Trico Marine Services, Inc. (Nasdaq:TRMA) (the "Company" or
"Trico") today announced its financial results for the fourth
quarter of 2009 of revenues of $151 million and an operating loss
of $129 million, after a non-cash charge of approximately $120
million relating to impairments and the costs associated with the
early termination of a vessel contract. The previously announced
impairment related to the expected cancellation of 4 newbuild
contracts reduces the Company's capital expenditure obligations,
net of refund guarantees, by $100 million.
Summary Results and Recent Developments
Total revenues for the fourth quarter of 2009 were $150.8
million, compared to $189.9 million for the third quarter.
EBITDA for the fourth quarter was $3.5 million, compared to
$27.7 million in the third quarter. For additional
information regarding EBITDA as a non-GAAP financial measure,
please see footnote 1 on the accompanying EBITDA Reconciliation
table.
The primary reasons for the reduction in revenues and EBITDA
were lower utilization of vessels in the Subsea Services and Subsea
Protection and Trenching divisions, related to seasonality in the
North Sea and the weak market conditions in the North Sea and Asia
Pacific regions. Additionally, the Company had one
construction vessel undergoing a combined regulatory dry docking
and upgrade in vessel capability for 75 days prior to commencement
of a new one year contract in Mexico. The combined dry docking cost
and lost earnings associated with such downtime aggregated
approximately $5 million in the quarter. The decision to
terminate a time charter of a consistently under-utilized
survey vessel within DeepOcean's fleet and the decision to keep
vessels in certain emerging subsea markets for long-term contracts
commencing in 2010 rather than mobilize them for spot
contracts also contributed to low utilization during the fourth
quarter. However, the average day rates for subsea service spreads
remained relatively flat between the third and fourth quarters
2009.
The Company continued to reduce its exposure to the towing and
supply business, especially in the North Sea, by completing four
asset sales for total proceeds of approximately $40 million in the
fourth quarter at attractive EBITDA multiples. Since the end
of the fourth quarter through the date of this release, the Company
has reached definitive agreements for approximately $20 million in
additional sales of non-core assets. Our current view of the
worldwide OSV market is that prices and utilization in virtually
all markets will remain very weak with the anticipated level of
newly built vessels to be delivered in 2010 and 2011. In
addition, since September 30, 2009 through the date of this
release, the Company further reduced its remaining fleet of OSV's
from 45 to 37 vessels.
Beginning in the first quarter of 2008, several Norwegian ship
owning companies initiated legal proceedings against the Norwegian
government claiming that the claw-back rules under the newly
enacted tonnage tax regime represented a violation of the Norwegian
Constitution's ban on retroactive legislation. On February
12, 2010, the Norwegian Supreme Court ruled in favor of the ship
owners and came to the conclusion that the transitional rules,
where the untaxed profits under the old tonnage tax regime became
payable when entering into the new regime were
unconstitutional. As a result of the ruling, the Company
expects to recognize approximately $44 million in income in the
first quarter of 2010, including approximately $4 million of cash
savings that would have become due in 2010 and $8 million in cash
refunds related to prior year tax payments. Going forward, the $36
million of payments over the next eight years will no longer be
required.
Liquidity Outlook
At December 2009, the Company had $53 million in cash and $734
million in total debt. $53 million of our total debt is
classified as due and payable within twelve months compared to $240
million prior to the completion in the fourth quarter of a $400
million high yield bond offering. At December 2009, the
Company's cash and credit availability was $63
million. Committed capital expenditures are $38
million. The Company is currently pursuing a number of
transactions in order to increase its liquidity to levels
sufficient to meet its commitments, including, but not limited to,
additional sales of non-core OSV assets. Management of the
Company's capital structure and debt reduction remain the Company's
highest priorities.
Chairman and Chief Executive Officer, Joseph S. Compofelice,
commented, " In the fourth quarter, revenues and earnings reflected
the soft market conditions in the oilfield in general, especially
where we experienced continued weakness in the North Sea. While
both CTC Marine and Deep Ocean have made good progress winning work
outside the North Sea, I expect to see much more progress in all of
our markets in the last three quarters of 2010 and into 2011. We
are noticing an increase in tender offers and inquiries since the
beginning of the year in most international markets. Based on the
current and expected level of subsea completion awards and levels
of tendering activity for the Company, we are cautiously optimistic
about the future growth and profitability of our subsea
businesses."
Market Outlook
The operating results in the fourth quarter and early into the
first quarter 2010 continue to reflect weakness in the North Sea
and the Asia Pacific region, but we are encouraged by certain
recent developments which we anticipate will be reflected in our
results commencing in the second quarter of 2010. We
currently have approximately two-thirds of our 2010 expected
revenues under contract with promising prospects targeted for the
remainder of the year.
