        3,705       4,306
                      ----------- -----------  ----------- -----------
Income Before
 Extraordinary Item        1,638      18,679       48,107      71,597
Extraordinary Item -
 Loss on Debt
 Extinguishment, net
 of tax                        -           -       (1,520)       (896)
                      ----------- -----------  ----------- -----------
Net Income           $     1,638 $    18,679  $    46,587 $    70,701
                      =========== ===========  =========== ===========
Basic Earnings Per
 Common Share:
   Income before
    extraordinary
    item             $      0.08 $      0.93  $      2.41 $      3.68
   Extraordinary item          -           -        (0.08)      (0.05)
                      ----------- -----------  ----------- -----------
       Net income    $      0.08 $      0.93  $      2.33 $      3.63
                      =========== ===========  =========== ===========
Diluted Earnings Per
 Common Share(1):
   Income before
    extraordinary
    item             $      0.08 $      0.93  $      2.35 $      3.47
   Extraordinary item          -           -        (0.07)      (0.04)
                      ----------- -----------  ----------- -----------
       Net income    $      0.08 $      0.93  $      2.28 $      3.43
                      =========== ===========  =========== ===========
Weighted Average
 Common Shares:
   Basic(2)           19,823,095  19,995,193   19,997,625  19,490,115
   Diluted            20,032,229  21,284,236   21,057,877  21,335,182
EBITDA(3)            $    17,738 $    40,014  $   102,951 $   156,034

(1) The assumed conversion of the Company's convertible notes into
    shares of common stock has been excluded from the computation of
    diluted earnings per share in the three month period ended
    December 31, 2002 as the effect was antidilutive. In this same
    period, such shares were also excluded from the calculation of
    diluted weighted average common shares outstanding. Diluted
    earnings per common share for the three month period ended
    December 31, 2001 were equivalent to basic earnings due to a
    benefit of $789,000, or $0.04 per diluted share, related to the
    Company's participation in an equity forward contract associated
    with its redemption of $10 million of its 5 3/8% Convertible
    Subordinated Notes in the second quarter.

(2) Total common shares outstanding were 19,921,092 and 20,083,670 on
    December 31, 2002 and 2001, respectively.

(3) As used herein, "EBITDA" is operating income plus depreciation and
    amortization, minority interest in (income) loss of subsidiaries
    and equity in net earnings of 50% or less owned companies, before
    applicable income taxes. EBITDA should not be considered by an
    investor as an alternative to net income as an indicator of the
    Company's operating performance or as an alternative to cash flows
    as a better measure of liquidity.
                   SEACOR SMIT Inc. and Subsidiaries
                            Segment Results
                       (in thousands, unaudited)

                           Three Months Ended     Twelve Months Ended
                              December 31,            December 31,
                          ---------------------   --------------------
                            2002        2001        2002       2001
                          ---------   ---------   ---------  ---------
Operating Revenues:
  Offshore Marine        $  89,382   $ 100,364   $ 367,969  $ 399,123
  Other(1)                  10,393       9,587      35,456     36,445
  Intersegment                 (67)       (147)       (267)      (778)
                          ---------   ---------   ---------  ---------
     Total               $  99,708   $ 109,804   $ 403,158  $ 434,790
                          =========   =========   =========  =========
Operating Margin(2):
  Offshore Marine        $  27,127   $  46,363   $ 134,483  $ 182,270
  Other(1)                   5,275       5,093      18,783     17,969
                          ---------   ---------   ---------  ---------
     Total               $  32,402   $  51,456   $ 153,266  $ 200,239
                          =========   =========   =========  =========

(1) Other includes the Company's environmental and inland river
    businesses.

(2) Operating margin is defined as operating revenues less direct
    vessel operating expenses. Administrative and general and
    depreciation and amortization expenses are excluded.
             Offshore Marine Fleet - Operating Statistics

