Seacor reports first quarter results

Seacor Holdings Inc. announced results for the first quarter ended March 31, 2012 that included net income $36.5 million, or $1.75 per diluted share, including net income from discontinued operations of $19.4 million, or $0.93 per diluted share. During the first quarter, the company disposed of part of its Environmental Services business segment for a net sales price of $99.9 million.

For the preceding quarter ended December 31, 2011, net income attributable to Seacor Holdings Inc. was $17.0 million, or $0.80 per diluted share, including net income from discontinued operations of $9.7 million, or $0.45 per diluted share.

For the quarter ended March 31, 2011, net income attributable to Seacor Holdings Inc. was $11.2 million, or $0.52 per diluted share, including a net loss from discontinued operations of $1.2 million, or $0.06 per diluted share.

Highlights for the Quarter

Offshore Marine Services — Operating income was $22.9 million on operating revenues of $121.1 million compared with operating income of $16.1 million on operating revenues of $109.8 million in the preceding quarter. First quarter results included $1.8 million in gains on asset dispositions compared with $1.4 million in gains in the preceding quarter. First quarter results also included the contribution of the company’s fleet of wind farm utility vessels acquired in December 2011. During the first quarter, these vessels contributed operating revenues of $6.0 million with an average day rate of $2,431 per day and a utilization rate of 86.0 percent.

In the first quarter, excluding the contribution of wind farm utility vessels, the total number of days available for charter decreased by 259 days, or 2.5 percent; utilization increased from 79.7 percent to 80.6 percent; and average day rates increased by 8.1 percent from $12,187 per day to $13,174 per day.

In the U.S. Gulf of Mexico, operating income was $8.4 million higher in the first quarter primarily due to an increase in revenues from rig moving activity. Utilization was 73.1 percent compared with 70.3 percent in the preceding quarter and average day rates increased from $12,523 per day to $14,964 per day. As of March 31, 2012, the company had four vessels cold-stacked in the U.S. Gulf of Mexico, the same as of December 31, 2011.

In international regions, excluding the wind farm utility vessels, operating income was $1.8 million lower in the first quarter. Time charter revenues were $0.6 million lower primarily due to fewer days available and a decrease in utilization, which was 85.6 percent compared with 86.2 percent in the preceding quarter. Average day rates increased from $11,999 per day to $12,149 per day. Other revenues were $1.8 million lower primarily due a decrease in mobilization and other marine services. Operating expenses were $1.2 million higher primarily due to increased drydocking activity.

Administrative and general expenses were $1.8 million lower in the first quarter primarily due to lower wage and benefit costs and a reduction in legal expenses.

Equity in earnings increased by $2.3 million in the first quarter primarily due to the commencement of a long-term charter for a vessel in one of Offshore Marine Services’ joint ventures in November 2011.

Aviation Services — Operating income was $3.8 million on operating revenues of $61.1 million compared with operating income of $1.5 million on operating revenues of $61.7 million in the preceding quarter. During the first quarter, Aviation Services deferred $2.8 million of contract-leasing revenues from its Brazilian joint venture and recognized an impairment charge of $5.9 million, net of tax, on its investment. These adjustments resulted from difficulties experienced by the joint venture following one of its customers’ cancellation of certain contracts for a number of AW139 aircraft under contract-lease from Aviation Services.

In the U.S. Gulf of Mexico, operating revenues were $3.2 million higher primarily due to contracts for newly delivered aircraft, an increase in activity with existing customers and additional charter activity. This increase was offset by $1.1 million of revenue reductions in Alaska following the conclusion of seasonal firefighting contracts and the temporary postponement of a contract that is scheduled to resume later in 2012.

Operating expenses were $1.4 million lower in the first quarter primarily due to the recognition of vendor credits, partially offset by higher insurance premiums due to the addition of new aircraft, increased activity and additional maintenance expense due to the timing of repairs.

Administrative and general expenses were $2.1 million lower in the first quarter primarily due to severance costs associated with a change in executive management in the preceding quarter, partially offset by the recognition in the first quarter of previously deferred legal and professional expenses.

Inland River Services — Operating income was $9.2 million on operating revenues of $53.5 million compared with operating income of $12.3 million on operating revenues of $51.9 million in the preceding quarter. Results for the first quarter included the contribution of Lewis & Clark, acquired in December 2011, which contributed operating revenues of $8.5 million. Operating results for the pooled hopper barge fleet were lower in the first quarter primarily due to poor river conditions and weak demand for barge freight resulting in idling a portion of the fleet.

Marine Transportation Services — Operating income was $2.4 million on operating revenues of $26.3 million compared with operating income of $3.7 million on operating revenues of $26.7 million in the preceding quarter. Fourth quarter results included $1.1 million in gains on asset dispositions following the sale of the Seabulk America. Operating results for Marine Transportation Services’ U.S.-flag product tanker fleet were lower primarily due to increases in insurance deductibles and higher repair and maintenance costs. Operating results for its foreign flag Roll-on/Roll-off vessels were higher primarily due to reduced legal fees.

Emergency and Crisis Services — As noted above, the company sold part of its Environmental Services business segment in March 2012. The remaining business within the segment, renamed Emergency and Crisis Services, reported an operating loss of $0.4 million on operating revenues of $10.2 million compared with operating income of $3.1 million on operating revenues of $16.8 million in the preceding quarter. The reduction in operating income was primarily due to a reduction in debris activity, continuing reduction in activity associated with the Deepwater Horizon incident and seasonal reductions in professional services.

Commodity Trading and Logistics — Segment profit was $5.6 million on operating revenues of $209.7 million compared with segment profit of $1.4 million on operating revenues of $237.2 million in the preceding quarter. Segment results improved primarily due to the recognition of a gain of $6.0 million, net of tax, arising from company’s acquisition of a controlling interest in its alcohol manufacturing joint venture. Results from this joint venture were consolidated effective February 1, 2012.

Other — Other, primarily Harbor and Offshore Towing Services, reported operating income of $3.2 million on operating revenues of $19.9 million compared with operating income of $1.7 million on operating revenues of $17.7 million in the preceding quarter. The increase in operating income was primarily due to increased traffic and the addition of bareboat charter revenues for one tug contracted to a third party in Port Arthur, a decrease in charter-in expenses at the company’s terminal operation in St. Eustatius, and lower wage and benefit costs and professional fees.

Corporate and Eliminations — Administrative and general expenses were $9.0 million compared with $10.5 million in the preceding quarter. The decrease was primarily due to lower management bonus accruals and reduced professional fees.

Capital Commitments — The company’s unfunded capital commitments as of March 31, 2012 consisted primarily of offshore support vessels, helicopters, inland river tank barges, harbor tugs, an interest in a river grain terminal, an interest in a dry-bulk articulated tug-barge and other property and equipment. These commitments totaled $343.0 million, of which $157.7 million is payable during 2012 with the balance payable through 2016. Of the total unfunded capital commitments, $44.9 million may be terminated without further liability other than the payment of liquidated damages of $1.4 million. As of March 31, 2012, the company held balances of cash, cash equivalents, restricted cash, marketable securities, construction reserve funds and title XI reserve funds totaling $636.4 million.

MORE

April 25, 2012