Seabulk International Reports 2Q Results

Friday, August 09, 2002
Seabulk International, Inc. has reported a net loss of $4.4 million or $0.41 per diluted share for the quarter ended June 30, 2002. In the year-earlier period, the company had net income of $2.7 million or $0.25 per diluted share. Revenues of $81.6 million in the current quarter were down 11 percent from $91.4 million a year ago, due primarily to reduced demand and lower day rates for the company's offshore vessels in the important Gulf of Mexico market. Operating income of $8.5 million was down from $18.9 million earned in the second quarter of 2001. The Company also announced that it would revise both its first quarter 2002 and its December 2001 financial results to reflect the retroactive accrual of insurance expenses related to supplemental marine insurance calls assessed in December 2001 and the effect on 2002 insurance premiums. The calls, which the Company disputes and had previously disclosed in its Form 10-K for 2001 and Form 10-Q for the first quarter of 2002, are intended to cover investment losses and reserve shortfalls sustained by the company's marine insurance underwriter, the Steamship Mutual Club. The insurance amounts are scheduled for payment in installments through 2003. The revisions will add approximately $4.1 million to the Company's reported loss for both the three months and twelve months ended December 31, 2001 and approximately $200,000 for the three months ended March 31, 2002. Revenues from Seabulk Offshore, which operates a fleet of 133 offshore energy support vessels, totaled $44.1 million in the quarter, up marginally from the first quarter of 2002 but down 13 percent from the year-earlier period, and accounted for 54 percent of total company revenues. Supply boat day rates in the weak Gulf of Mexico market averaged $6,005 in the quarter versus $7,397 a year ago, while utilization fell to 63 percent from 90 percent in the year-earlier quarter. Supply boat day rates for the Company's West African fleet, on the other hand, averaged $8,042 in the quarter, up from $6,988 in the year-earlier period and $7,368 in the first quarter of 2002, while utilization remained strong at 85 percent. The West African market is expected to remain robust for the remainder of 2002, and the company has increased its presence there from 37 vessels a year ago to 42 today. Revenue from Seabulk Tankers, the company's domestic marine transportation business, totaled $29.7 million or 36 percent of total company revenues versus $32.3 million in the second quarter of 2001. The revenue decline is primarily attributable to the sale of the company's Sun State Marine Services subsidiary. Operating income of $7.3 million was up 12 percent from the year-earlier quarter as a result of higher average charter rates for the company's fleet of 10 U.S.-flag, Jones Act tankers, which includes five modern double-hull vessels. The company currently has five tankers operating under time charters of one to three years and a sixth tanker on a ten-year bareboat charter. A seventh tanker, which has been trading in the spot market, will commence a three-year time charter this month with a major oil company. All ten of the company's product tankers are now fully employed under time charters or contracts of affreightment. Seabulk Towing, which operates a fleet of 31 tugs in seven southeastern ports and the offshore Gulf of Mexico, had revenues of $7.9 million in the quarter or 10% of total company revenues versus $8.6 million in the year-earlier period. Operating income of $1.2 million was down from $1.8 million a year ago. Slower vessel traffic in certain ports serviced by the Company's tug fleet contributed to the decline. For the six months ended June 30, 2002, the company had a net loss of $6.7 million or $0.63 per diluted share on revenues of $164.8 million, versus a net loss of $4.5 million or $0.44 per diluted share on revenues of $172.8 million in the comparable 2001 period.
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