Seacor Holdings Posts Q1 Loss of $1.10/Share

SEACOR Holdings Inc.today announced its results for its first quarter ended March 31, 2015, wherein the company experienced losses during this period. The net loss attributable to SEACOR Holdings Inc. was $19.6 million, or $1.10 per diluted share.

For the preceding quarter ended December 31, 2014, net income attributable to SEACOR Holdings Inc. (CKH) was $40.1 million, or $1.85 per diluted share. A comparison of results for the quarter ended March 31, 2015 with the preceding quarter ended December 31, 2014 is included in the "Highlights for the Quarter" discussion below.

For the quarter ended March 31, 2014, net income attributable to SEACOR Holdings Inc. was $11.5 million, or $0.56 per diluted share.

Highlights for the Quarter

Offshore Marine Services - Operating loss was $16.5 million on operating revenues of $93.5 million in the first quarter compared with operating income of $22.2 million on operating revenues of $127.5 million in the preceding quarter.

The operating loss in the first quarter includes a $6.6 million impairment charge related to the suspended construction of two offshore support vessels. During the preceding quarter, the Company sold and leased back two offshore support vessels and sold other equipment for net proceeds of $63.2 million and gains of $9.5 million, of which $0.1 million was recognized currently and $9.4 million was deferred. In addition, the Company recognized previously deferred gains of $12.0 million during the preceding quarter.

Offshore market conditions continued to deteriorate during the first quarter. Day rates and utilization of the Company's offshore support vessel fleet have been subjected to downward pressure as offshore drilling and associated activity has declined in response to lower oil prices and as newly built offshore support vessels have been delivered to the industry-wide fleet. In response, the Company has returned ten leased-in vessels to their owners beginning in the third quarter of 2014 and had nine cold-stacked vessels as of March 31, 2015. On a total fleet basis, the total number of days available for charter for the Company's fleet, excluding wind farm utility vessels, decreased by 564, or 6%, primarily due to returning the leased-in vessels to their owners. Overall utilization, excluding wind farm utility vessels, decreased from 75% to 68% and overall average day rates, excluding wind farm utility vessels, decreased by 15% from $15,520 to $13,178 per day. This release includes a table presenting time charter operating data by vessel class.

In the U.S. Gulf of Mexico, operating results excluding the impact of gains (losses) on asset dispositions and impairments were $14.4 million lower in the first quarter. Operating revenues were $17.7 million lower and impacted all vessel classes. The reduction was primarily due to weak market conditions, the return of leased-in vessels to their owners, the seasonal downturn for the liftboat fleet, and increased drydocking activity. Overall utilization was 49% compared with 62% in the preceding quarter, and overall average day rates decreased from $20,313 to $18,097 per day. Operating expenses were $2.0 million lower primarily due to the reduced fleet size and the increase in the number of cold-stacked vessels, partially offset by higher drydocking expenses. General and administrative expenses were $0.8 million lower primarily due to a reduction in wage and benefit costs from lower bonus accruals and following personnel reductions during the preceding quarter. As of March 31, 2015, the Company had seven vessels cold-stacked in the U.S Gulf of Mexico compared with one vessel as of December 31, 2014.

In international regions, operating income excluding the impact of gains on asset dispositions was $5.5 million lower in the first quarter. Operating revenues were $16.3 million lower primarily due to the conclusion of several charters. Excluding windfarm utility vessels, overall utilization was 78% compared with 82% in the preceding quarter, and overall average day rates decreased from $13,350 to $11,510 per day. Operating expenses were $10.2 million lower primarily due to the repositioning of two vessels to the U.S. Gulf of Mexico, the seasonal conclusion of a charter for a vessel operating in Russia, and reduced drydocking and routine repair and maintenance expenses. General and administrative expenses were $0.9 million lower primarily due to a reduction in wage and benefit costs from lower bonus accruals. As of March 31, 2015, the Company had two vessels cold-stacked in international regions compared with none as of December 31, 2014.