                               Three Months Ended  Twelve Months Ended
                                  December 31,        December 31,
                              -------------------  -------------------
                                 2002      2001      2002      2001
                              --------- ---------  --------- ---------
Rates per Day Worked -
 Worldwide ($):
  Supply and Towing Supply       7,834     8,073     7,985     7,771
  Anchor Handling Towing
   Supply                       14,109    12,601    13,067    13,548
  Crew                           3,148     3,415     3,216     3,313
  Standby Safety                 6,288     5,656     5,935     5,448
  Utility and Line Handling      1,762     1,916     1,755     1,895
  Mini-Supply                    2,983     3,025     2,854     3,071
  Geophysical, Freight and
   Other(1)                          -     5,380         -     5,406
Overall Utilization -
  Worldwide (%)(2):
  Supply and Towing Supply        85.7      87.3      88.1      88.8
  Anchor Handling Towing
   Supply                         73.1      90.1      78.2      84.6
  Crew                            78.3      85.9      80.3      93.4
  Standby Safety                  88.5      85.3      87.4      87.3
  Utility and Line Handling       58.0      55.4      60.6      56.1
  Mini-Supply                     86.2      86.0      86.9      91.7
  Geophysical, Freight and
   Other(1)                          -      43.5         -      51.8
     Overall Fleet                76.8      78.5      78.5      81.1
Fleet Composition at Period
 End(2):
  Supply and Towing Supply                              71        79
  Anchor Handling Towing Supply                         28        31
  Crew                                                  96        91
  Standby Safety                                        26        30
  Utility and Line Handling                             45        65
  Mini-Supply                                           33        26
  Geophysical, Freight and
   Other(1)                                              2         3
                                                  ---------- ---------
     Total Offshore Marine Fleet                       301       325
                                                  ========== =========

(1) In 2002, the Company directly owned one of the vessels in this
    class and it did not operate in these periods.

(2) Statistics exclude vessels retired from service in the applicable
    periods.
                   SEACOR SMIT Inc. and Subsidiaries
             Supplementary Financial and Operational Data
     (in thousands, except share and operational data, unaudited)

                                           Quarter Ended
                              ----------------------------------------
                                 Dec. 31,      Sept. 30,     June 30,
                                   2002          2002          2002
                              ------------  ------------  ------------
Operating Revenues           $     99,708  $    102,137  $     97,670
Operating Expenses                 67,306        64,297        61,133
Administrative and General         14,668        13,434        12,803
Depreciation and Amortization      13,991        14,381        13,996
                              ------------  ------------  ------------
Operating Income                    3,743        10,025         9,738
Net Interest Expense               (2,943)       (1,460)       (1,694)
Income from Equipment Sales,
 net                                3,077         2,321           938
Gain from Chiles Merger                 -        19,719             -
Derivative Income (Loss), net      (2,424)       (3,251)        1,404
Other, net                          1,486         5,584         6,898
                              ------------  ------------  ------------
Income Before Income Taxes,
 Minority Interest and Equity
 Earnings                           2,939        32,938        17,284
Income Tax Expense                  1,266        11,187         6,156
                              ------------  ------------  ------------
Income Before Minority
 Interest and Equity Earnings       1,673        21,751        11,128
Minority Interest                     (32)           (6)          (95)
Equity Earnings                        (3)        1,070         1,215
                              ------------  ------------  ------------
Income Before Extraordinary
 Item                               1,638        22,815        12,248
Extraordinary Item                      -        (1,520)            -
                              ------------  ------------  ------------
Net Income                   $      1,638  $     21,295  $     12,248
                              ============  ============  ============

Weighted Average Common
 Shares(1):
   Basic                       19,823,095    20,051,743    20,078,231
   Diluted                     20,032,229    21,186,390    21,393,472
Diluted Earnings Per Common
 Share Before Extraordinary
 Item(1)                     $       0.08  $       1.09  $       0.59
EBITDA                       $     17,738  $     25,165  $     24,459
Balance Sheet:
   Cash and Construction
    Reserve Funds            $    437,307  $    475,829  $    237,060
   Marketable Securities           88,624        61,121        23,261
   Total Assets                 1,487,107     1,467,396     1,293,455
   Total Long-term Debt           402,118       401,347       257,383
   Stockholders' Equity           804,951       804,227       784,127
Rates Per Day Worked -
 Worldwide ($):
   Supply and Towing Supply         7,834         8,153         7,964
   Anchor Handling Towing
    Supply                         14,109        13,144        12,103
   Crew                             3,148         3,200         3,224
   Standby Safety                   6,288         6,268         5,726
   Utility                          1,762         1,761         1,744
   Mini-Supply                      2,983         2,918         2,749
   Geophysical, Freight and
    Other(2)                            -             -             -
Overall Utilization -
 Worldwide (%)(3):
   Supply and Towing Supply          85.7          88.9          89.0
   Anchor Handling Towing
    Supply                           73.1          72.9          79.1
   Crew                              78.3          76.3          81.8
   Standby Safety                    88.5          88.2          84.8
   Utility                           58.0          62.4          62.3
   Mini-Supply                       86.2          90.0          85.9
   Geophysical, Freight and
    Other(2)                            -             -             -
       Overall Offshore Marine
        Fleet                        76.8          77.7          79.1
Fleet Composition at Period
 End(3):
   Supply and Towing Supply            71            69            74
   Anchor Handling Towing
    Supply                             28            30            32
   Crew                                96            95            95
   Standby Safety                      26            28            28
   Utility                             45            48            48
   Mini-Supply                         33            28            26
   Geophysical, Freight and
    Other(2)                            2             2             3
                              ------------  ------------  ------------
       Total Offshore Marine
        Fleet                         301           300           306
                              ============  ============  ============