Our backlog is approximately $600 million of termed out or
long-term contracts spread principally across the Subsea Services
and Towing and Supply businesses. In the fourth quarter of
2009, approximately 82% of our revenues were generated through our
subsea businesses.
Conference Call Information
The Company will conduct a conference call at 8:30 a.m. ET on
Thursday, February 18, 2010, to discuss the results with analysts,
investors and other interested parties. Individuals who wish to
participate in the conference call should dial (800) 946-0719,
access code 4232854, in the United States or (719) 325-2492, access
code 4232854, from outside the country.
A telephonic replay of the conference call will be available
until March 4, 2010, starting approximately 1 hour after the
completion of the call, and can be accessed by dialing (888)
203-1112 access code 4232854 (international calls should use (719)
457-0820, access code 4232854).
About Trico
Trico Marine is an integrated provider of subsea, trenching and
marine support vessels and services. Trico Marine recently
increased its subsea market presence through its acquisition of
DeepOcean, a recognized market leader in the provision of high
quality subsea services including, IMR, survey and construction
support, subsea intervention and decommissioning, marine trenching
and the laying and burying of subsea cable. DeepOcean controls
a well equipped fleet of vessels and operates a fleet of modern
ROVs and trenching equipment. Trico Marine also continues to
provide a broad range of marine support services to the oil and gas
industry through use of its diversified fleet of vessels including
the transportation of drilling materials, supplies and crews to
drilling rigs and other offshore facilities; towing drilling rigs
and equipment, and support for the construction, installation,
repair and maintenance of offshore facilities. Trico
Marine is headquartered in The Woodlands, Texas and has a global
presence with operations in the North Sea, West Africa, Mexico,
Brazil and Southeast Asia.
For more information about Trico Marine Services, Inc. visit us
on the web at www.tricomarine.com.
The Trico Marine Services, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=5229
Certain statements in this press release that are not historical
fact may be "forward looking statements." Forward-looking
statements are projections of events, revenues, income, future
economic performance or management's plans and objectives for the
Company's future operations. Actual events may differ
materially from those projected in any forward-looking statement.
There are a number of important factors involving risks (known and
unknown) and uncertainties beyond the control of the Company that
could cause actual events to differ materially from those expressed
or implied by such forward-looking statements. These risks, by way
of example and not in limitation, include the Company's objectives,
business plans or strategies, and projected or anticipated benefits
or other consequences of such plans or strategies; the Company's
ability to obtain adequate financing on a timely basis and on
acceptable terms, including with respect to refinancing debt
maturing in the next twelve months; the Company's ability to
continue to service, and to comply with our obligations under, our
credit facilities and our other indebtedness; projections involving
revenues, operating results or cash provided from operations, or
the Company's anticipated capital expenditures or other capital
projects; overall demand for and pricing of the Company's vessels;
changes in the level of oil and natural gas exploration and
development; the Company's ability to successfully or timely
complete its various vessel construction projects; further
reductions in capital spending budgets by customers; further
decline in oil and natural gas prices; projected or anticipated
benefits from acquisitions; increases in operating costs; the
inability to accurately predict vessel utilization levels and day
rates; variations in global business and economic conditions; the
results, timing, outcome or effect of pending or potential
litigation and our intentions or expectations with respect thereto
and the availability of insurance coverage in connection therewith;
and the Company's ability to repatriate cash from foreign
operations if and when needed. A further description of risks
and uncertainties relating to Trico Marine Services, Inc. and its
industry and other factors, which could affect the Company's
results of operations or financial condition, are included in the
Company's Securities and Exchange Commission filings. Trico
undertakes no obligation to publicly update or revise any
forward-looking statements to reflect events or circumstances that
may arise after the date of this report. These results should
be considered preliminary until the Company files its Form 10-K
with the Securities and Exchange Commission.
