HOUSTON, Nov. 5, 2008 (GLOBE NEWSWIRE) -- Trico Marine Services, Inc. (Nasdaq:TRMA) (the "Company" or "Trico") today announced its financial results for the third quarter of 2008, reporting net income of $31.0 million on revenues of $214.8 million, or $1.86 per diluted share. Without the effect of a non-cash gain totaling $18.4 million, net of taxes, or $1.11 per diluted share, related to the accounting treatment for the derivative component of the Company's 6.5% convertible senior notes, adjusted net income, a non-GAAP measure, would have been $12.6 million, or $0.75 per diluted share, for the third quarter of 2008 (see reconciliation of adjusted non-GAAP net income in the attached table).
Summary Results
Total revenues and operating income for the third quarter of 2008 were $214.8 million and $19.2 million, respectively, more than double the second quarter of 2008 primarily resulting from a full quarter of operations from DeepOcean and CTC Marine, which were acquired in the second quarter of 2008. Also contributing to the improvement in revenues and operating income over the second quarter were increased rates and utilization for all classes of towing and supply vessels.
"This is the first full quarter that includes the acquisitions of DeepOcean and CTC Marine. Earnings per share exceeded expectations despite the strengthening of the dollar against European currencies. The results for our trenching and towing and supply divisions each improved over the second quarter," commented Chairman, President and Chief Executive Officer, Joe Compofelice. "The subsea and trenching businesses substantially changed the makeup and future prospects for Trico Marine.
"At the end of the third quarter, we had approximately $1.0 billion of termed out, long term contracts spread principally across the subsea and towing and supply businesses. With this backlog of contracts, as well as 75% of our business being with major or national oil companies and 95% of our business in international deep waters, I feel we are in a very good operational position in a changing energy landscape. However, we are very aware of the lack of clarity regarding the oil price outlook and the macro economic environment and we will revisit our plans for 2009 as necessary."
In the Company's subsea services division, principally DeepOcean, operating results were slightly below the Company's expectations due to a late vessel delivery for a contract with Petrobras, which commenced operations in November 2008 and also as a result of downtime on a second quarter newbuild for equipment modifications. DeepOcean had a new vessel delivered in August 2008, the Edda Flora, which immediately commenced a three year contract with Statoil. Additionally, the Company won a two year subsea vessel contract for a multi-purpose platform supply vessel, under construction in India, which will be delivered later this quarter. The day rate on this contract is significantly higher than was expected when the Company acquired it as part of Active Subsea in 2007. The Company also completed a decommissioning contract in the North Sea in the third quarter which included a package of both CTC Marine and DeepOcean services.
In the Company's trenching division, principally CTC Marine, results met Company expectations including completion during the quarter of previously deferred projects. During the third quarter, CTC was also awarded a new frame agreement with Statoil, furthering opportunities to market subsea and trenching services as a package. The trenching division experienced 100% utilization in the third quarter with projects including cable lay and burial work in China and increased services to telecommunications providers, Alcatel and Tyco.
For the towing and supply division, day rates and utilization improved across all vessel classes in the third quarter 2008 compared to the second quarter, but were especially strong for North Sea class vessels and for vessels operating in the Gulf of Mexico. During the quarter, both dry docking costs and operating costs were in line with Company expectations. In the two most recent quarters, the towing and supply division has renewed five long term contracts in international markets with an average day rate increase of over 30%. These new day rates will become effective principally in the first quarter of 2009. Day rates showed further improvement, on a local currency basis, during October.
During the third quarter of 2008, the Company took delivery of two newbuild vessels, the Edda Flora referenced above and one new SPSV, the Mystic. The Mystic will start work on a two year contract in Mexico in 2009; at present the vessel is currently 100% utilized in the Gulf of Mexico.
In the fourth quarter of 2008, the Company will take delivery of two additional newbuilds: one SPSV, the Moon, which has a two year contract in Mexico; and the first delivery of eight multi-purpose subsea service vessels acquired as part of Active Subsea.
Operating income in the third quarter was negatively affected by the strengthening of the US dollar against the Norwegian Kroner, Euro and British Pound as well as severance costs associated with the acquisitions consummated in the second quarter 2008, which amount in the aggregate totaled approximately $3 million.
At the end of the quarter, the Company had $95 million in cash and $763 million in net debt. During the third quarter of 2008, the Company spent $76 million to complete the purchase of DeepOcean and $40 million to retire certain DeepOcean debt.
The Company's current cash and credit availability to fund capital expenditures is $330 million. Committed capital expenditures through the end of 2010 are $240 million.
