State of Incorporation: Delaware | I.R.S. Employer I.D.: 65-0966399 |
FORM 10-Q
March 31, | December 31, | June 30, | December 31, | |||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Assets | ||||||||||||||||
Current assets: | ||||||||||||||||
Cash and cash equivalents | $ | 31,310 | $ | 18,949 | $ | 27,442 | $ | 18,949 | ||||||||
Restricted cash | 30,350 | 35,681 | 32,258 | 35,681 | ||||||||||||
Trade accounts receivable, net of allowance for doubtful accounts of $5,881 and $5,649 in 2005 and 2004, respectively | 51,848 | 55,209 | ||||||||||||||
Trade accounts receivable, net of allowance for doubtful accounts of $6,854 and $5,649 in 2005 and 2004, respectively | 51,437 | 55,209 | ||||||||||||||
Other receivables | 4,121 | 3,784 | 3,774 | 3,784 | ||||||||||||
Marine operating supplies | 8,081 | 7,868 | 7,668 | 7,868 | ||||||||||||
Prepaid expenses and other | 4,163 | 3,627 | 3,929 | 3,627 | ||||||||||||
Total current assets | 129,873 | 125,118 | 126,508 | 125,118 | ||||||||||||
Vessels and equipment, net | 596,626 | 598,793 | 590,943 | 598,793 | ||||||||||||
Deferred costs, net | 41,976 | 45,053 | 40,493 | 45,053 | ||||||||||||
Other | 21,173 | 17,824 | 26,318 | 17,824 | ||||||||||||
Total assets | $ | 789,648 | $ | 786,788 | $ | 784,262 | $ | 786,788 | ||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Accounts payable | $ | 10,126 | $ | 14,918 | $ | 9,858 | $ | 14,918 | ||||||||
Current maturities of long-term debt | 16,429 | 16,653 | 15,661 | 16,653 | ||||||||||||
Current obligations under capital leases | 3,531 | 3,708 | 3,354 | 3,708 | ||||||||||||
Accrued interest | 6,265 | 4,875 | 5,633 | 4,875 | ||||||||||||
Accrued liabilities and other | 35,333 | 35,321 | 33,962 | 35,321 | ||||||||||||
Total current liabilities | 71,684 | 75,475 | 68,468 | 75,475 | ||||||||||||
Long-term debt | 323,714 | 325,965 | 309,353 | 325,965 | ||||||||||||
Senior notes | 148,006 | 152,906 | 154,219 | 152,906 | ||||||||||||
Obligations under capital leases | 27,841 | 28,568 | 27,097 | 28,568 | ||||||||||||
Other liabilities | 7,663 | 4,879 | 6,150 | 4,879 | ||||||||||||
Total liabilities | 578,908 | 587,793 | 565,287 | 587,793 | ||||||||||||
Commitments and contingencies | ||||||||||||||||
Stockholders’ equity: | ||||||||||||||||
Preferred stock, no par value-authorized 5,000; issued and outstanding, none | — | — | — | — | ||||||||||||
Common stock–$.01 par value, authorized 40,000 shares; 23,620 and 23,446 shares issued and outstanding in 2005 and 2004, respectively | 236 | 234 | ||||||||||||||
Common stock-$.01 par value, authorized 40,000 shares; 23,436 and 23,446 shares issued and outstanding in 2005 and 2004, respectively | 234 | 234 | ||||||||||||||
Additional paid-in capital | 261,746 | 259,843 | 261,799 | 259,843 | ||||||||||||
Accumulated other comprehensive income | 31 | 55 | — | 55 | ||||||||||||
Unearned compensation | (2,074 | ) | (758 | ) | (1,880 | ) | (758 | ) | ||||||||
Accumulated deficit | (49,199 | ) | (60,379 | ) | (41,178 | ) | (60,379 | ) | ||||||||
Total stockholders’ equity | 210,740 | 198,995 | 218,975 | 198,995 | ||||||||||||
Total liabilities and stockholders’ equity | $ | 789,648 | $ | 786,788 | $ | 784,262 | $ | 786,788 | ||||||||
1
Three Months Ended | Three Months Ended | Six Months Ended | ||||||||||||||||||||||
March 31, | June 30, | June 30, | ||||||||||||||||||||||
2005 | 2004 | 2005 | 2004 | 2005 | 2004 | |||||||||||||||||||
Revenue | $ | 95,581 | $ | 82,534 | $ | 96,687 | $ | 87,203 | $ | 192,268 | $ | 169,737 | ||||||||||||
Vessel and voyage expenses: | ||||||||||||||||||||||||
Crew payroll and benefits | 22,600 | 22,581 | 23,072 | 21,697 | 45,672 | 44,278 | ||||||||||||||||||
Charter hire | 4,892 | 3,587 | 4,375 | 3,944 | 9,267 | 7,531 | ||||||||||||||||||
Repairs and maintenance | 4,645 | 6,198 | 5,760 | 7,974 | 10,405 | 14,172 | ||||||||||||||||||
Insurance | 3,181 | 2,620 | 3,324 | 3,704 | 6,505 | 6,324 | ||||||||||||||||||
Fuel and consumables | 7,283 | 7,015 | 7,073 | 7,795 | 14,356 | 14,810 | ||||||||||||||||||
Port charges and other | 5,326 | 4,906 | 6,222 | 5,080 | 11,548 | 9,986 | ||||||||||||||||||
47,927 | 46,907 | 49,826 | 50,194 | 97,753 | 97,101 | |||||||||||||||||||
General and administrative | 9,568 | 9,425 | 12,041 | 9,323 | 21,609 | 18,748 | ||||||||||||||||||
Depreciation, amortization and drydocking | 16,520 | 15,790 | 16,577 | 17,127 | 33,097 | 32,917 | ||||||||||||||||||
Loss on disposal of assets, net | 130 | 12 | ||||||||||||||||||||||
Gain on disposal of assets, net | (453 | ) | (1,989 | ) | (323 | ) | (1,977 | ) | ||||||||||||||||
Income from operations | 21,436 | 10,400 | 18,696 | 12,548 | 40,132 | 22,948 | ||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||
Interest expense | (9,426 | ) | (8,069 | ) | (9,259 | ) | (8,375 | ) | (18,685 | ) | (16,444 | ) | ||||||||||||
Interest income | 146 | 66 | 167 | 52 | 313 | 118 | ||||||||||||||||||
Minority interest in losses of subsidiaries | — | 78 | ||||||||||||||||||||||
Minority interest in (gains) losses of subsidiaries | — | (20 | ) | — | 58 | |||||||||||||||||||
Other, net | (8 | ) | 4,524 | 41 | 52 | 33 | 4,576 | |||||||||||||||||
Total income (expense), net | (9,288 | ) | (3,401 | ) | ||||||||||||||||||||
Total other expense, net | (9,051 | ) | (8,291 | ) | (18,339 | ) | (11,692 | ) | ||||||||||||||||
Income before provision for income taxes | 12,148 | 6,999 | 9,645 | 4,257 | 21,793 | 11,256 | ||||||||||||||||||
Provision for income taxes | 968 | 1,349 | 1,624 | 1,536 | 2,592 | 2,885 | ||||||||||||||||||
Net income | $ | 11,180 | $ | 5,650 | $ | 8,021 | $ | 2,721 | $ | 19,201 | $ | 8,371 | ||||||||||||
Net income per common share: | ||||||||||||||||||||||||
Net income per common share — basic | $ | 0.48 | $ | 0.24 | $ | 0.34 | $ | 0.12 | $ | 0.82 | $ | 0.36 | ||||||||||||
Net income per common share — diluted | $ | 0.46 | $ | 0.24 | $ | 0.33 | $ | 0.12 | $ | 0.79 | $ | 0.35 | ||||||||||||
Weighted average common shares outstanding — basic | 23,327 | 23,249 | 23,366 | 23,261 | 23,347 | 23,255 | ||||||||||||||||||
Weighted average common shares outstanding — diluted | 24,273 | 23,795 | 24,527 | 23,598 | 24,400 | 23,696 | ||||||||||||||||||
2
Three Months Ended | ||||||||||||||||
March 31, | ||||||||||||||||
2005 | 2004 | Six Months Ended | ||||||||||||||
(as restated, | June 30, | |||||||||||||||
see Note 1) | 2005 | 2004 | ||||||||||||||
Operating activities: | ||||||||||||||||
Net income | $ | 11,180 | $ | 5,650 | $ | 19,201 | $ | 8,371 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization of vessels and equipment | 9,903 | 9,900 | ||||||||||||||
Depreciation of vessels and equipment | 19,928 | 20,222 | ||||||||||||||
Expenditures for drydocking | (3,943 | ) | (4,628 | ) | (9,457 | ) | (10,473 | ) | ||||||||
Amortization of drydocking costs | 6,617 | 5,890 | 13,169 | 12,695 | ||||||||||||
Amortization of discount on long-term debt and financing costs | 418 | 412 | 825 | 857 | ||||||||||||
Amortization of unearned compensation | 194 | — | 388 | — | ||||||||||||
Provision for bad debts | 432 | 1,643 | 1,405 | 1,631 | ||||||||||||
Loss on disposal of assets | 130 | 12 | ||||||||||||||
Gain on disposal of assets, net | (323 | ) | (1,977 | ) | ||||||||||||
Minority interest in losses of subsidiaries | — | (78 | ) | — | (58 | ) | ||||||||||
Other | — | 51 | — | 119 | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
Trade accounts and other receivables | 2,592 | 1,360 | 2,377 | 575 | ||||||||||||
Other current and long-term assets | (9,157 | ) | (5,465 | ) | (7,546 | ) | (4,172 | ) | ||||||||
Accounts payable and other liabilities | (623 | ) | (3,264 | ) | (4,387 | ) | (6,695 | ) | ||||||||
Net cash provided by operating activities | 17,743 | 11,483 | 35,580 | 21,095 | ||||||||||||
Investing activities: | ||||||||||||||||
Proceeds from disposals of assets | 2,250 | 601 | 5,128 | 3,145 | ||||||||||||
Purchases of vessels and equipment | (9,973 | ) | (71,040 | ) | (16,641 | ) | (83,533 | ) | ||||||||
Investment in Joint Venture | — | (240 | ) | |||||||||||||
Net cash used in investing activities | (7,723 | ) | (70,439 | ) | (11,513 | ) | (80,628 | ) | ||||||||
Financing activities: | ||||||||||||||||
Proceeds from Amended Credit Facility | — | 20,000 | — | 20,000 | ||||||||||||
Payments on Amended Credit Facility | (5,500 | ) | — | (15,500 | ) | — | ||||||||||
Proceeds from long-term debt | 5,799 | 49,600 | 8,130 | 49,600 | ||||||||||||
Payments of long-term debt | (2,324 | ) | (843 | ) | (4,654 | ) | (3,166 | ) | ||||||||
Payments of Title XI bonds | (450 | ) | (450 | ) | (5,580 | ) | (3,535 | ) | ||||||||
Payments of obligations under capital leases | (904 | ) | (865 | ) | (1,825 | ) | (1,725 | ) | ||||||||
Payments of deferred financing costs related to 2003 Senior Notes and Amended Credit Facility | — | (95 | ) | — | (285 | ) | ||||||||||
Payments of other deferred financing costs | (6 | ) | (506 | ) | (14 | ) | (683 | ) | ||||||||
Proceeds from exercise of stock options | 395 | 167 | 446 | 167 | ||||||||||||
Decrease (increase) in restricted cash | 5,331 | (3,617 | ) | |||||||||||||
Decrease in restricted cash | 3,423 | 2,043 | ||||||||||||||
Net cash provided by financing activities | 2,341 | 63,391 | ||||||||||||||
Net cash (used in) provided by financing activities | (15,574 | ) | 62,416 | |||||||||||||
Change in cash and cash equivalents | 12,361 | 4,435 | 8,493 | 2,883 | ||||||||||||
Cash and cash equivalents at beginning of period | 18,949 | 7,399 | 18,949 | 7,399 | ||||||||||||
Cash and cash equivalents at end of period | $ | 31,310 | $ | 11,834 | $ | 27,442 | $ | 10,282 | ||||||||
Supplemental schedule of non-cash investing and financing activities: | ||||||||||||||||
Obligation for fair market value of interest rate swap | $ | 1,994 | $ | 4,891 | $ | 1,313 | $ | (3,478 | ) | |||||||
3
Certain financial statement reclassifications have been made to conform prior period data to the 2005 financial statement presentation.
The Company recently reviewed its financial statement presentation and disclosure in response to comments received from the staff of the Securities and Exchange Commission (the “SEC”) in a normal periodic review of the Company’s filings. As a result, the Company is restating the accompanying 2004 condensed consolidated statement of cash flows to classify expenditures for drydocking of $4.6 million as an operating activity rather than an investing activity.
foreign currency forward contract was expired.