Inland River Services - Operating income was $6.1 million on operating revenues of $56.6 million in the first quarter compared with operating income of $23.7 million on operating revenues of $79.3 million in the preceding quarter.

Operating income was $17.5 million lower in the first quarter primarily due to an $18.2 million reduction in the results of the dry-cargo barge pools as a consequence of lower rates, reduced activity levels following the seasonal harvest and poor operating conditions due to harsh weather in the Midwest during the first quarter.

Foreign currency losses, net of $1.1 million in the first quarter were primarily due to the strengthening of the U.S. dollar versus the Colombian peso.

Equity in earnings of 50% or less owned companies of $10.5 million during the preceding quarter was primarily due to the receipt of a termination payment following a customer's cancellation of four long-term time charter contracts in the Company's joint venture operating on the Parana-Paraguay River Waterway.

Shipping Services - Operating income was $1.3 million on operating revenues of $51.4 million in the first quarter compared with operating income of $14.1 million on operating revenues of $56.7 million in the preceding quarter.

Operating income was $12.8 million lower in the first quarter primarily due to drydocking two of the Company's U.S.-flag product tankers. The drydockings reduced operating revenues by $4.3 million as a consequence of 71 days of out-of-service time and increased operating expenses by $8.1 million. One of the product tankers returned to service during the first quarter and the other is scheduled to return to service in late April 2015.

Equity in earnings from 50% or less owned companies increased by $1.9 million primarily due to improved operating results from the Company's joint venture in the Puerto Rico liner trade and the commencement of a charter for its crude tanker joint venture.

Illinois Corn Processing - Segment profit was $4.1 million on operating revenues of $39.6 million in the first quarter compared with $9.5 million of segment profit on operating revenues of $51.0 million in the preceding quarter. The reductions were primarily due to lower sales volumes as a result of reduced production during unplanned plant maintenance and lower sales prices of alcohol.

Other - Segment loss was $1.8 million in the first quarter compared with a segment loss of $6.3 million in the preceding quarter. The segment loss in the preceding quarter was primarily due to an impairment charge in respect of one of the Company's 50% or less owned companies, restructuring costs and reduced activity levels for emergency and crisis services, and costs incurred to develop new service products.

Marketable Securities - Marketable security losses, net of $9.1 million in the first quarter are primarily due to losses on long marketable security positions.

Share Repurchases - During the quarter ended March 31, 2015, the Company purchased 74,213 shares of its common stock for an aggregate purchase price of $5.2 million.

Capital Commitments - As of March 31, 2015, the Company's unfunded capital commitments were $459.4 million and included: $153.7 million for 16 offshore support vessels; $1.7 million for two 30,000 barrel inland river liquid tank barges; $11.0 million for eight 10,000 barrel inland river liquid tank barges; $2.7 million for three inland river towboats; $216.9 million for three U.S.-flag product tankers; $56.2 million for one U.S.-flag articulated tug-barge; and $17.2 million for other equipment and improvements. These commitments are payable as follows: $199.1 million is payable during the remainder of 2015; $217.3 million is payable during 2016; $37.6 million is payable during 2017; and $5.4 million is payable during 2018. This release includes a table detailing expected delivery by vessel class.

Liquidity and Debt - As of March 31, 2015, the Company's balances of cash, cash equivalents, restricted cash, marketable securities, construction reserve funds and Title XI reserve funds totaled $792.4 million and its total outstanding long-term debt was $879.6 million. Subsequent to March 31, 2015, certain subsidiaries of the Company that operate its fleet of U.S.-flag product tankers (collectively "SEA-Vista") secured a $300 million credit facility with a syndicate of lenders to fund its working capital needs, meet its capital commitments for the three U.S.-flag product tankers (referred to above under "Capital Commitments"), repay its outstanding Title XI financing and fund future growth opportunities.