TRICO MARINE SERVICES, INC. AND
SUBSIDIARIES
|
Consolidated Statements of Income
|
(Unaudited)
|
(In thousands, except per share amounts)
|
|
|
|
|
|
|
Three Months Ended
|
|
December 31, 2009
|
September 30, 2009
|
|
|
|
|
|
|
Revenues
|
$ 150,795
|
$ 189,855
|
|
|
|
Operating expenses:
|
|
|
Direct operating expenses
|
130,274
|
143,456
|
General and administrative
|
20,853
|
19,594
|
Depreciation and amortization
|
21,111
|
19,324
|
Impairments of acquired assets and penalities on early
termination
of contracts
|
122,060
|
1,184
|
(Gain) loss on sales of assets
|
(14,118)
|
768
|
Total operating expenses
|
280,180
|
184,326
|
|
|
|
Operating income (loss)
|
(129,385)
|
5,529
|
|
|
|
Interest expense, net of amounts capitalized
|
(18,974)
|
(8,587)
|
Interest income
|
823
|
181
|
Unrealized gain (loss) on mark-to-market of embedded
derivative
|
18,769
|
(21,026)
|
Foreign exchange gain (loss)
|
(9,720)
|
30,543
|
Other expense, net
|
748
|
(17)
|
|
|
|
Income before income taxes
|
(137,739)
|
6,623
|
|
|
|
Income tax expense (benefit)
|
20,389
|
(1,891)
|
|
|
|
Net income (loss)
|
(158,128)
|
8,514
|
|
|
|
Less: Net (income) loss attributable to the noncontrolling
interest
|
(102)
|
859
|
|
|
|
Net income (loss) attributable to Trico Marine Services,
Inc.
|
$ (158,230)
|
$ 9,373
|
|
|
|
Earnings per common share:
|
|
|
Basic
|
$ (7.68)
|
$ 0.46
|
Diluted
|
$ (7.68)
|
$ 0.27
|
|
|
|
Weighted average shares outstanding:
|
|
|
Basic
|
20,613
|
20,502
|
Diluted
|
20,613
|
35,179
|
|
|
|
|
|
|
Balance Sheet Data:
|
December 31, 2009
|
September 30, 2009
|
|
|
|
|
|
|
Cash and cash equivalents
|
$ 52,981
|
$ 41,733
|
Total assets
|
1,076,738
|
1,236,218
|
Total short-term debt
|
52,585
|
22,296
|
Total long-term debt (including derivative liability)
|
687,315
|
716,531
|
Total liabilities
|
961,553
|
976,760
|
Total equity
|
115,185
|
259,458
|
TRICO MARINE SERVICES, INC. AND
SUBSIDIARIES
|
Consolidating Statements of Income
|
(Unaudited)
|
(In thousands)
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2009
|
|
Towing and Supply
|
Subsea Services
|
Subsea
Trenching and Protection
|
Corporate & Eliminations
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$ 27,757
|
$ 70,982
|
$ 59,252
|
$ (7,196)
|
$ 150,795
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
Direct operating expenses
|
18,608
|
65,311
|
53,551
|
(7,196)
|
130,274
|
General and administrative
|
5,462
|
5,020
|
4,589
|
5,782
|
20,853
|
Depreciation and amortization
|
5,234
|
10,814
|
4,839
|
224
|
21,111
|
Impairments and penalities on early termination of contracts
|
1,222
|
118,838
|
2,000
|
--
|
122,060
|
(Gain) loss on sales of assets
|
(14,105)
|
--
|
(13)
|
--
|
(14,118)
|
Total operating expenses
|
16,421
|
199,983
|
64,966
|
(1,190)
|
280,180
|
|
|
|
|
|
|
Operating income (loss)
|
$ 11,336
|
$ (129,001)
|
$ (5,714)
|
$ (6,006)
|
$ (129,385)
|
|
|
|
|
|
|
EBITDA
|
$ 3,775
|
$ 651
|
$ 4,512
|
$ (5,468)
|
$ 3,470
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2009
|
|
Towing and Supply
|
Subsea Services
|
Subsea
Trenching and Protection
|
Corporate & Eliminations
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$ 31,414
|
$ 87,519
|
$ 79,693
|
$ (8,771)
|
$ 189,855
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
Direct operating expenses
|
24,960
|
63,128
|
64,139
|
(8,771)
|
143,456
|
General and administrative
|
4,874
|
4,008
|
4,660
|
6,052
|
19,594
|
Depreciation and amortization
|
4,769
|
9,682
|
4,795
|
78
|
19,324
|
Impairments and penalities on early termination of contracts
|
--
|
1,184
|
--
|
--
|
1,184
|
Gain on sales of assets
|
785
|
--
|
(17)
|
--
|
768
|
Total operating expenses
|
35,388
|
78,002
|
73,577
|
(2,641)
|
184,326
|
|
|
|
|
|
|
Operating income (loss)
|
$ (3,974)
|
$ 9,517
|
$ 6,116
|
$ (6,130)
|
$ 5,529
|
|
|
|
|
|
|
EBITDA
|
$ 1,693
|
$ 20,383