4
At The merger was approved by the stockholders of the Company and SEACOR, and customary conditions, including regulatory approvals, were satisfied. The effective time and as a resultcompletion date of the Merger was July 1, 2005. At such time, Seabulk stockholders will bewere entitled to receive in exchange for each issued and outstanding share of Seabulk common stock (i) $4.00 in cash and (ii) 0.2694 shares of SEACOR common stock. In certain circumstances,Based on SEACOR’s closing price of $64.30 on June 30, 2005, the portionCompany’s stockholders received approximately $21.32 in SEACOR stock and cash for each share of the merger consideration payable in cash may be reducedCompany’s stock. The Company’s stock ceased trading at the close of business on June 30, 2005 and sharesthe Company began operating as a wholly owned subsidiary of SEACOR common stock, having a value on the closing date equal to the cash reduction, may be substituted therefor. The closing prices of SEACOR and Seabulk shares on Wednesday, March 16, 2005, were $65.28 and $16.73, respectively.beginning July 1, 2005. All outstanding Seabulk stock options will beare being assumed by SEACOR. Each such option for Seabulk common stock will then becomeis exercisable for SEACOR common stock under the exchange ratio, plus the cash component.
4
Seabulk and SEACOR have made customary representations, warranties and covenants in the Merger Agreement. The completion of the Merger is subject to approval by the stockholders of each of Seabulk and SEACOR and the satisfaction of customary conditions, including regulatory approvals. As part of the transaction, entities associated with DLJ Merchant Banking Partners III, L.P. and Carlyle/Riverstone Global Energy and Power Fund I, L.P., who collectively own approximately 75% of Seabulk’s common shares, have entered into an agreement to support the transaction.
The Merger Agreement contains certain termination rights for both SEACOR and Seabulk and further provides that, upon termination of the Merger Agreement under specified circumstances, Seabulk may be required to pay SEACOR a termination fee of up to $21.3 million and SEACOR may be required to pay Seabulk a termination fee of up to $5 million.
On April 22, 2005, the Company announced the early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, thereby satisfying one of the key conditions to the completion of the merger.
In January
In January 2005, the Company took delivery of and began to operate theSeabulk Carmen, a supply boat, in the U.S. Gulf of Mexico.vessels. The transaction to acquire one of theSeabulk Carmen offshore vessels was a like-kind exchange of assets of equal value and was a tax-free transaction to the Company, in which the Company delivered three older crew boats and one older geophysical vesselfour offshore vessels in exchange for one offshore vessel.
In three months ended March 31, 2005, the Company sold theSeabulk Veritas, antwo offshore support vessel operating in the U.S. Gulf of Mexico. Proceeds from the sale of the vessel were $200,000. The gain on the sale of the vessel was approximately $45,000.
In March 2005, the Company sold theSeabulk Neptune, an anchor handling tug operating in West Africa. Proceeds from the sale of the vessel were approximately $200,000. The loss on the sale of the vessel was approximately $148,000.
In March 2005, the Company delivered theSeabulk Winn,vessels and exchanged a crew boat operating in the U.S. Gulf of Mexico,third and $550,000 in exchange for theC/Crusader, a supply boat,another offshore vessel and the assignment of a purchase and sale agreement. The Company subsequently sold theC/Crusader offshore vessel under the terms of the assigned purchase and sale agreement for proceeds of approximately $1.9 million.agreement. The transaction was a like-kind exchange of assets of equal value and was a tax free-transaction to the Company.
5
Three Months Ended | ||||||||||||||||||||||||
March 31, | Three Months Ended | Six Months Ended | ||||||||||||||||||||||
2005 | 2004 | June 30, | June 30, | |||||||||||||||||||||
(in thousands, except | 2005 | 2004 | 2005 | 2004 | ||||||||||||||||||||
per share data) | (in thousands, except for per share data) | |||||||||||||||||||||||
Numerator for basic and diluted net income per share: | ||||||||||||||||||||||||
Net income available to common shareholders | $ | 11,180 | $ | 5,650 | $ | 8,021 | $ | 2,721 | $ | 19,201 | $ | 8,371 | ||||||||||||
Denominator for basic net income per share-weighted average shares | 23,327 | 23,249 | 23,366 | 23,261 | 23,347 | 23,255 | ||||||||||||||||||
Effects of dilutive securities: | ||||||||||||||||||||||||
Stock options | 691 | 337 | 845 | 139 | 768 | 238 | ||||||||||||||||||
Warrants | 157 | 159 | 155 | 159 | 156 | 159 | ||||||||||||||||||
Restricted shares | 98 | 50 | 161 | 39 | 129 | 44 | ||||||||||||||||||
Dilutive potential common shares | 946 | 546 | 1,161 | 337 | 1,053 | 441 | ||||||||||||||||||
Denominator for diluted net income per share-adjusted weighted average shares and assumed conversions | 24,273 | 23,795 | 24,527 | 23,598 | 24,400 | 23,696 | ||||||||||||||||||
Net income per share – basic | $ | 0.48 | $ | 0.24 | ||||||||||||||||||||
Net income per share — basic | $ | 0.34 | $ | 0.12 | $ | 0.82 | $ | 0.36 | ||||||||||||||||
Net income per share – diluted | $ | 0.46 | $ | 0.24 | ||||||||||||||||||||
Net income per share — diluted | $ | 0.33 | $ | 0.12 | $ | 0.79 | $ | 0.35 | ||||||||||||||||
6
7
Three Months Ended | Three Months Ended | Six Months Ended | ||||||||||||||||||||||
March 31, | June 30, | June 30, | ||||||||||||||||||||||
2005 | 2004 | 2005 | 2004 | 2005 | 2004 | |||||||||||||||||||
Revenue | ||||||||||||||||||||||||
Offshore energy support | $ | 45,347 | $ | 39,583 | $ | 48,843 | $ | 41,173 | $ | 94,190 | $ | 80,756 | ||||||||||||
Marine transportation services | 38,659 | 33,462 | 37,062 | 36,408 | 75,721 | 69,870 | ||||||||||||||||||
Towing | 11,654 | 9,578 | 10,894 | 9,759 | 22,548 | 19,337 | ||||||||||||||||||
Eliminations(1) | (79 | ) | (89 | ) | (112 | ) | (137 | ) | (191 | ) | (226 | ) | ||||||||||||
Total | $ | 95,581 | $ | 82,534 | $ | 96,687 | $ | 87,203 | $ | 192,268 | $ | 169,737 | ||||||||||||
Vessel and voyage expenses | ||||||||||||||||||||||||
Offshore energy support | $ | 24,329 | $ | 25,205 | $ | 24,887 | $ | 25,595 | $ | 49,216 | $ | 50,800 | ||||||||||||
Marine transportation services | 17,561 | 16,853 | 18,720 | 18,495 | 36,281 | 35,348 | ||||||||||||||||||
Towing | 6,116 | 4,938 | 6,331 | 6,241 | 12,447 | 11,179 | ||||||||||||||||||
Eliminations(1) | (79 | ) | (89 | ) | (112 | ) | (137 | ) | (191 | ) | (226 | ) | ||||||||||||
Total | $ | 47,927 | $ | 46,907 | $ | 49,826 | $ | 50,194 | $ | 97,753 | $ | 97,101 | ||||||||||||
Depreciation, amortization and drydocking | ||||||||||||||||||||||||
Offshore energy support | $ | 8,840 | $ | 9,545 | $ | 8,937 | $ | 9,746 | $ | 17,779 | $ | 19,291 | ||||||||||||
Marine transportation services | 6,596 | 5,294 | 6,485 | 6,390 | 13,080 | 11,684 | ||||||||||||||||||
Towing | 1,013 | 885 | 1,083 | 923 | 2,095 | 1,808 | ||||||||||||||||||
General corporate | 71 | 66 | 72 | 68 | 143 | 134 | ||||||||||||||||||
Total | $ | 16,520 | $ | 15,790 | $ | 16,577 | $ | 17,127 | $ | 33,097 | $ | 32,917 | ||||||||||||
Income (loss) from operations | ||||||||||||||||||||||||
Offshore energy support | $ | 7,916 | $ | (902 | ) | $ | 10,752 | $ | 3,356 | $ | 18,669 | $ | 2,454 | |||||||||||
Marine transportation services | 13,637 | 10,445 | 11,000 | 10,678 | 24,637 | 21,123 | ||||||||||||||||||
Towing | 3,078 | 2,494 | 2,204 | 1,464 | 5,281 | 3,958 | ||||||||||||||||||
General corporate | (3,195 | ) | (1,637 | ) | (5,260 | ) | (2,950 | ) | (8,455 | ) | (4,587 | ) | ||||||||||||
Total | $ | 21,436 | $ | 10,400 | $ | 18,696 | $ | 12,548 | $ | 40,132 | $ | 22,948 | ||||||||||||
Net income (loss) | ||||||||||||||||||||||||
Offshore energy support | $ | 2,700 | $ | (5,113 | ) | $ | 5,447 | $ | (964 | ) | $ | 8,147 | $ | (6,077 | ) | |||||||||
Marine transportation services | 8,969 | 6,167 | 6,385 | 5,989 | 15,354 | 12,156 | ||||||||||||||||||
Towing | 2,185 | 1,727 | 1,418 | 689 | 3,603 | 2,416 | ||||||||||||||||||
General corporate | (2,674 | ) | 2,869 | |||||||||||||||||||||
Generalcorporate | (5,229 | ) | (2,993 | ) | (7,903 | ) | (124 | ) | ||||||||||||||||
Total | $ | 11,180 | $ | 5,650 | $ | 8,021 | $ | 2,721 | $ | 19,201 | $ | 8,371 | ||||||||||||
Geographic revenue | ||||||||||||||||||||||||
Americas(2) | $ | 61,189 | $ | 50,682 | $ | 62,403 | $ | 54,489 | $ | 123,592 | $ | 105,170 | ||||||||||||
Foreign West Africa | 21,125 | 22,246 | ||||||||||||||||||||||
Foreign | ||||||||||||||||||||||||
West Africa | 21,669 | 21,793 | 42,794 | 44,039 | ||||||||||||||||||||
Middle East | 7,882 | 5,838 | 7,438 | 7,367 | 15,320 | 13,206 | ||||||||||||||||||
Southeast Asia | 5,385 | 3,768 | 5,177 | 3,554 | 10,562 | 7,322 | ||||||||||||||||||
Consolidated geographic revenue | $ | 95,581 | $ | 82,534 | $ | 96,687 | $ | 87,203 | $ | 192,268 | $ | 169,737 | ||||||||||||
(1) | Eliminations of intersegment towing revenue and intersegment marine transportation | |
(2) | Americas consist of vessels operating in the United States, the Gulf of Mexico, South America and the Caribbean. |
8
9
9
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Net income, as reported | $ | 8,021 | $ | 2,721 | $ | 19,201 | $ | 8,371 | ||||||||
Stock-based compensation expense determined under the fair value method | $ | (468 | ) | $ | (194 | ) | $ | (916 | ) | $ | (570 | ) | ||||
Pro forma net income | $ | 7,553 | $ | 2,527 | $ | 18,285 | $ | 7,801 | ||||||||
Net income per common share: | ||||||||||||||||
Basic-as reported | $ | 0.34 | $ | 0.12 | $ | 0.82 | $ | 0.36 | ||||||||
Basic-pro forma | $ | 0.32 | $ | 0.11 | $ | 0.78 | $ | 0.34 | ||||||||
Diluted-as reported | $ | 0.33 | $ | 0.12 | $ | 0.79 | $ | 0.35 | ||||||||
Diluted-pro forma | $ | 0.31 | $ | 0.11 | $ | 0.75 | $ | 0.33 | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2005 | 2004 | |||||||
Net income, as reported | $ | 11,180 | $ | 5,650 | ||||
Stock-based compensation expense determined under the fair value method | (447 | ) | (376 | ) | ||||
Pro forma net income | $ | 10,733 | $ | 5,274 | ||||
Net income per common share: | ||||||||
Basic-as reported | $ | 0.48 | $ | 0.24 | ||||
Basic-pro forma | $ | 0.46 | $ | 0.23 | ||||
Diluted-as reported | $ | 0.46 | $ | 0.24 | ||||
Diluted-pro forma | $ | 0.44 | $ | 0.22 | ||||
Effective October 14, 2004, the Company amended the stock option agreements for all of the vested and unvested awards, whereby the option exercise period was extended from 12 months to 36 months in the event of termination within two years of a change in control, as defined in the plan. In accordance with FASB Interpretation No. 44Accounting for Certain Transactions involving Stock Compensation, the amendment to the agreements is considered a modification of the award and accordingly the intrinsic value of the option award shall be measured at the date of the modification and any intrinsic value in excess of the amount measured at the original measurement date shall be recognized as compensation cost if the separation event occurs. As of December 31, 2004 the intrinsic value in excess of the amount measured at the original measurement date was $4.1 million and, if a separation event occurred within two years of a change in control, would be recognized as compensation expense in the accompanying condensed consolidated statement of operations.