                                                  Quarter Ended
                                           ---------------------------
                                               Mar. 31,      Dec. 31,
                                                 2002          2001
                                            ------------  ------------
Operating Revenues                         $    103,643  $    109,804
Operating Expenses                               57,156        58,348
Administrative and General                       12,360        13,186
Depreciation and Amortization                    13,876        16,058
                                            ------------  ------------
Operating Income                                 20,251        22,212
Net Interest Expense                             (2,134)       (2,569)
Income from Equipment Sales, net                  2,299         1,038
Gain from Chiles Merger                               -             -
Derivative Income (Loss), net                      (772)        2,165
Other, net                                       (4,325)        4,411
                                            ------------  ------------
Income Before Income Taxes, Minority
 Interest and Equity Earnings                    15,319        27,257
Income Tax Expense                                5,243         9,172
                                            ------------  ------------
Income Before Minority Interest and Equity
 Earnings                                        10,076        18,085
Minority Interest                                   (93)         (116)
Equity Earnings                                   1,423           710
                                            ------------  ------------
Income Before Extraordinary Item                 11,406        18,679
Extraordinary Item                                    -             -
                                            ------------  ------------
Net Income                                 $     11,406  $     18,679
                                            ============  ============

Weighted Average Common Shares(1):
   Basic                                     20,039,130    19,995,193
   Diluted                                   21,350,345    21,284,236
Diluted Earnings Per Common Share Before
 Extraordinary Item(1)                     $       0.55  $       0.93
EBITDA                                     $     35,589  $     40,014
Balance Sheet:
   Cash and Construction Reserve Funds     $    242,055  $    235,684
   Marketable Securities                         22,250        22,371
   Total Assets                               1,283,952     1,298,138
   Total Long-term Debt                         256,572       256,741
   Stockholders' Equity                         765,979       743,698
Rates Per Day Worked - Worldwide ($):
   Supply and Towing Supply                       7,986         8,073
   Anchor Handling Towing Supply                 13,108        12,601
   Crew                                           3,293         3,415
   Standby Safety                                 5,404         5,656
   Utility                                        1,753         1,916
   Mini-Supply                                    2,737         3,025
   Geophysical, Freight and Other(2)                  -         5,380
Overall Utilization - Worldwide (%)(3):
   Supply and Towing Supply                        88.8          87.3
   Anchor Handling Towing Supply                   87.2          90.1
   Crew                                            85.4          85.9
   Standby Safety                                  88.0          85.3
   Utility                                         59.6          55.4
   Mini-Supply                                     85.4          86.0
   Geophysical, Freight and Other(2)                  -          43.5
       Overall Offshore Marine Fleet               80.6          78.5
Fleet Composition at Period End(3):
   Supply and Towing Supply                          77            79
   Anchor Handling Towing Supply                     34            31
   Crew                                              95            91
   Standby Safety                                    31            30
   Utility                                           49            65
   Mini-Supply                                       26            26
   Geophysical, Freight and Other(2)                  3             3
                                            ------------  ------------
       Total Offshore Marine Fleet                  315           325
                                            ============  ============

(1) The assumed conversion of the Company's convertible notes into
    shares of common stock has been excluded from the computation of
    diluted earnings per share in the three month period ended
    December 31, 2002 as the effect was antidilutive. In this same
    period, such shares were also excluded from the calculation of
    diluted weighted average common shares outstanding.

(2) In 2002, the Company directly owned one of the vessels in this
    class and it did not operate in these periods.

(3) Statistics exclude vessels retired from service in the applicable
    periods.

 

Contacts

SEACOR SMIT Inc.
Randall Blank, 281/899-4800 or 212/307-6633