Conference Call Information
The Company will conduct a conference call at 8:30 a.m. EST on Thursday, November 6, 2008, to discuss the results with analysts, investors and other interested parties. Individuals who wish to participate in the conference call should dial (877) 856-1965, access code 7142803, in the United States or (719) 325-4749, access code 7142803, from outside the country.
A telephonic replay of the conference call will be available until November 20, 2008, starting approximately 1 hour after the completion of the call, and can be accessed by dialing (888) 203-1112 access code 7142803 (international calls should use (719) 457-0820, access code 7142803).
About Trico
The Trico Group is an integrated provider of subsea, trenching and marine support vessels and services. Trico's towing and supply division provides 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's subsea services and trenching divisions control a well equipped fleet of vessels and operate a fleet of modern ROVs and trenching equipment. The Trico Group is headquartered in Houston, Texas and has a global presence with operations in the North Sea, West Africa, Mexico, Brazil and Southeast Asia as well as the Gulf of Mexico.
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.primenewswire.com/newsroom/prs/?pkgid=5229
Certain statements in this press release that are not historical fact may be "forward looking statements." Actual events may differ materially from those projected in any forward-looking statement. There are a number of important factors involving risks 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. A 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.
The following table sets forth the Company's net income (loss) for the second and third quarters of 2008, excluding the effect of the net gain discussed above for the third quarter of 2008 and the charge discussed in the table below for the second quarter of 2008, and provides a reconciliation of adjusted net income to net income (loss) recorded under U.S. GAAP:
Three Months Ended
----------------------------------------
September 30, 2008 June 30, 2008
------------------ ------------------
Diluted Diluted
earnings earnings
(loss) per (loss) per
Results share Results share
------- ------- ------- -------
Net income (loss),
as reported $30,970 $ 1.86 $(3,005) $ (0.20)
Adjustments:
Impact of financial
derivatives (29,449) (1.77) 5,877 (a) 0.40
Tax effect 11,043 0.66 (1,879) (0.13)
------- ------- ------- -------
Non-GAAP adjusted
net income $12,564 $ 0.75 $ 993 $ 0.07
======= ======= ======= =======
-----------------
(a) The second quarter net loss and loss per share included pre-tax
non-cash charges totaling $5.9 million as a result of accounting
for the derivative component of the 6.5% convertible senior
notes and a foreign currency swap instrument.
The following table reconciles Adjusted EBITDA to operating income:
Three Months Three Months
Ended Ended
Sept. 30, June 30,
2008 2008
------- -------
Adjusted EBITDA $41,518 $19,952
Amortization of non-cash deferred revenues 93 97
Gain (loss) on sale of assets (10) (91)
Stock-based compensation (735) (1,543)
Depreciation and amortization (21,673) (12,895)
------- -------
Operating income $19,193 $ 5,520
------- -------
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)
(Dollars in thousands, except per share amounts)
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
Sept. 30, June 30, Sept. 30, Sept. 30,
2008 2008 2008 2007
-------- -------- -------- --------
Revenues $214,793 $104,292 $378,260 $191,125
Operating expenses:
Direct operating
expenses 155,113 70,846 258,952 97,751
General and
administrative 18,804 14,940 44,511 30,059
Depreciation and
amortization expense 21,673 12,895 41,315 17,789
(Gain) loss on sales
of assets 10 91 (2,736) (2,858)
-------- -------- -------- --------
Total operating
expenses 195,600 98,772 342,042 142,741
Operating income 19,193 5,520 36,218 48,384
Interest income 2,529 3,271 7,378 (3,036)
Interest expense, net
of amounts capitalized (11,694) (6,176) (18,093) (3,493)
Foreign exchange gain
(loss) (25) 309 1,548 10,827
Change in fair value of
embedded derivative 31,515 (2,310) 29,205 --
Other expense, net (25) (2,937) (3,063) (365)
-------- -------- -------- --------
Income before income
taxes and
noncontrolling interest
of consolidated
subsidiary 41,493 (2,323) 53,193 52,317
Income tax expense
(benefit) 7,670 (859) 9,095 22,322
-------- -------- -------- --------
Income before
noncontrolling interest
of consolidated
subsidiary 33,823 (1,464) 44,098 29,995
Noncontrolling interest
of consolidated
subsidiary (2,853) 1,541 (5,235) 2,200
-------- -------- -------- --------
Net income (loss) $ 30,970 $ (3,005) $ 38,863 $ 32,195
======== ======== ======== ========
Earnings (Loss) per
Common Share:
Basic $ 2.09 $ (0.20) $ 2.65 $ 2.19
======== ======== ======== ========
Diluted $ 1.86 $ (0.20) $ 2.45 $ 2.10
======== ======== ======== ========
Weighted Average
Shares Outstanding:
Basic 14,827 14,815 14,684 14,719
======== ======== ======== ========
Diluted 16,680 14,815 15,865 15,347
======== ======== ======== ========
Cash Flow Data
(Unaudited):
Cash provided by
operating activities $ 26,643 $ 38,502 $ 70,753 $ 70,329
Cash used in
investing activities (94,138) (449,428) (566,674) (53,157)
Cash provided by
financing activities 11,953 433,638 469,219 130,773
Capital expenditures
(a) 15,914 29,666 77,472 18,573
Balance Sheet Data: Sept. 30, Dec. 31,
2008 2007
---------- ----------
(Unaudited)
Cash and cash
equivalents $ 95,468 $ 131,463
Total assets 1,538,862 681,744
Total short-term
debt 80,772 3,258
Total long-term
debt (including
derivative
liability) 777,885 157,287
Total liabilities 1,107,481 278,644
Stockholders'
equity 414,086 390,222
(a) Capital expenditures for property, plant and equipment, included
within investing activities, excludes acquisition of businesses.