10
10
In December 2004, the FASB issued Statement of Financial Accounting Standard No. 153,Exchanges of Nonmonetary Assets(“SFAS No. 153”), an amendment of APB Opinion No. 29,Accounting for Nonmonetary Transactions(“APB No. 29”). APB No. 29 is based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of assets exchanged, however certain exceptions apply. SFAS No. 153 amends APB No. 29 to eliminate the exception for nonmonetary exchanges of similar productive assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS No. 153 is effective for nonmonetary exchanges occurring in fiscal periods beginning after June 15, 2005. The Company’s adoption of SFAS No. 153 is not expected to have a material impact on the Company’s consolidated financial position and consolidated results of operations.
11
11
Supplemental financial information for the Company and its guarantor restricted subsidiaries, non-guarantor restricted subsidiaries and non-guarantor unrestricted subsidiaries under the 2003 Senior Notes is presented below.
Condensed Consolidating Balance Sheet | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
As of March 31, 2005 | ||||||||||||||||||||||||
Wholly | ||||||||||||||||||||||||
Owned | Non- | Non- | ||||||||||||||||||||||
Guarantor | Guarantor | Guarantor | ||||||||||||||||||||||
Restricted | Restricted | Unrestricted | Consolidated | |||||||||||||||||||||
Parent | Subsidiaries | Subsidiaries | Subsidiaries | Eliminations | Total | |||||||||||||||||||
Assets | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 22,955 | $ | 986 | $ | 7,369 | $ | — | $ | — | $ | 31,310 | ||||||||||||
Restricted cash | — | — | 2,756 | 27,594 | — | 30,350 | ||||||||||||||||||
Trade accounts receivable, net | 366 | 18,294 | 30,046 | 3,142 | — | 51,848 | ||||||||||||||||||
Other receivables | 1,313 | 2,257 | 360 | 191 | — | 4,121 | ||||||||||||||||||
Marine operating supplies | (698 | ) | 3,178 | 3,118 | 2,483 | — | 8,081 | |||||||||||||||||
Prepaid expenses and other | 1,806 | 514 | 1,321 | 522 | — | 4,163 | ||||||||||||||||||
Total current assets | 25,742 | 25,229 | 44,970 | 33,932 | — | 129,873 | ||||||||||||||||||
Vessels and equipment, net | 54,371 | 210,543 | 125,260 | 206,452 | — | 596,626 | ||||||||||||||||||
Deferred costs, net | 12,902 | 8,099 | 13,211 | 7,764 | — | 41,976 | ||||||||||||||||||
Investments in affiliates | 525,413 | — | — | — | (525,413 | ) | — | |||||||||||||||||
Due from affiliates | — | 50,282 | 127,080 | 3,698 | (181,060 | ) | — | |||||||||||||||||
Other | 5,807 | 712 | 1,549 | 13,105 | — | 21,173 | ||||||||||||||||||
Total assets | $ | 624,235 | $ | 294,865 | $ | 312,070 | $ | 264,951 | $ | (706,473 | ) | $ | 789,648 | |||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Accounts payable | $ | 938 | $ | 3,003 | $ | 6,185 | $ | — | $ | — | $ | 10,126 | ||||||||||||
Current maturities of long-term debt | 3,350 | 7,067 | 659 | 5,353 | — | 16,429 | ||||||||||||||||||
Current obligations under capital leases | 1,108 | 2,423 | — | — | — | 3,531 | ||||||||||||||||||
Accrued interest | 1,878 | 161 | 6 | 4,220 | — | 6,265 | ||||||||||||||||||
Accrued liabilities and other | 8,265 | 4,931 | 19,775 | 2,362 | — | 35,333 | ||||||||||||||||||
Total current liabilities | 15,539 | 17,585 | 26,625 | 11,935 | 71,684 | |||||||||||||||||||
Long-term debt | 56,688 | 51,507 | 14,853 | 200,666 | — | 323,714 | ||||||||||||||||||
Senior Notes | 148,006 | — | — | — | — | 148,006 | ||||||||||||||||||
Obligations under capital leases | 10,192 | 17,649 | — | — | — | 27,841 | ||||||||||||||||||
Due to affiliates | 177,536 | — | — | — | (177,536 | ) | — | |||||||||||||||||
Other liabilities | 5,534 | 238 | 1,846 | 45 | — | 7,663 | ||||||||||||||||||
Total liabilities | 413,495 | 86,979 | 43,324 | 212,646 | (177,536 | ) | 578,908 | |||||||||||||||||
Commitments and contingencies | — | — | — | — | — | — | ||||||||||||||||||
Total stockholders’ equity | 210,740 | 207,886 | 268,746 | 49,027 | (528,937 | ) | 210,740 | |||||||||||||||||
Total liabilities and stockholders’ equity | $ | 624,235 | $ | 294,865 | $ | 312,070 | $ | 264,951 | $ | (706,473 | ) | $ | 789,648 | |||||||||||
12
Condensed Consolidating Balance Sheet | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Balance Sheet | (in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | As of June 30, 2005 | |||||||||||||||||||||||||||||||||||||||||||||||||||
As of December 31, 2004 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Wholly | Wholly | |||||||||||||||||||||||||||||||||||||||||||||||||||
Owned | Non- | Non- | Owned | Non- | Non- | |||||||||||||||||||||||||||||||||||||||||||||||
Guarantor | Guarantor | Guarantor | Guarantor | Guarantor | Guarantor | |||||||||||||||||||||||||||||||||||||||||||||||
Restricted | Restricted | Unrestricted | Consolidated | Restricted | Restricted | Unrestricted | Consolidated | |||||||||||||||||||||||||||||||||||||||||||||
Parent | Subsidiaries | Subsidiaries | Subsidiaries | Eliminations | Total | Parent(a) | Subsidiaries(a) | Subsidiaries | Subsidiaries | Eliminations | Total | |||||||||||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 8,265 | $ | 4,983 | $ | 5,701 | $ | — | $ | — | $ | 18,949 | $ | 21,253 | $ | 2,336 | $ | 3,853 | $ | — | $ | — | $ | 27,442 | ||||||||||||||||||||||||||||
Restricted cash | — | — | 2,756 | 32,925 | — | 35,681 | — | — | 2,756 | 29,502 | — | 32,258 | ||||||||||||||||||||||||||||||||||||||||
Trade accounts receivable, net | 35 | 17,797 | 32,207 | 5,170 | — | 55,209 | (457 | ) | 18,615 | 32,251 | 1,028 | — | 51,437 | |||||||||||||||||||||||||||||||||||||||
Other receivables | 1,003 | 2,430 | 204 | 147 | — | 3,784 | 214 | 2,549 | 701 | 310 | — | 3,774 | ||||||||||||||||||||||||||||||||||||||||
Marine operating supplies | 79 | 2,503 | 2,700 | 2,586 | — | 7,868 | (1,026 | ) | 3,416 | 2,849 | 2,429 | — | 7,668 | |||||||||||||||||||||||||||||||||||||||
Due from affiliates | — | 66,330 | 119,375 | 3,372 | (189,077 | ) | — | |||||||||||||||||||||||||||||||||||||||||||||
Prepaid expenses and other | 2,005 | 285 | 1,239 | 98 | — | 3,627 | 1,856 | 547 | 1,145 | 381 | — | 3,929 | ||||||||||||||||||||||||||||||||||||||||
Total current assets | 11,387 | 94,328 | 164,182 | 44,298 | (189,077 | ) | 125,118 | 21,840 | 27,463 | 43,555 | 33,650 | — | 126,508 | |||||||||||||||||||||||||||||||||||||||
Vessels and equipment, net | 46,072 | 216,200 | 127,848 | 208,673 | — | 598,793 | 29,442 | 235,848 | 121,422 | 204,231 | — | 590,943 | ||||||||||||||||||||||||||||||||||||||||
Deferred costs, net | 14,546 | 6,625 | 15,438 | 8,444 | — | 45,053 | 7,435 | 13,591 | 12,381 | 7,086 | — | 40,493 | ||||||||||||||||||||||||||||||||||||||||
Investments in affiliates | 525,588 | 14,644 | 364 | 82,611 | (623,207 | ) | — | 562,222 | — | — | — | (562,222 | ) | — | ||||||||||||||||||||||||||||||||||||||
Due from affiliates | — | 44,508 | 137,482 | 3,855 | (185,845 | ) | — | |||||||||||||||||||||||||||||||||||||||||||||
Other | 7,231 | 813 | 1,177 | 8,603 | — | 17,824 | 10,606 | 999 | 1,560 | 13,153 | — | 26,318 | ||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 604,824 | $ | 332,610 | $ | 309,009 | $ | 352,629 | $ | (812,284 | ) | $ | 786,788 | $ | 631,545 | $ | 322,409 | $ | 316,400 | $ | 261,975 | $ | (748,067 | ) | $ | 784,262 | ||||||||||||||||||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts payable | $ | 4,802 | $ | 1,159 | $ | 8,957 | $ | — | $ | — | $ | 14,918 | $ | 154 | $ | 3,542 | $ | 6,162 | $ | — | $ | — | $ | 9,858 | ||||||||||||||||||||||||||||
Current maturities of long-term debt | 3,799 | 7,065 | 436 | 5,353 | — | 16,653 | 2,179 | 7,070 | 875 | 5,537 | — | 15,661 | ||||||||||||||||||||||||||||||||||||||||
Current obligations under capital leases | 1,093 | 2,615 | — | — | — | 3,708 | 1,129 | 2,225 | — | — | — | 3,354 | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 4,008 | 159 | 5 | 703 | 4,875 | 4,825 | 151 | 5 | 652 | — | 5,633 | |||||||||||||||||||||||||||||||||||||||||
Due to affiliates | 161,144 | — | — | — | (161,144 | ) | — | |||||||||||||||||||||||||||||||||||||||||||||
Accrued liabilities and other | 8,854 | 4,676 | 17,929 | 3,862 | — | 35,321 | 6,847 | 5,890 | 18,646 | 2,579 | — | 33,962 | ||||||||||||||||||||||||||||||||||||||||
Total current liabilities | 183,700 | 15,674 | 27,327 | 9,918 | (161,144 | ) | 75,475 | 15,134 | 18,878 | 25,688 | 8,768 | — | 68,468 | |||||||||||||||||||||||||||||||||||||||
Long-term debt | 57,544 | 53,275 | 14,480 | 200,666 | — | 325,965 | 47,022 | 49,738 | 14,742 | 197,851 | — | 309,353 | ||||||||||||||||||||||||||||||||||||||||
Senior Notes | 152,906 | — | — | — | — | 152,906 | ||||||||||||||||||||||||||||||||||||||||||||||
Senior notes | 154,219 | — | — | — | — | 154,219 | ||||||||||||||||||||||||||||||||||||||||||||||
Obligations under capital leases | 10,476 | 18,092 | — | — | — | 28,568 | 9,899 | 17,198 | — | — | — | 27,097 | ||||||||||||||||||||||||||||||||||||||||
Due to affiliates | — | 27,935 | — | — | (27,935 | ) | — | 182,671 | — | — | — | (182,671 | ) | — | ||||||||||||||||||||||||||||||||||||||
Other liabilities | 2,851 | 242 | 1,740 | 46 | — | 4,879 | 3,625 | 557 | 1,922 | 46 | — | 6,150 | ||||||||||||||||||||||||||||||||||||||||
Total liabilities | 407,477 | 115,218 | 43,547 | 210,630 | (189,079 | ) | 587,793 | 412,570 | 86,371 | 42,352 | 206,665 | (182,671 | ) | 565,287 | ||||||||||||||||||||||||||||||||||||||
Commitments and contingencies | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Total stockholders’ equity | 197,347 | 217,392 | 265,462 | 141,999 | (623,205 | ) | 198,995 | 218,975 | 236,038 | 274,048 | 55,310 | (565,396 | ) | 218,975 | ||||||||||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 604,824 | $ | 332,610 | $ | 309,009 | $ | 352,629 | $ | (812,284 | ) | $ | 786,788 | $ | 631,545 | $ | 322,409 | $ | 316,400 | $ | 261,975 | $ | (748,067 | ) | $ | 784,262 | ||||||||||||||||||||||||||
(a) | In June 2005, certain vessels owned by Parent were contributed to newly created and existing entities. Subsequent to the contributions by Parent all entities which received vessels are Wholly Owned Guarantor Restricted Subsidiaries. |
13
�� | ||||||||||||||||||||||||||||
Condensed Consolidating Statement of Operations | ||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||
Three Months Ended March 31, 2005 | ||||||||||||||||||||||||||||
Wholly | Non-Wholly | |||||||||||||||||||||||||||