|
$ 10,894
|
$ (5,257)
|
$ 27,713
|
TRICO MARINE SERVICES, INC. AND
SUBSIDIARIES
|
Vessel Metrics
|
(Dollars in thousands, except utilization and number of
vessel amounts)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
December 31, 2009
|
September 30, 2009
|
June 30, 2009
|
Average Day Rates:
|
|
|
|
Subsea Services
|
|
|
|
MSVs (1)
|
$ 86,383
|
$ 86,772
|
$ 79,164
|
SPSVs/MPSVs (2)
|
30,367
|
26,995
|
27,638
|
|
|
|
|
Subsea Trenching and Protection
|
$ 137,144
|
$ 141,049
|
$ 127,991
|
|
|
|
|
Towing and Supply
|
|
|
|
North Sea Class (3)
|
$ 16,489
|
$ 17,796
|
$ 17,012
|
OSVs (4)
|
6,553
|
6,167
|
6,645
|
|
|
|
|
Utilization:
|
|
|
|
Subsea Services
|
|
|
|
MSVs
|
69%
|
91%
|
92%
|
SPSVs/MPSVs
|
80%
|
71%
|
80%
|
|
|
|
|
Subsea Trenching and Protection
|
83%
|
97%
|
98%
|
|
|
|
|
Towing and Supply
|
|
|
|
North Sea Class
|
81%
|
83%
|
76%
|
OSVs
|
75%
|
61%
|
66%
|
|
|
|
|
Average Number of Vessels:
|
|
|
|
Subsea Services
|
|
|
|
MSVs
|
9.7
|
10.0
|
9.7
|
SPSVs/MPSVs
|
7.0
|
7.5
|
7.0
|
|
|
|
|
Subsea Trenching and Protection
|
4.1
|
4.4
|
4.8
|
|
|
|
|
Towing and Supply
|
|
|
|
North Sea Class
|
10.1
|
12.0
|
12.3
|
OSVs
|
23.5
|
33.0
|
37.4
|
|
|
|
|
______________________
|
|
|
|
(1) Multi-purpose service vessels
|
(2) Subsea platform supply vessels/Multi-purpose platform
supply vessels
|
(3) Anchor handling, towing and supply vessels and platform
supply vessels
|
(4) Offshore supply vessels
|
TRICO MARINE SERVICES, INC. AND
SUBSIDIARIES
|
EBITDA Reconciliation
|
(Unaudited)
|
(In thousands)
|
|
|
|
Three months ended
|
|
December 31,
2009
|
September 30,
2009
|
|
|
|
EBITDA (1)
|
$ 3,470
|
$ 27,713
|
Depreciation and amortization
|
(21,111)
|
(19,324)
|
Impairments of acquired assets and penalties on
early termination of contracts
|
(122,060)
|
(1,184)
|
(Gain) loss on sale of assets
|
14,118
|
(768)
|
Stock-based compensation
|
(314)
|
(795)
|
Provision for doubtful accounts
|
(3,488)
|
(113)
|
Operating income (loss)
|
$ (129,385)
|
$ 5,529
|
|
|
|
|
|
|
(1) Non-GAAP Financial Measure
|
|
|
|
|
|
The Company discloses and discusses EBITDA as a non-GAAP
Financial measure in its public releases, including quarterly
earnings releases, investor conference calls, and other filings
with the Commission. The Company defines EBITDA as operating income
before depreciation and amortization, impairments of acquired
assets and penalties on early termination of contracts, gain/loss
on sale of assets, stock-based compensation and provision for
doubtful accounts in respect of revenues earned in prior
periods. In fourth quarter of 2009, $2.2 million was provided
in respect of revenues earned in prior periods. The Company's
measure of EBITDA may not be comparable to similarly titled
measures presented by other companies. Other companies may
calculate EBITDA differently than the Company, which may limit its
usefulness as a comparative measure.
|
|
|
|
EBITDA is a financial metric used by management (i) to monitor
and evaluate the performance of Trico's business operations, (ii)
to facilitate management's internal comparison of the Company's
historical operating performance of its business operations, (iii)
to facilitate management's external comparisons of the results of
its overall business to the historical operating performance of its
competitors, (iv) to analyze and evaluate financial and strategic
planning decisions regarding future operating investments and
acquisitions, which may be more easily evaluated in terms of
EBITDA, and (v) to plan and evaluate future operating budgets and
determine appropriate levels of operating investments.
|
CONTACT: Trico Marine Services, Inc.
Geoff Jones, Senior Vice President, Chief Financial and
Administrative Officer
(713) 780-9926
Trico Marine Services (NASDAQ:TRMA)
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