Trico Marine Services, Inc.
Consolidating Statements of Income
(Unaudited)
(Dollars in thousands)
Three Months Ended September 30, 2008
------------------------------------------------
Corporate
Towing &
and Subsea Elimina-
Supply Services Trenching tions Total
-------- -------- -------- -------- --------
Revenues $ 58,989 $105,276 $ 59,550 $ (9,022) $214,793
Operating expenses:
Direct operating
expenses 31,530 87,633 44,972 (9,022) 155,113
General and
administrative 6,223 3,740 2,679 6,162 18,804
Depreciation and
amortization 5,825 9,787 6,013 48 21,673
Loss on sale of
assets 10 -- -- -- 10
-------- -------- -------- -------- --------
Total operating
expenses 43,588 101,160 53,664 (2,812) 195,600
-------- -------- -------- -------- --------
Operating income
(loss) $ 15,401 $ 4,116 $ 5,886 $ (6,210) $ 19,193
======== ======== ======== ======== ========
Three Months Ended June 30, 2008
------------------------------------------------
Corporate
Towing &
and Subsea Elimina-
Supply Services Trenching tions Total
-------- -------- -------- -------- --------
Revenues $ 47,605 $ 41,223 $ 15,464 $ -- $104,292
Operating expenses:
Direct operating
expenses 27,542 30,034 13,270 -- 70,846
General and
administrative 4,946 1,349 2,269 6,376 14,940
Depreciation and
amortization 5,917 4,502 2,427 49 12,895
Loss on sale of
assets 91 -- -- -- 91
-------- -------- -------- -------- --------
Total operating
expenses 38,496 35,885 17,966 6,425 98,772
-------- -------- -------- -------- --------
Operating income
(loss) $ 9,109 $ 5,338 $ (2,502) $ (6,425) $ 5,520
======== ======== ======== ======== ========
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
Vessel Metrics
(Unaudited)
Three Months Ended
Month of ----------------------------------
October Sept. 30, June 30, March 31,
2008 2008 2008 2008
-------- -------- -------- --------
Average Day Rates:
Towing and Supply
AHTSs (1) $ 34,432 $ 37,476 $ 32,983 $ 39,373
PSVs (2) 19,958 18,991 17,486 17,959
OSVs (3) 8,530 7,856 7,252 7,163
Subsea
SPSVs (4) $ 24,433 $ 22,422 $ 21,941 $ 18,709
MSVs (5) 69,988 84,973 88,384 (6) 64,411 (6)
Trenching $155,055 $163,254 $177,165 (6) $167,902 (6)
Utilization:
Towing and Supply
AHTSs (1) 96% 97% 78% 87%
PSVs (2) 95% 96% 92% 91%
OSVs (3) 88% 87% 82% 77%
Subsea
SPSVs (4) 85% 78% 77% 94%
MSVs (5) 80% 80% 81%(6) 78%(6)
Trenching 88% 100% 90%(6) 84%(6)
Average Number of
Vessels:
Towing and Supply
AHTSs (1) 6.0 6.0 6.0 6.0
PSVs (2) 7.0 7.0 7.0 7.0
OSVs (3) 38.0 38.0 38.0 38.2
Subsea
SPSVs (4) 6.0 5.4 5.0 5.0
MSVs (5) 9.0 9.4 9.0 (6) 9.3 (6)
Trenching 4.2 3.7 3.0 (6) 2.7 (6)
----------------------
(1) Anchor handling, towing and supply vessels
(2) Platform supply vessels
(3) Offshore supply vessels
(4) Subsea platform supply vessels
(5) Multi-purpose service vessels
(6) Note that Subsea MSV and Trenching metrics include activity
related to DeepOcean and CTC Marine prior to the acquisition
date. This data has been provided for informational purposes
only.