Owned | Owned | Non- | Non- | |||||||||||||||||||||||||
Guarantor | Guarantor | Guarantor | Guarantor | |||||||||||||||||||||||||
Restricted | Restricted | Restricted | Unrestricted | Consolidated | ||||||||||||||||||||||||
Parent | Subsidiaries | Subsidiaries(a) | Subsidiaries | Subsidiaries | Eliminations | Total | ||||||||||||||||||||||
Revenue | $ | 11,827 | $ | 30,504 | $ | — | $ | 35,240 | $ | 18,089 | $ | (79 | ) | $ | 95,581 | |||||||||||||
Vessel and voyage expenses | 6,589 | 15,704 | — | 18,306 | 7,407 | (79 | ) | 47,927 | ||||||||||||||||||||
General and administrative | 3,473 | 2,401 | — | 3,263 | 431 | — | 9,568 | |||||||||||||||||||||
Depreciation, amortization and drydocking | 2,294 | 5,082 | — | 6,365 | 2,779 | — | 16,520 | |||||||||||||||||||||
(Gain) loss on disposal of assets, net | — | (18 | ) | — | 148 | — | — | 130 | ||||||||||||||||||||
Income (loss) from operations | (529 | ) | 7,335 | 7,158 | 7,472 | 21,436 | ||||||||||||||||||||||
Other expense | (449 | ) | (2,770 | ) | — | (2,399 | ) | (3,670 | ) | — | (9,288 | ) | ||||||||||||||||
Income (loss) before income taxes | (978 | ) | 4,565 | — | 4,759 | 3,802 | — | 12,148 | ||||||||||||||||||||
Provision for income taxes | (507 | ) | — | — | 1,475 | — | — | 968 | ||||||||||||||||||||
Net income (loss) | $ | (471 | ) | $ | 4,565 | $ | — | $ | 3,284 | $ | 3,802 | $ | — | $ | 11,180 | |||||||||||||
Condensed Consolidating Balance Sheet | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
As of December 31, 2004 | ||||||||||||||||||||||||
Wholly | ||||||||||||||||||||||||
Owned | Non- | Non- | ||||||||||||||||||||||
Guarantor | Guarantor | Guarantor | ||||||||||||||||||||||
Restricted | Restricted | Unrestricted | Consolidated | |||||||||||||||||||||
Parent | Subsidiaries | Subsidiaries | Subsidiaries | Eliminations | Total | |||||||||||||||||||
Assets | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 8,265 | $ | 4,983 | $ | 5,701 | $ | — | $ | — | $ | 18,949 | ||||||||||||
Restricted cash | — | — | 2,756 | 32,925 | — | 35,681 | ||||||||||||||||||
Trade accounts receivable, net | 35 | 17,797 | 32,207 | 5,170 | — | 55,209 | ||||||||||||||||||
Other receivables | 1,003 | 2,430 | 204 | 147 | — | 3,784 | ||||||||||||||||||
Marine operating supplies | 79 | 2,503 | 2,700 | 2,586 | — | 7,868 | ||||||||||||||||||
Due from affiliates | — | 66,330 | 119,375 | 3,372 | (189,077 | ) | — | |||||||||||||||||
Prepaid expenses and other | 2,005 | 285 | 1,239 | 98 | — | 3,627 | ||||||||||||||||||
Total current assets | 11,387 | 94,328 | 164,182 | 44,298 | (189,077 | ) | 125,118 | |||||||||||||||||
Vessels and equipment, net | 46,072 | 216,200 | 127,848 | 208,673 | — | 598,793 | ||||||||||||||||||
Deferred costs, net | 14,546 | 6,625 | 15,438 | 8,444 | — | 45,053 | ||||||||||||||||||
Investments in affiliates | 525,588 | 14,644 | 364 | 82,611 | (623,207 | ) | — | |||||||||||||||||
Other | 7,231 | 813 | 1,177 | 8,603 | — | 17,824 | ||||||||||||||||||
Total assets | $ | 604,824 | $ | 332,610 | $ | 309,009 | $ | 352,629 | $ | (812,284 | ) | $ | 786,788 | |||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Accounts payable | $ | 4,802 | $ | 1,159 | $ | 8,957 | $ | — | $ | — | $ | 14,918 | ||||||||||||
Current maturities of long-term debt | 3,799 | 7,065 | 436 | 5,353 | — | 16,653 | ||||||||||||||||||
Current obligations under capital leases | 1,093 | 2,615 | — | — | — | 3,708 | ||||||||||||||||||
Accrued interest | 4,008 | 159 | 5 | 703 | 4,875 | |||||||||||||||||||
Due to affiliates | 161,144 | — | — | — | (161,144 | ) | — | |||||||||||||||||
Accrued liabilities and other | 8,854 | 4,676 | 17,929 | 3,862 | — | 35,321 | ||||||||||||||||||
Total current liabilities | 183,700 | 15,674 | 27,327 | 9,918 | (161,144 | ) | 75,475 | |||||||||||||||||
Long-term debt | 57,544 | 53,275 | 14,480 | 200,666 | — | 325,965 | ||||||||||||||||||
Senior notes | 152,906 | — | — | — | — | 152,906 | ||||||||||||||||||
Obligations under capital leases | 10,476 | 18,092 | — | — | — | 28,568 | ||||||||||||||||||
Due to affiliates | — | 27,935 | — | — | (27,935 | ) | — | |||||||||||||||||
Other liabilities | 2,851 | 242 | 1,740 | 46 | — | 4,879 | ||||||||||||||||||
Total liabilities | 407,477 | 115,218 | 43,547 | 210,630 | (189,079 | ) | 587,793 | |||||||||||||||||
Commitments and contingencies | ||||||||||||||||||||||||
Total stockholders’ equity | 197,347 | 217,392 | 265,462 | 141,999 | (623,205 | ) | 198,995 | |||||||||||||||||
Total liabilities and stockholders’ equity | $ | 604,824 | $ | 332,610 | $ | 309,009 | $ | 352,629 | $ | (812,284 | ) | $ | 786,788 | |||||||||||
14
Condensed Consolidating Statement of Operations | ||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||
Three Months Ended June 30, 2005 | ||||||||||||||||||||||||||||
Wholly | Non-Wholly | |||||||||||||||||||||||||||
Owned | Owned | Non- | Non- | |||||||||||||||||||||||||
Guarantor | Guarantor | Guarantor | Guarantor | |||||||||||||||||||||||||
Restricted | Restricted | Restricted | Unrestricted | Consolidated | ||||||||||||||||||||||||
Parent(b) | Subsidiaries(b) | Subsidiaries(a) | Subsidiaries | Subsidiaries | Eliminations | Total | ||||||||||||||||||||||
Revenue | $ | 11,452 | $ | 31,298 | $ | — | $ | 36,780 | $ | 17,269 | $ | (112 | ) | $ | 96,687 | |||||||||||||
Vessel and voyage expenses | 7,102 | 17,209 | — | 18,274 | 7,353 | (112 | ) | 49,826 | ||||||||||||||||||||
General and administrative | 5,503 | 2,481 | — | 3,612 | 445 | — | 12,041 | |||||||||||||||||||||
Depreciation, amortization and drydocking | 2,130 | 5,156 | — | 6,512 | 2,779 | — | 16,577 | |||||||||||||||||||||
Loss (gain) on disposal of assets, net | — | 603 | — | (1,056 | ) | — | — | (453 | ) | |||||||||||||||||||
Income from operations | (3,283 | ) | 5,849 | — | 9,438 | 6,692 | 18,696 | |||||||||||||||||||||
Other expense, net | (317 | ) | (2,538 | ) | — | (2,511 | ) | (3,685 | ) | — | (9,051 | ) | ||||||||||||||||
Income before provision for income taxes | (3,600 | ) | 3,311 | — | 6,927 | 3,007 | — | 9,645 | ||||||||||||||||||||
Provision for income taxes | — | — | — | 1,624 | — | — | 1,624 | |||||||||||||||||||||
Net income | $ | (3,600 | ) | $ | 3,311 | $ | — | $ | 5,303 | $ | 3,007 | $ | — | $ | 8,021 | |||||||||||||
(a) | In December 2004, the Company purchased the minority interest in a partnership that owns theSeabulk | |
(b) | In June 2005, certain vessels owned by Parent were contributed to newly created and existing entities. Subsequent to the contributions by Parent all entities which received vessels are Wholly Owned Guarantor Restricted Subsidiaries. |
Condensed Consolidating Statement of Operations | Condensed Consolidating Statement of Operations | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2004 | Three Months Ended June 30, 2004 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Wholly | Non-Wholly | Wholly | Non-Wholly | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Owned | Owned | Non- | Non- | Owned | Owned | Non- | Non- | |||||||||||||||||||||||||||||||||||||||||||||||||
Guarantor | Guarantor | Guarantor | Guarantor | Guarantor | Guarantor | Guarantor | Guarantor | |||||||||||||||||||||||||||||||||||||||||||||||||
Restricted | Restricted | Restricted | Unrestricted | Consolidated | Restricted | Restricted | Restricted | Unrestricted | Consolidated | |||||||||||||||||||||||||||||||||||||||||||||||
Parent | Subsidiaries | Subsidiaries | Subsidiaries | Subsidiaries | Eliminations | Total | Parent | Subsidiaries | Subsidiaries | Subsidiaries | Subsidiaries | Eliminations | Total | |||||||||||||||||||||||||||||||||||||||||||
Revenue | $ | 11,913 | $ | 17,345 | $ | 3,319 | $ | 32,118 | $ | 17,928 | $ | (89 | ) | $ | 82,534 | $ | 10,377 | $ | 21,817 | $ | 3,769 | $ | 32,981 | $ | 18,396 | $ | (137 | ) | $ | 87,203 | ||||||||||||||||||||||||||
Vessel and voyage expenses | 6,057 | 11,851 | 2,190 | 18,484 | 8,414 | (89 | ) | 46,907 | 6,693 | 13,942 | 2,322 | 18,670 | 8,704 | (137 | ) | 50,194 | ||||||||||||||||||||||||||||||||||||||||
General and administrative | 1,852 | 2,564 | 210 | 4,455 | 344 | — | 9,425 | 3,150 | 1,967 | 205 | 3,647 | 354 | — | 9,323 | ||||||||||||||||||||||||||||||||||||||||||
Depreciation, amortization and drydocking | 1,717 | 3,871 | 821 | 6,684 | 2,697 | — | 15,790 | 2,213 | 4,336 | 822 | 7,051 | 2,705 | — | 17,127 | ||||||||||||||||||||||||||||||||||||||||||
(Gain) loss on disposal of assets, net | — | (1 | ) | — | 13 | — | — | 12 | ||||||||||||||||||||||||||||||||||||||||||||||||
Gain on disposal of assets, net | — | (184 | ) | — | (1,805 | ) | — | — | (1,989 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Income (loss) from operations | 2,287 | (940 | ) | 98 | 2,482 | 6,473 | — | 10,400 | ||||||||||||||||||||||||||||||||||||||||||||||||
Other income (expense) | 4,428 | (1,900 | ) | (337 | ) | (1,752 | ) | (3,918 | ) | 78 | (3,401 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Income from operations | (1,679 | ) | 1,756 | 420 | 5,418 | 6,633 | — | 12,548 | ||||||||||||||||||||||||||||||||||||||||||||||||
Other expense, net | (93 | ) | (2,337 | ) | (357 | ) | (1,635 | ) | (3,849 | ) | (20 | ) | (8,291 | ) | ||||||||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | 6,715 | (2,840 | ) | (239 | ) | 730 | 2,555 | 78 | 6,999 | |||||||||||||||||||||||||||||||||||||||||||||||
Income before provision for income taxes | (1,772 | ) | (581 | ) | 63 | 3,783 | 2,784 | (20 | ) | 4,257 | ||||||||||||||||||||||||||||||||||||||||||||||
Provision for income taxes | — | — | — | 1,349 | — | — | 1,349 | — | — | — | 1,536 | — | — | 1,536 | ||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | $ | 6,715 | $ | (2,840 | ) | $ | (239 | ) | $ | (619 | ) | $ | 2,555 | $ | 78 | $ | 5,650 | |||||||||||||||||||||||||||||||||||||||
Net income | $ | (1,772 | ) | $ | (581 | ) | $ | 63 | $ | 2,247 | $ | 2,784 | $ | (20 | ) | $ | 2,721 | |||||||||||||||||||||||||||||||||||||||
1415
Condensed Consolidating Statement of Cash Flows | ||||||||||||
(in thousands) | ||||||||||||
Three Months Ended March 31, 2005 | ||||||||||||
Wholly Owned | Non-Wholly | |||||||||||
Guarantor | Owned Guarantor | |||||||||||
Restricted | Restricted | |||||||||||
Parent | Subsidiaries | Subsidiaries(a) | ||||||||||
Net cash provided by (used in) operating activities | $ | 24,330 | $ | (3,032 | ) | $ | — | |||||
Investing activities: | ||||||||||||
Proceeds from sales of vessels and equipment | — | 2,050 | — | |||||||||
Purchases of vessels and equipment | (8,459 | ) | (610 | ) | — | |||||||
Net cash (used in) provided by investing activities | (8,459 | ) | 1,440 | — | ||||||||
Financing activities: | ||||||||||||
Proceeds from Amended Credit Facility | — | — | — | |||||||||
Payments on Amended Credit Facility | (5,500 | ) | — | — | ||||||||
Proceeds from long-term debt | 5,170 | 33 | — | |||||||||
Payments of long-term debt | (525 | ) | (1,799 | ) | — | |||||||
Payments of Title XI bonds | (450 | ) | — | — | ||||||||
Payments of obligations under capital leases | (269 | ) | (635 | ) | — | |||||||
Payment of other deferred financing costs | (2 | ) | (4 | ) | — | |||||||
Proceeds from exercise of stock options | 395 | — | — | |||||||||
Decrease in restricted cash | — | — | — | |||||||||
Net cash (used in) provided by financing activities | (1,181 | ) | (2,405 | ) | — | |||||||
Increase (decrease) in cash and cash equivalents | 14,690 | (3,997 | ) | — | ||||||||
Cash and cash equivalents at beginning of period | 8,265 | 4,983 | — | |||||||||
Cash and cash equivalents at end of period | $ | 22,955 | $ | 986 | $ | — | ||||||
Condensed Consolidating Statement of Operations | ||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||
Six Months Ended June 30, 2005 | ||||||||||||||||||||||||||||
Wholly | Non-Wholly | |||||||||||||||||||||||||||
Owned | Owned | Non- | Non- | |||||||||||||||||||||||||
Guarantor | Guarantor | Guarantor | Guarantor | |||||||||||||||||||||||||
Restricted | Restricted | Restricted | Unrestricted | Consolidated | ||||||||||||||||||||||||
Parent(b) | Subsidiaries(b) | Subsidiaries(a) | Subsidiaries | Subsidiaries | Eliminations | Total | ||||||||||||||||||||||
Revenue | $ | 23,279 | $ | 61,802 | $ | — | $ | 72,020 | $ | 35,358 | $ | (191 | ) | $ | 192,268 | |||||||||||||
Vessel and voyage expenses | 13,691 | 32,914 | — | 36,579 | 14,760 | (191 | ) | 97,753 | ||||||||||||||||||||
General and administrative | 8,976 | 4,881 | — | 6,876 | 876 | — | 21,609 | |||||||||||||||||||||
Depreciation, amortization and drydocking | 4,424 | 10,238 | — | 12,877 | 5,558 | — | 33,097 | |||||||||||||||||||||
Loss (gain) on disposal of assets, net | — | 585 | — | (908 | ) | — | — | (323 | ) | |||||||||||||||||||
Income from operations | (3,812 | ) | 13,184 | — | 16,596 | 14,164 | — | 40,132 | ||||||||||||||||||||
Other expense, net | (766 | ) | (5,308 | ) | — | (4,910 | ) | (7,355 | ) | — | (18,339 | ) | ||||||||||||||||
Income before provision for income taxes | (4,578 | ) | 7,876 | — | 11,686 | 6,809 | — | 21,793 | ||||||||||||||||||||
(Benefit) provision for income taxes | (507 | ) | — | — | 3,099 | — | — | 2,592 | ||||||||||||||||||||
Net income | $ | (4,071 | ) | $ | 7,876 | $ | — | $ | 8,587 | $ | 6,809 | $ | — | $ | 19,201 | |||||||||||||
(a) | In December 2004, the Company purchased the minority interest in a partnership that owns theSeabulk | |
(b) | In June 2005, certain vessels owned by Parent were contributed to newly created and existing entities. Subsequent to the contributions by Parent all entities which received vessels are Wholly Owned Guarantor Restricted Subsidiaries. |
15
Condensed Consolidating Statement of Cash Flows | ||||||||||||||||
(in thousands) | ||||||||||||||||
Three Months Ended March 31, 2005 | ||||||||||||||||
Non- | Non- | |||||||||||||||
Guarantor | Guarantor | |||||||||||||||
Restricted | Unrestricted | Consolidated | ||||||||||||||
Subsidiaries | Subsidiaries | Eliminations | Total | |||||||||||||
Net cash provided by (used in) operating activities | $ | 1,776 | $ | (5,331 | ) | $ | — | $ | 17,743 | |||||||
Investing activities: | ||||||||||||||||
Proceeds from sales of vessels and equipment | 200 | — | — | 2,250 | ||||||||||||
Purchases of vessels and equipment | (904 | ) | — | — | (9,973 | ) | ||||||||||
Net cash (used in) provided by investing activities | (704 | ) | — | (7,723 | ) | |||||||||||
Financing activities: | ||||||||||||||||
Proceeds from Amended Credit Facility | — | — | — | |||||||||||||
Payments on Amended Credit Facility | — | — | — | (5,500 | ) | |||||||||||
Proceeds from long-term debt | 596 | — | — | 5,799 | ||||||||||||
Payments of long-term debt | — | — | — | (2,324 | ) | |||||||||||
Payments of Title XI bonds | — | — | — | (450 | ) | |||||||||||
Payments of obligations under capital leases | –– | –– | –– | (904 | ) | |||||||||||
Payment of other deferred financing costs | — | — | — | (6 | ) | |||||||||||
Proceeds from exercise of stock options | — | — | — | 395 | ||||||||||||
Decrease in restricted cash | — | 5,331 | — | 5,331 | ||||||||||||
Net cash (used in) provided by financing activities | 596 | 5,331 | — | 2,341 | ||||||||||||
Increase (decrease) in cash and cash equivalents | 1,668 | — | — | 12,361 | ||||||||||||
Cash and cash equivalents at beginning of period | 5,701 | — | — | 18,949 | ||||||||||||
Cash and cash equivalents at end of period | $ | 7,369 | $ | — | $ | — | $ | 31,310 | ||||||||
Condensed Consolidating Statement of Operations | ||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||
Six Months Ended June 30, 2004 | ||||||||||||||||||||||||||||
Wholly | Non-Wholly | |||||||||||||||||||||||||||
Owned | Owned | Non- | Non- | |||||||||||||||||||||||||
Guarantor | Guarantor | Guarantor | Guarantor | |||||||||||||||||||||||||
Restricted | Restricted | Restricted | Unrestricted | Consolidated | ||||||||||||||||||||||||
Parent | Subsidiaries | Subsidiaries | Subsidiaries | Subsidiaries | Eliminations | Total | ||||||||||||||||||||||
Revenue | $ | 22,290 | $ | 39,162 | $ | 7,088 | $ | 65,099 | $ | 36,324 | $ | (226 | ) | $ | 169,737 | |||||||||||||
Vessel and voyage expenses | 12,750 | 25,793 | 4,512 | 37,154 | 17,118 | (226 | ) | 97,101 | ||||||||||||||||||||
General and administrative | 5,002 | 4,531 | 415 | 8,102 | 698 | — | 18,748 | |||||||||||||||||||||
Depreciation, amortization and drydocking | 3,930 | 8,207 | 1,643 | 13,735 | 5,402 | — | 32,917 | |||||||||||||||||||||
Gain on disposal of assets, net | — | (185 | ) | — | (1,792 | ) | — | — | (1,977 | ) | ||||||||||||||||||
Income from operations | 608 | 816 | 518 | 7,900 | 13,106 | — | 22,948 | |||||||||||||||||||||
Other expense, net | 4,335 | (4,237 | ) | (694 | ) | (3,387 | ) | (7,767 | ) | 58 | (11,692 | ) | ||||||||||||||||
Income before provision for income taxes | 4,943 | (3,421 | ) | (176 | ) | 4,513 | 5,339 | 58 | 11,256 | |||||||||||||||||||
Provision for income taxes | — | — | — | 2,885 | — | — | 2,885 | |||||||||||||||||||||
Net income | $ | 4,943 | $ | (3,421 | ) | $ | (176 | ) | $ | 1,628 | $ | 5,339 | $ | 58 | $ | 8,371 | ||||||||||||
16
Condensed Consolidating Statement of Cash Flows | Condensed Consolidating Statement of Cash Flows | |||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||
Three Months Ended March 31, 2004 | Six Months Ended June 30, 2005 | |||||||||||||||||||||||
Wholly Owned | Non-Wholly | Wholly Owned | Non-Wholly | |||||||||||||||||||||
Guarantor | Owned Guarantor | Guarantor | Owned Guarantor | |||||||||||||||||||||
Restricted | Restricted | Restricted | Restricted | |||||||||||||||||||||
Parent | Subsidiaries | Subsidiaries | Parent(b) | Subsidiaries(b) | Subsidiaries(a) | |||||||||||||||||||
Net cash (used in) provided by operating activities | $ | (16,904 | ) | $ | 13,702 | $ | (271 | ) | ||||||||||||||||
Net cash provided by (used in) operating activities | $ | 40,056 | $ | (155 | ) | $ | — | |||||||||||||||||
Investing activities: | ||||||||||||||||||||||||
Proceeds from sales of vessels and equipment | — | 1 | — | — | 3,443 | — | ||||||||||||||||||
Purchases of vessels and equipment | (21 | ) | (62,026 | ) | — | (14,821 | ) | (1,115 | ) | — | ||||||||||||||
Net cash (used in) provided by investing activities | (21 | ) | (62,025 | ) | — | (14,821 | ) | 2,328 | — | |||||||||||||||
Financing activities: | ||||||||||||||||||||||||
Proceeds from Amended Credit Facility | 20,000 | — | — | |||||||||||||||||||||
Payments on Amended Credit Facility | (15,500 | ) | — | — | ||||||||||||||||||||
Proceeds from long-term debt | 7,362 | 67 | — | |||||||||||||||||||||
Payments of long-term debt | (525 | ) | (318 | ) | — | (1,055 | ) | (3,599 | ) | — | ||||||||||||||
Proceeds from long-term debt | — | 49,600 | — | |||||||||||||||||||||
Payments of Title XI bonds | (450 | ) | — | — | (2,949 | ) | — | — | ||||||||||||||||
Payments of obligations under capital leases | (254 | ) | (611 | ) | — | (541 | ) | (1,284 | ) | — | ||||||||||||||
Payments of deferred financing costs related to 2003 Senior Notes and Amended Credit Facility | (95 | ) | — | — | ||||||||||||||||||||
Payment of other deferred financing costs | — | (506 | ) | — | (10 | ) | (4 | ) | — | |||||||||||||||
Proceeds from the exercise of stock options | 167 | — | — | |||||||||||||||||||||
Increase in restricted cash | — | — | — | |||||||||||||||||||||
Proceeds from exercise of stock options | 446 | — | — | |||||||||||||||||||||
Decrease in restricted cash | — | — | — | |||||||||||||||||||||
Net cash provided by (used in) financing activities | 18,843 | 48,165 | — | |||||||||||||||||||||
Net cash (used in) provided by financing activities | (12,247 | ) | (4,820 | ) | — | |||||||||||||||||||
Increase (decrease) in cash and cash equivalents | 1,918 | (158 | ) | (271 | ) | |||||||||||||||||||
Change in cash and cash equivalents | 12,988 | (2,647 | ) | — | ||||||||||||||||||||
Cash and cash equivalents at beginning of period | 217 | 452 | 1,030 | 8,265 | 4,983 | — | ||||||||||||||||||
Cash and cash equivalents at end of period | $ | 2,135 | $ | 294 | $ | 759 | $ | 21,253 | $ | 2,336 | $ | — | ||||||||||||
(a) | In December 2004, the Company purchased the minority interest in a partnership that owns theSeabulk America. Subsequent to the acquisition, all Guarantor Restricted Subsidiaries are wholly-owned subsidiaries of the Company. | |
(b) | In June 2005, certain vessels owned by Parent were contributed to newly created and existing entities. Subsequent to the contributions by Parent all entities which received vessels are Wholly Owned Guarantor Restricted Subsidiaries. |
17
Condensed Consolidating Statement of Cash Flows | ||||||||||||||||
(in thousands) | ||||||||||||||||
Three Months Ended March 31, 2004 | ||||||||||||||||
Non- | Non- | |||||||||||||||
Guarantor | Guarantor | |||||||||||||||
Restricted | Unrestricted | Consolidated | ||||||||||||||
Subsidiaries | Subsidiaries | Eliminations | Total | |||||||||||||
Net cash (used in) provided by operating activities | $ | 11,321 | $ | 3,635 | $ | — | $ | 11,483 | ||||||||
Investing activities: | ||||||||||||||||
Proceeds from sales of vessels and equipment | 600 | — | — | 601 | ||||||||||||
Purchases of vessels and equipment | (8,975 | ) | (18 | ) | — | (71,040 | ) | |||||||||
Net cash (used in) provided by investing activities | (8,375 | ) | (18 | ) | — | (70,439 | ) | |||||||||
Financing activities: | ||||||||||||||||
Proceeds from Amended Credit Facility | — | — | — | 20,000 | ||||||||||||
Payments of long-term debt | — | — | — | (843 | ) | |||||||||||
Proceeds from long-term debt | — | — | — | 49,600 | ||||||||||||
Payments of Title XI bonds | — | — | — | (450 | ) | |||||||||||
Payments of obligations under capital leases | — | — | — | (865 | ) | |||||||||||
Payments of deferred financing costs related to 2003 Senior Notes and Amended Credit Facility | — | — | — | (95 | ) | |||||||||||
Payment of other deferred financing costs | — | — | — | (506 | ) | |||||||||||
Proceeds from the exercise of stock options | –– | –– | –– | 167 | ||||||||||||
Increase is restricted cash | –– | (3,617 | ) | –– | (3,617 | ) | ||||||||||
Net cash provided by (used in) financing activities | — | (3,617 | ) | — | 63,391 | |||||||||||
Increase (decrease) in cash and cash equivalents | 2,946 | — | — | 4,435 | ||||||||||||
Cash and cash equivalents at beginning of period | 5,700 | — | — | 7,399 | ||||||||||||
Cash and cash equivalents at end of period | $ | 8,646 | $ | — | $ | — | $ | 11,834 | ||||||||
Condensed Consolidating Statement of Cash Flows | ||||||||||||||||
(in thousands) | ||||||||||||||||
Six Months Ended June 30, 2005 | ||||||||||||||||
Non- | ||||||||||||||||
Non- Guarantor | Guarantor | |||||||||||||||
Restricted | Unrestricted | Consolidated | ||||||||||||||
Subsidiaries | Subsidiaries | Eliminations | Total | |||||||||||||
Net cash provided by (used in) operating activities | $ | (3,529 | ) | $ | (792 | ) | $ | — | $ | 35,580 | ||||||
Investing activities: | ||||||||||||||||
Proceeds from sales of vessels and equipment | 1,685 | — | — | 5,128 | ||||||||||||
Purchases of vessels and equipment | (705 | ) | — | — | (16,641 | ) | ||||||||||
Net cash (used in) provided by investing activities | 980 | — | — | (11,513 | ) | |||||||||||
Financing activities: | ||||||||||||||||
Payments on Amended Credit Facility | — | — | — | (15,500 | ) | |||||||||||
Proceeds from long-term debt | 701 | — | — | 8,130 | ||||||||||||
Payments of long-term debt | — | — | — | (4,654 | ) | |||||||||||
Payments of Title XI bonds | — | (2,631 | ) | — | (5,580 | ) | ||||||||||
Payments of obligations under capital leases | — | — | — | (1,825 | ) | |||||||||||
Payment of other deferred financing costs | — | — | — | (14 | ) | |||||||||||
Proceeds from exercise of stock options | — | — | — | 446 | ||||||||||||
Decrease in restricted cash | — | 3,423 | — | 3,423 | ||||||||||||
Net cash (used in) provided by financing activities | 701 | 792 | — | (15,574 | ) | |||||||||||
Change in cash and cash equivalents | (1,848 | ) | — | — | 8,493 | |||||||||||
Cash and cash equivalents at beginning of period | 5,701 | — | — | 18,949 | ||||||||||||
Cash and cash equivalents at end of period | $ | 3,853 | $ | — | $ | — | $ | 27,442 | ||||||||
(a) | In December 2004, the Company purchased the minority interest in a partnership that owns theSeabulk America. Subsequent to the acquisition, all Guarantor Restricted Subsidiaries are wholly-owned subsidiaries of the Company. | |
(b) | In June 2005, certain vessels owned by Parent were contributed to newly created and existing entities. Subsequent to the contributions by Parent all entities which received vessels are Wholly Owned Guarantor Restricted Subsidiaries. |
18
Condensed Consolidating Statement of Cash Flows | ||||||||||||
(in thousands) | ||||||||||||
Six Months Ended June 30, 2004 | ||||||||||||
Wholly Owned | Non-Wholly | |||||||||||
Guarantor | Owned Guarantor | |||||||||||
Restricted | Restricted | |||||||||||
Parent | Subsidiaries | Subsidiaries | ||||||||||
Net cash (used in) provided by operating activities | $ | (7,836 | ) | $ | 17,674 | $ | (991 | ) | ||||
Investing activities: | ||||||||||||
Proceeds from disposals of assets | — | 311 | — | |||||||||
Purchases of vessels and equipment | (6,272 | ) | (62,219 | ) | — | |||||||
Investment in Joint Venture | — | — | — | |||||||||
Net cash used in financing activities | (6,272 | ) | (61,908 | ) | — | |||||||
Financing activities: | ||||||||||||
Proceeds from Amended Credit Facility | 20,000 | — | — | |||||||||
Proceeds from long-term debt | — | 49,600 | — | |||||||||
Payments of long-term debt | (1,050 | ) | (2,116 | ) | — | |||||||
Payments of Title XI bonds | (1,075 | ) | — | — | ||||||||
Payments of obligations under capital leases | (512 | ) | (1,213 | ) | — | |||||||
Payments of deferred financing costs related to 2003 Senior Notes and Amended Credit Facility | (285 | ) | — | — | ||||||||
Payments of other deferred financing costs | (86 | ) | (569 | ) | — | |||||||
Proceeds from exercise of stock options | 167 | — | — | |||||||||
Decrease in restricted cash | — | — | — | |||||||||
Net cash provided by (used in) financing activities | 17,159 | 45,702 | — | |||||||||
Change in cash and cash equivalents | 3,051 | 1,468 | (991 | ) | ||||||||
Cash and cash equivalents at beginning of period | 217 | 452 | 1,030 | |||||||||
Cash and cash equivalents at end of period | $ | 3,268 | $ | 1,920 | $ | 39 | ||||||
19
Condensed Consolidating Statement of Cash Flows | ||||||||||||||||
(in thousands) | ||||||||||||||||
Six Months Ended June 30, 2004 | ||||||||||||||||
Non- | ||||||||||||||||
Non-Guarantor | Guarantor | |||||||||||||||
Restricted | Unrestricted | Consolidated | ||||||||||||||
Subsidiaries | Subsidiaries | Eliminations | Total | |||||||||||||
Net cash (used in) provided by operating activities | $ | 11,804 | $ | 444 | $ | — | $ | 21,095 | ||||||||
Investing activities: | ||||||||||||||||
Proceeds from disposals of assets | 2,834 | — | — | 3,145 | ||||||||||||
Purchases of vessels and equipment | (15,015 | ) | (27 | ) | — | (83,533 | ) | |||||||||
Investment in Joint Venture | (240 | ) | — | — | (240 | ) | ||||||||||
Net cash used in financing activities | (12,421 | ) | (27 | ) | (80,628 | ) | ||||||||||
Financing activities: | ||||||||||||||||
Proceeds from Amended Credit Facility | — | — | — | 20,000 | ||||||||||||
Proceeds from long-term debt | — | — | — | 49,600 | ||||||||||||
Payments of long-term debt | — | — | — | (3,166 | ) | |||||||||||
Payments of Title XI bonds | — | (2,460 | ) | — | (3,535 | ) | ||||||||||
Payments of obligations under capital leases | — | — | — | (1,725 | ) | |||||||||||
Payments of deferred financing costs related to 2003 Senior Notes and Amended Credit Facility | — | — | — | (285 | ) | |||||||||||
Payments of other deferred financing costs | (28 | ) | — | — | (683 | ) | ||||||||||
Proceeds from exercise of stock options | — | — | — | 167 | ||||||||||||
Decrease in restricted cash | — | 2,043 | — | 2,043 | ||||||||||||
Net cash provided by (used in) financing activities | (28 | ) | (417 | ) | — | 62,416 | ||||||||||
Change in cash and cash equivalents | (645 | ) | — | — | 2,883 | |||||||||||
Cash and cash equivalents at beginning of period | 5,700 | — | — | 7,399 | ||||||||||||
Cash and cash equivalents at end of period | $ | 5,055 | $ | — | $ | — | $ | 10,282 | ||||||||
20
Critical Accounting Policies and Estimates
For general information concerning critical accounting policies as well as estimates, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations, Critical Accounting Policies and Estimates” in the Company’s 2004 Annual Report on Form 10-K and Form 10-K/A Amendment No. 1.
Revenue from
As the Company’s offshore energy support fleet gets older, the Company’s strategy is to look for opportunities to improve its age profile by acquiring higher-value, larger and newer vessels and selling a number of older and smaller vessels, mainly crewboats and vessels approaching the end of their useful lives.
19
Periods for collection of receivables in certain foreign areas of operation in the offshore business tend to be longer than is usual for the United States. The Company regularly monitors all such accounts receivable and believes that it has accrued adequate reserves.
The Company has a newbuild program for selective offshore fleet replacement and enhancement. In 2004, the Company added one vessel to the Brazilian fleet, theSeabulk Brasil; and one vessel to the West African fleet, theSeabulk Advantage. In January 2005, the Company added one vessel to the Brazilian fleet, theSeabulk Angra. The Company also executed contracts in 2004 for two offshore newbuilds for delivery in May and August 2005 to cover contracts in Angola. In addition, in 2004 and in May 2005 the Company signed contracts for a total of eight anchor handling tug supply vessels for delivery in 2006 and 2007.
In January 2005, the Company took delivery of and began to operate theSeabulk Carmen, a supply boat operating in the U.S. Gulf of Mexico. The transaction to acquire theSeabulk Carmen was a like-kind exchange of assets of equal value and was a tax-free transaction to the Company, in which the Company delivered three older crew boats and one older geophysical vessel in exchange for theSeabulk Carmen.
In March 2005, the Company sold theSeabulk Veritas, antwo offshore support vessel operating in the U.S Gulf of Mexico. Proceeds from the sale of the vessel were $200,000. The gain on the sale of the vessel was approximately $45,000.
In March 2005, the Companyvessels, and sold theSeabulk Neptune, an anchor handling tug operating in West Africa. Proceeds from the sale of the vessel were approximately $200,000. The loss on the sale of the vessel was approximately $148,000.
In March 2005, the Company delivered theSeabulk Winn, a crew boat operating in the U.S. Gulf of Mexico, and $550,000 in exchange for theC/Crusader, a supply boat, and the assignment of a purchase and sale agreement. The Company subsequently sold theC/Crusaderunder the terms of the assigned purchase and sale agreement for proceeds of approximately $1.9 million. The transaction was a like-kind exchange of assets of equal value and was a tax-free transaction to the Company.
eleven offshore support vessels.
2021
Q1 2005 | ||||||||||||||||||||
AHTS/ | AHT/ | Crew/ | Other | |||||||||||||||||
Supply | Tugs | Utility | ||||||||||||||||||
Americas(1) | ||||||||||||||||||||
Vessels (2) | 24 | — | 14 | 1 | ||||||||||||||||
Effective Utilization (3) | 64 | % | — | 77 | % | — | ||||||||||||||
Day Rate | $ | 5,518 | — | $ | 3,196 | — | ||||||||||||||
West Africa | ||||||||||||||||||||
Vessels (2) | 29 | 2 | 3 | 1 | ||||||||||||||||
Effective Utilization (3) | 87 | % | 79 | % | 92 | % | — | |||||||||||||
Day Rate | $ | 7,564 | $ | 7,076 | $ | 3,635 | — | |||||||||||||
Middle East | ||||||||||||||||||||
Vessels (2) | 8 | 5 | 7 | 4 | ||||||||||||||||
Effective Utilization (3) | 84 | % | 95 | % | 72 | % | 72 | % | ||||||||||||
Day Rate | $ | 4,298 | $ | 4,686 | $ | 1,614 | $ | 4,095 | ||||||||||||
Southeast Asia | ||||||||||||||||||||
Vessels (2) | 7 | — | — | 1 | ||||||||||||||||
Effective Utilization (3) | 94 | % | — | — | — | |||||||||||||||
Day Rate | $ | 6,159 | — | — | — | |||||||||||||||
Q1 2005 | Q2 2005 | |||||||||||||||||||||||||||||||
AHTS/ | AHT/ | Crew/ | AHTS/ | AHT/ | Crew/ | |||||||||||||||||||||||||||
Supply | Tugs | Utility | Other | Supply | Tugs | Utility | Other | |||||||||||||||||||||||||
Americas(1) | ||||||||||||||||||||||||||||||||
Vessels (2) | 24 | — | 14 | 1 | 22 | — | 14 | 1 | ||||||||||||||||||||||||
Effective Utilization | 64 | % | — | 77 | % | — | 79 | % | — | 78 | % | — | ||||||||||||||||||||
Average Day Rate | $ | 5,518 | — | $ | 3,196 | — | $ | 6,203 | — | $ | 3,441 | — | ||||||||||||||||||||
West Africa | ||||||||||||||||||||||||||||||||
Vessels (2) | 29 | 2 | 3 | 1 | 29 | 3 | 2 | — | ||||||||||||||||||||||||
Effective Utilization | 87 | % | 79 | % | 92 | % | — | 95 | % | 65 | % | 93 | % | — | ||||||||||||||||||
Average Day Rate | $ | 7,564 | $ | 7,076 | $ | 3,653 | — | $ | 7,419 | $ | 7,007 | $ | 3,877 | — | ||||||||||||||||||
Middle East | ||||||||||||||||||||||||||||||||
Vessels (2) | 8 | 5 | 7 | 4 | 8 | 5 | 7 | 3 | ||||||||||||||||||||||||
Effective Utilization | 84 | % | 95 | % | 72 | % | 72 | % | 79 | % | 83 | % | 87 | % | 88 | % | ||||||||||||||||
Average Day Rate | $ | 4,298 | $ | 4,686 | $ | 1,614 | $ | 4,095 | $ | 4,385 | $ | 4,740 | $ | 1,733 | $ | 4,642 | ||||||||||||||||
Southeast Asia | ||||||||||||||||||||||||||||||||
Vessels (2) | 7 | — | — | 1 | 7 | — | — | 1 | ||||||||||||||||||||||||
Effective Utilization | 94 | % | — | — | — | 94 | % | — | — | — | ||||||||||||||||||||||
Average Day Rate | $ | 6,159 | — | — | — | $ | 6,136 | — | — | — |
(1) | Americas consists of vessels operating in the United States, the Gulf of Mexico, South America, and the Caribbean. | |
(2) | Held-for-sale | |
22
Q1 2004 | Q2 2004 | Q3 2004 | Q4 2004 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AHTS/ | AHT/ | Crew/ | AHTS/ | AHT/ | Crew/ | AHTS/ | AHT/ | Crew/ | AHTS/ | AHT/ | Crew/ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Supply | Tugs | Utility | Other | Supply | Tugs | Utility | Other | Supply | Tugs | Utility | Other | Supply | Tugs | Utility | Other | |||||||||||||||||||||||||||||||||||||||||||||||||
Americas(1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vessels(2) | 21 | — | 22 | 2 | 21 | — | 21 | 2 | 21 | — | 18 | 2 | 22 | — | 18 | 2 | ||||||||||||||||||||||||||||||||||||||||||||||||
Laid-Up | — | — | — | 1 | — | — | — | 1 | — | — | — | 1 | — | — | — | 1 | ||||||||||||||||||||||||||||||||||||||||||||||||
Effective Utilization | 43 | % | — | 63 | % | — | 52 | % | — | 67 | % | — | 68 | % | — | 73 | % | — | 69 | % | — | 72 | % | — | ||||||||||||||||||||||||||||||||||||||||
Day Rate | $ | 5,001 | — | $ | 2,410 | — | $ | 4,879 | — | $ | 2,442 | — | $ | 4,768 | — | $ | 2,705 | — | $ | 5,421 | — | $ | 2,958 | — | ||||||||||||||||||||||||||||||||||||||||
West Africa | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vessels(2) | 33 | 4 | 3 | — | 33 | 4 | 3 | — | 33 | 4 | 3 | — | 32 | 2 | 3 | 1 | ||||||||||||||||||||||||||||||||||||||||||||||||
Effective Utilization | 82 | % | 86 | % | 98 | % | — | 83 | % | 75 | % | 94 | % | — | 78 | % | 67 | % | 93 | % | — | 77 | % | 70 | % | 84 | % | — | ||||||||||||||||||||||||||||||||||||
Day Rate | $ | 7,281 | $ | 6,193 | $ | 3,413 | — | $ | 7,350 | $ | 6,831 | $ | 3,524 | — | $ | 7,300 | $ | 6,196 | $ | 3,620 | — | $ | 7,574 | $ | 6,329 | $ | 3,664 | — | ||||||||||||||||||||||||||||||||||||
Middle East | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vessels(2) | 6 | 5 | 7 | 5 | 6 | 5 | 7 | 4 | 6 | 5 | 7 | 4 | 6 | 5 | 7 | 4 | ||||||||||||||||||||||||||||||||||||||||||||||||
Effective Utilization | 89 | % | 80 | % | 79 | % | 43 | % | 97 | % | 84 | % | 92 | % | 78 | % | 83 | % | 75 | % | 93 | % | 95 | % | 86 | % | 64 | % | 80 | % | 99 | % | ||||||||||||||||||||||||||||||||
Day Rate | $ | 3,750 | $ | 4,565 | $ | 1,740 | $ | 3,966 | $ | 3,880 | $ | 4,739 | $ | 1,712 | $ | 5,043 | $ | 3,827 | $ | 4,951 | $ | 1,659 | $ | 4,804 | $ | 3,782 | $ | 5,388 | $ | 1,580 | $ | 4,733 | ||||||||||||||||||||||||||||||||
Southeast Asia | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vessels(2) | 8 | — | — | 1 | 7 | — | — | 1 | 7 | — | — | 1 | 7 | — | — | 1 | ||||||||||||||||||||||||||||||||||||||||||||||||
Effective Utilization | 66 | % | — | — | — | 77 | % | — | — | — | 88 | % | — | — | — | 93 | % | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Day Rate | $ | 5,422 | — | — | — | $ | 5,388 | — | — | — | $ | 5,400 | — | — | — | $ | 5,327 | — | — | — |
Q1 2004 | Q2 2004 | Q3 2004 | Q4 2004 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AHTS/ | AHT/ | Crew/ | Other | AHTS/ | AHT/ | Crew/ | Other | AHTS/ | AHT/ | Crew/ | Other | AHTS/ | AHT/ | Crew/ | Other | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Supply | Tugs | Utility | Supply | Tugs | Utility | Supply | Tugs | Utility | Supply | Tugs | Utility | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Americas(1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vessels(2) | 21 | — | 22 | 2 | 21 | — | 21 | 2 | 21 | — | 18 | 2 | 22 | — | 18 | 2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Laid-Up | — | — | — | 1 | — | — | — | 1 | — | — | — | 1 | — | — | — | 1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Effective Utilization(3) | 43 | % | — | 63 | % | — | 52 | % | — | 67 | % | — | 68 | % | — | 73 | % | — | 69 | % | — | 72 | % | — | ||||||||||||||||||||||||||||||||||||||||||||
Day Rate | $ | 5,001 | — | $ | 2,410 | — | $ | 4,879 | — | $ | 2,442 | — | $ | 4,768 | — | $ | 2,705 | — | $ | 5,421 | — | $ | 2,958 | — | ||||||||||||||||||||||||||||||||||||||||||||
West Africa | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vessels(2) | 33 | 4 | 3 | — | 33 | 4 | 3 | — | 33 | 4 | 3 | — | 32 | 2 | 3 | 1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Effective Utilization(3) | 82 | % | 86 | % | 98 | % | — | 83 | % | 75 | % | 94 | % | — | 78 | % | 67 | % | 93 | % | — | 77 | % | 70 | % | 84 | % | — | ||||||||||||||||||||||||||||||||||||||||
Day Rate | $ | 7,281 | $ | 6,193 | $ | 3,413 | — | $ | 7,350 | $ | 6,831 | $ | 3,524 | — | $ | 7,300 | $ | 6,196 | $ | 3,620 | — | $ | 7,574 | $ | 6,329 | $ | 3,664 | — | ||||||||||||||||||||||||||||||||||||||||
Middle East | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vessels(2) | 6 | 5 | 7 | 5 | 6 | 5 | 7 | 4 | 6 | 5 | 7 | 4 | 6 | 5 | 7 | 4 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Effective Utilization(3) | 89 | % | 80 | % | 79 | % | 43 | % | 97 | % | 84 | % | 92 | % | 78 | % | 83 | % | 75 | % | 93 | % | 95 | % | 86 | % | 64 | % | 80 | % | 99 | % | ||||||||||||||||||||||||||||||||||||
Day Rate | $ | 3,750 | $ | 4,565 | $ | 1,740 | $ | 3,966 | $ | 3,880 | $ | 4,739 | $ | 1,712 | $ | 5,043 | $ | 3,827 | $ | 4,951 | $ | 1,659 | $ | 4,804 | $ | 3,782 | $ | 5,388 | $ | 1,580 | $ | 4,733 | ||||||||||||||||||||||||||||||||||||
Southeast Asia | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vessels(2) | 8 | — | — | 1 | 7 | — | — | 1 | 7 | — | — | 1 | 7 | — | — | 1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Effective Utilization(3) | 66 | % | — | — | — | 77 | % | — | — | — | 88 | % | — | — | — | 93 | % | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Day Rate | $ | 5,422 | — | — | — | $ | 5,388 | — | — | — | $ | 5,400 | — | — | — | $ | 5,327 | — | — | — |
(1) | ||
(2) | Held-for-sale | |
2123
six months ended June 30, 2005.
vessel sales.
Revenue from the Company’s marine transportation services business is derived from the operations of nine U.S.-flag tankers carrying petroleum, crude oil, and chemical products in the U.S.Jones Acttrade, one in U.S. foreign commerce and two foreign-flag tankers in foreign trade.
The Company’s U.S.-flag product tanker fleet operates on long-term time charters, consecutive voyage charters and contracts of affreightment. The Company currently has seven tankers operating under time charters, one under a consecutive voyage charter, and two under contracts of affreightment. The two foreign-flag tankers have been placed in an international product tanker pool.
Three Months Ended March 31, | Six Months Ended June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Number of vessels operated at end of period | 12 | 12 | 12 | 12 | ||||||||||||
Revenue (in thousands) | $ | 38,659 | $ | 33,462 | $ | 75,721 | $ | 69,870 |
U.S.-Flag Tankers.Demand for the Company’s tenJones Actproduct carriers is dependent on several factors, including production and refining levels in the United States, domestic consumer and industrial consumption of petroleum products and chemicals, and competition from foreign imports. The Company owned nine U.S.-flag tankers and operated a tenth under a bareboat charter at March 31, 2005. Five of the petroleum product tankers are double-hull, state-of-the-art vessels, of which two have chemical-carrying capability. The Company’sJones Actfleet is benefiting from higher energy demand and a tightening domestic tanker market, although increased competition from imported products has had a moderating effect onJones Acttanker rates. One of the Company’s single-hull vessels is scheduled for retirement in 2007, one in 2008, two in 2011, and one in 2015. None of the five U.S.-flag double-hull tankers has an OPA 90 restriction.
22
Foreign-Flag Tankers.The international product tanker market is highly cyclical and dependent upon the worldwide demand for refined products. Surging demand from China and an increase in U.S. petroleum product imports have favorably impacted international tanker rates, which are currently high by historical standards. The Company’s two double-hull foreign-flag carriers are benefiting from the current high rates. Neither of them has a regulatory restriction.
Seabulk Towing
Revenue derived from the Company’s tug operations is primarily a function of the rates charged for their services, the volume of vessel traffic requiring docking and other ship-assist services, competition and the number of tugs available to provide services. Vessel traffic is largely a function of the general trade activity in the region served by the port.
Three Months Ended March 31, | Six Months Ended June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Number of tugs at end of period | 26 | 26 | 26 | 26 | ||||||||||||
Revenue (in thousands) | $ | 11,654 | $ | 9,578 | $ | 22,548 | $ | 19,337 |
2324
Three Months Ended March 31, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||||||||||||||||||
($’s in millions) | (in millions) | |||||||||||||||||||||||||||||||
Revenue | $ | 95.6 | 100 | % | $ | 82.5 | 100 | % | $ | 192.3 | 100 | % | $ | 169.7 | 100 | % | ||||||||||||||||
Vessel and voyage expenses | 47.9 | 50 | % | 46.9 | 57 | % | 97.8 | 51 | % | 97.1 | 57 | % | ||||||||||||||||||||
General and administrative | 9.7 | 10 | % | 9.4 | 11 | % | 21.6 | 11 | % | 18.8 | 11 | % | ||||||||||||||||||||
Depreciation, amortization, drydocking and Other | 16.5 | 17 | % | 15.8 | 19 | % | ||||||||||||||||||||||||||
Loss on disposal of assets, net | 0.1 | 0 | % | — | 0 | % | ||||||||||||||||||||||||||
Depreciation, amortization, and drydocking | 33.1 | 17 | % | 32.9 | 19 | % | ||||||||||||||||||||||||||
Gain on disposal of assets, net | (0.3 | ) | (0 | %) | (2.0 | ) | (1 | %) | ||||||||||||||||||||||||
Income from operations | $ | 21.4 | 23 | % | $ | 10.4 | 13 | % | $ | 40.1 | 21 | % | $ | 22.9 | 14 | % | ||||||||||||||||
Interest expense, net | $ | 9.3 | 10 | % | $ | 8.0 | 10 | % | $ | 18.4 | 10 | % | $ | 16.3 | 10 | % | ||||||||||||||||
Other income (expense), net | $ | — | 0 | % | $ | 4.6 | 6 | % | $ | 0.0 | 0 | % | $ | 4.6 | 3 | % | ||||||||||||||||
Income before provision for income taxes | $ | 12.1 | 13 | % | $ | 7.0 | 8 | % | $ | 21.8 | 11 | % | $ | 11.3 | 7 | % | ||||||||||||||||
Net income | $ | 11.2 | 12 | % | $ | 5.7 | 7 | % | $ | 19.2 | 10 | % | $ | 8.4 | 5 | % | ||||||||||||||||
fleet.
2425
General and Administrative. General and administrative expenses during the first quarter of 2005 remained substantially the same at $9.6 million versus $9.4 million
the Company’s P&I insurance reserve.
Loss on Disposal of Assets, Net.Loss on disposal of assets during the first quarter of 2005 increased to a loss of $0.1 million from $12,000 in the comparable period of 2004. The number of vessels sold or exchanged increased to seven11 for the threesix months ended March 31,June 30, 2005 compared to onethree for the same period in 2004.
However, sales in 2004 included theSeabulk Maintainer, which had a gain of approximately $1.5 million.
Liquidity and Capital Resources
As of March 31, 2005, the Company had cash on hand of $31.3 million and working capital of approximately $58.2 million, which includes $30.4 million in restricted cash. The Company’s main sources of liquidity are cash from operations, borrowings under its amended credit facility, and proceeds from the sale of vessels with marginal operating performance. As of March 31, 2005, cash from operations totaled $17.7 million, which was $6.3 million more than in the same period in 2004. Additionally, the Company received $2.3 million from the sale of vessels during the first quarter of 2005. As of March 31, 2005, availability under our Amended Credit Facility was approximately $2.6 million. While the Company believes cash from operations will continue to be a meaningful source of liquidity, factors that can affect our operating earnings and liquidity are discussed further under “Additional Business and Corporate Risk Factors” in Part 1, Item 1 of the Company’s 2004 Annual Report on Form 10-K and Form 10-K/A Amendment No. 1. The Company relies on external financing to fund a substantial portion of the purchase price of new vessels to its fleet. The Company believes it will obtain commitments from various lenders to fund at least 80% of the cost of vessels it has contracted to purchase.
25
Long-Term Debt.Long-term debt, including capital leases and current maturities, consisted of the following (in millions):
Outstanding | Outstanding | |||||||||||
Balance | Balance | |||||||||||
as of | as of | Interest Rate | ||||||||||
March 31, | December 31, | as of | ||||||||||
Facility | 2005 | 2004 | Maturity | May 1, 2005 | ||||||||
2003 Senior Notes | $ | 148.0 | $ | 152.9 | 2013 | 9.50%(a) | ||||||
Amended Credit Facility | 43.0 | 48.5 | 2008 | 7.13% | ||||||||
Title XI financing bonds | 208.5 | 209.0 | 2006 to 2024 | 5.86% to 8.85% | ||||||||
Other notes payable | 88.6 | 85.1 | 2006 to 2011 | 4.00% to 8.50% | ||||||||
Capital leases | 31.4 | 32.3 | 2005 to 2013 | 5.57% to 10.00% | ||||||||
Total | $ | 519.5 | $ | 527.8 | ||||||||
In addition to the Amended Credit Facility balance of approximately $43.0 million, there are $22.4 million in outstanding letters of credit as of March 31, 2005. The Company is subject to semi-annual reductions on the Amended Credit Facility each February and August with the final payment due in August 2008.
Material Changes in Contractual Obligations.On March 4, 2005, the Company made the final principal redemption on the United States Government Guarantee Ship Financing Bonds, Hull 2318 Issue, 10.10% Sinking Fund Bonds, Series C, issued in connection with the Title XI financing on its U.S.-flag product tanker,Seabulk Trader(ex:HMI Dynachem). Accordingly, all of the Shipowner’s issued and outstanding United States Government Guarantee Ship Financing Bonds, Hull 2318 Issue, comprised on Sinking Fund Bond Series A, Series B, and Dynachem Series B (which were previously retired or paid) and Series C, have been retired or paid within the meaning of the indenture between the Shipowner’s predecessor, Ogden Clover Transport, Inc. and Citibank, N.A., as Trustee, effective March 4, 2005; and each and every guarantee, as that term is defined in Schedule A to the Indenture, has been released and is of no further force and effect.
Capital Requirements.The Company’s capital requirements arise primarily from its need to service debt, fund working capital, maintain and improve its vessels, and make vessel acquisitions.
During the first quarter of 2005, the Company incurred $13.9 million in capital improvements for drydocking costs, capital expenditures and newbuild vessels. Of this amount, approximately $3.9 million was expended for drydockings, approximately $9.3 million for five offshore newbuild vessels, $0.1 million for capital expenditures and $0.6 million on the exchange for theC/Crusader.
Management expects to continue implementation of the initiative to sell unprofitable vessels in an effort to improve profitability and liquidity.
The Company’s expected remaining 2005 capital requirements are $26.1 million for drydocking costs and $17.9 million for newbuild vessels. The Company expects that cash flow from operations will continue to be a significant source of funds for its working capital and capital requirements.
26
The Company’s Amended Credit Facility contains certain restrictive financial covenants that, among other things, require minimum levels of EBITDA and tangible net worth. The Company was in compliance with all such covenants as of March 31, 2005.
The Company is in compliance with the financial covenants of the 2003 Senior Notes as of March 31, 2005. The 2003 Senior Notes require the Company to make payments of interest only. Based on current financial projections, the Company expects to be in compliance through the balance of 2005.
The possibility exists that unforeseen events or changes in business or regulatory conditions, including deterioration in its markets, could prevent the Company from meeting targeted operating results. If unforeseen events or changes in business or regulatory conditions prevent the Company from meeting targeted operating results, the Company will continue to pursue alternative plans including additional asset sales, additional reductions in operating expenses, and deferral of capital expenditures, which should enable the Company to satisfy essential capital requirements. While the Company believes it could successfully complete alternative plans, if necessary, there can be no assurance that such alternatives would be available or that the Company would be successful in their implementation.
Cash Flows.Net cash provided by operating activities totaled $17.7 million for the three months ended March 31, 2005 compared to $11.5 million for the same period in 2004. The increase in cash provided by operating activities was primarily a result of increased net income. In addition, the Company deposited $4.5 million in the Title XI reserve fund with the U.S. Maritime Administration in March 2005 for its five double-hullJones Actproduct tankers. The corresponding amount in 2004 of $4.7 million was deposited in March 2004.
Net cash used in investing activities was $7.7 million for the three months ended March 31, 2005 compared to $70.4 million for the same period in 2004. The decrease in cash used in investing activities was due primarily to the purchase of the two foreign-flag product tankers in 2004 for approximately $62.0 million.
Net cash provided by financing activities for the three months ended March 31, 2005 was $2.3 million compared to $64.0 million for the same period in 2004. The decrease in cash provided by financing activities in 2005 is mainly attributable to additional financing related to the purchase of theSeabulk ReliantandSeabulk Trust, the Company’s two foreign-flag product tankers, which occurred in March 2004.
Effects of Inflation
The rate of inflation has not had a material impact on our operations. Moreover, if inflation remains at its recent levels, it is not expected to have a material impact on our operations for the foreseeable future.
27
Recent Accounting Pronouncements
In December 2004, the FASB issued SFAS No. 123R, which requires companies to expense in their consolidated statements of operations the estimated fair value of employee stock options and similar awards. The Company currently uses the intrinsic value method to value stock options, and accordingly, no compensation expense has been recognized for stock options since the Company grants stock options with exercise prices equal to or greater that the Company’s common stock market price on the date of the grant. The Company will adopt the provisions of SFAS No. 123R using the modified prospective application. Under the modified prospective application, SFAS No. 123R will apply to new awards and to awards that are outstanding on the effective date and are subsequently modified or cancelled. Compensation expense for unvested stock-based awards will be recognized over the remaining vesting period. Depending on the model used to calculate stock-based compensation expense in the future, the implementation of certain other requirements of SFAS No. 123R and additional option grants expected to be made in the future, the pro forma disclosure discussed previously may not be indicative of the stock-based compensation expense that will be recognized in the Company’s future consolidated financial statements. In April 2005, the FASB delayed the implementation of SFAS No. 123R from the next reporting period beginning after June 15, 2005 until the beginning of the Company’s next fiscal year. The Company is in the process of determining the impact adopting SFAS No. 123R will have on its consolidated financial position and consolidated results of operations.
In December 2004, the FASB issued SFAS No. 153, an amendment of APB No. 29. APB No. 129 is based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of assets exchanged; however, certain exceptions apply. SFAS No. 153 amends APB No. 29 to eliminate the exception for nonmonetary exchanges of similar productive assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS No. 153 is effective for nonmonetary exchanges occurring in fiscal periods beginning after June 15, 2005. The Company’s adoption of SFAS No. 153 is not expected to have a material impact on the Company’s consolidated financial position and consolidated results of operations.
Item 3. Quantitative and Qualitative Disclosures of Market Risk.
TheJones Actrestricts U.S. coastwise trade to vessels owned, operated and crewed substantially by U.S. citizens. TheJones Actcontinues to be in effect and supported by Congress and the Administration. However, it is possible that the Company’s advantage as a U.S. citizen operator ofJones Actvessels could be somewhat eroded over time as there continue to be periodic efforts and attempts by foreign interests to circumvent certain aspects of theJones Act.
On March 30, 2005, the U. S. District Court for the Northern District of California found that the Environmental Protection Agency (“EPA”) should not have exempted ballast water discharges in U. S. territorial waters from the rules under the National Pollutant Discharge Elimination System established under the U.S. Clean Water Act. The decision may affect the way product tankers and other vessels in the maritime transportation industry, including Seabulk Tankers, discharge ballast water from ships. This is an industry issue being reviewed by the EPA, the marine industry, environmental groups, and Congress. It is possible that final resolution of this issue will involve higher operating costs for the industry, including Seabulk Tankers.
28
Interest Rate Risk
26
2927
None.Securities and Use of Proceeds.
None.
None.
10.46 | Fourth Supplemental Credit Agreement dated June 10, 2005 among Seabulk International, Inc. and Fortis Capital Corp. (filed herewith). | ||
10.47 | Fourth Supplemental Subsidiary Guarantee Agreement dated June 10, 2005 among Seabulk International Inc. and Fortis Capital Corp. (filed herewith). | ||
10.48 | Fifth Supplemental Credit Agreement dated June 23, 2005 among Seabulk International, Inc., Seabulk Towing, Inc. and each of the four Additional Subsidiary Guarantors and Fortis Capital Corp. (filed herewith). | ||
10.49 | Fifth Supplemental Subsidiary Guarantee Agreement dated June 23, 2005 among Seabulk International Inc., Seabulk Towing, Inc. and each of the four Additional Subsidiary Guarantors and Fortis Capital Corp. (filed herewith). | ||
10.50 | Amendment No. 4 to Executive Employment Agreement by and between Seabulk International Inc. and Gerhard E. Kurz dated April 18, 2005 (filed herewith). | ||
10.51 | Amendment No. 5 to Executive Employment Agreement by and between Seabulk International Inc. and Gerhard E. Kurz dated June 28, 2005 (filed herewith). | ||
10.52 | Amendment No. 1 to Seabulk International Inc. Executive Deferred Compensation Plan dated April 18, 2005 (filed herewith). | ||
10.53 | Amendment No. 1 to Seabulk International Inc. Stock Option Plan for Directors dated April 18, 2005 (filed herewith). | ||
10.54 | Specimen of Amendment No. 2 to Non-Qualified Stock Option Agreement dated April 18, 2005 (filed herewith). | ||
10.55 | Amendment No. 1 to Seabulk International Inc. Amended and Restated Equity Ownership Plan dated April 18, 2005 (filed herewith). | ||
10.56 | Specimen of Amendment No. 2 to Severance Agreement dated April 18, 2005 (filed herewith). | ||
31.1 | Certification of Principal Executive Officer pursuant to Rule 13a-14(a) of the Securities and |
28
Exchange Act of 1934 (furnished herewith). | |||
31.2 | Certification of Principal Financial Officer pursuant to Rule 13a-14(a) of the Securities and Exchange Act of | ||
32.1 | Certification of Principal Executive Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the | ||
32.2 | Certification of Principal Financial Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the |
June 30, 2005:
1. | The Company filed a Current Report on Form 8-K dated | ||
2. | The Company filed a Current Report on Form | ||
3. | The Company filed a Current Report on Form 8-K dated |
30
The Company filed a Current Report on Form 8-K dated |
3129
SEABULK INTERNATIONAL, INC. | ||
3230