Seabulk Reports 4Q Results

Thursday, February 14, 2002
Seabulk International, Inc. has reported a net loss of $6.3 million for the quarter ended December 31, 2001. Included in the loss for the quarter is a writedown of $1.4 million or $0.13 per diluted share on the planned disposal of the company's inland barge and shipyard operation, part of an ongoing program to refocus the company on its core business. In the year-earlier period, the Seabulk had a net loss of $9.6 million or $0.96 per diluted share. Revenues of $84.2 million in the current quarter were up 5% from $80.0 million a year ago. Operating income, including the $1.4 million writedown mentioned above, fell to $7.3 million from $8.1 million in the year-earlier period. For the twelve months ended December 31, 2001, the company had a net loss of $7.9 million on revenues of $346.7 million. "The fourth quarter saw a falloff from our strong second and third quarter results as drilling activity in the Gulf of Mexico -- and hence the demand for vessels -- fell sharply on the heels of lower natural gas prices and reduced energy demand," commented President and Chief Executive Officer Gerhard E. Kurz. "We also had an unusually large number of scheduled drydockings in the quarter, including three of our double-hull tankers, which underwent their first inspections since being placed into service three years ago. This reduced their earnings capacity in the fourth quarter. The good news is that some of our idle equipment is going back to work in the Gulf, and we look for a rebound in exploration and production activity as the year progresses. In the meantime, the international offshore market -- and particularly West Africa, where we are the second largest operator -- continues to expand as this is primarily an oil-driven, deepwater business. In addition, our fleet of 10 U.S.-flag Jones Act tankers will reap the benefits of higher time charter rates, beginning this quarter, as three of our vessels entered into new contracts in January. As a result, we expect earnings from this sector to be significantly higher in 2002," Kurz concluded. Results of Operations Revenues from Seabulk Offshore, the Company's largest business with a fleet of 140 offshore energy support vessels, rose 14% in the quarter to $46.4 million from $40.6 million in the year-earlier period and accounted for 55% of total Company revenues. The Company's offshore revenues are split approximately 60%/40% between its international and domestic segments. Operating income from Seabulk Offshore totaled $6.6 million, up 37% from the $4.8 million earned in last year's fourth quarter. For the full year, Seabulk Offshore had revenues of $191.2 million and operating income of $39.2 million, up 26% and 277%, respectively, from $151.4 million and $10.4 million in 2000. Supply boat day rates in the Gulf of Mexico, where the Company has the industry's third-largest fleet, eased somewhat from the previous quarter but remained well ahead of the year-earlier period. Utilization, however, fell in the fourth quarter to 63% from 83% in the third quarter as the number of working rigs declined. In West Africa, where Seabulk Offshore has the industry's second largest fleet, average day rates rose across all vessel classes and utilization remained strong as this market continues to expand. The Company is mobilizing two of its Gulf of Mexico-based supply boats for redeployment to West Africa during the first quarter of 2002. For a complete breakdown of day rates and utilization by region for the Company's offshore fleet, please see the accompanying charts. Revenues from Seabulk Tankers, the Company's domestic marine transportation business (which includes its inland barge and shipyard subsidiary), totaled $29.3 million, or 35% of total Company revenues, versus $31.4 million in the fourth quarter of 2000. The decline in revenues reflects the conversion of several vessels from spot and affreightment contracts to more profitable time charters, under which the cost of fuel and port charges is borne by the charterer. Operating income in the quarter, which includes the $1.4 million writedown on the planned sale of the inland barge and shipyard subsidiary, declined to $2.1 million from $6.7 million in the year- earlier period as three of the Company's five double-hull carriers underwent mandatory survey inspections and a fourth was repositioned from the West Coast to the Gulf of Mexico. For all of 2001, Seabulk Tankers had revenues of $122.1 million and operating income of $21.0 million, compared with revenues of $136.0 million and operating income of $23.9 million in 2000, when the Company operated an additional tanker. Early in 2002 the Company signed a ten-year bareboat charter with a major oil company for one of its double-hull tankers, which will be repositioned to Alaska. With a fleet of 10 vessels, including five double-hulls, Seabulk Tankers is the largest independent owner of U.S.-flag, Jones Act tankers. Seabulk Towing, which operates a fleet of 31 tugs in seven southeastern ports and the offshore Gulf of Mexico, had revenues of $8.5 million, representing 10% of total Company revenues for the quarter, and up 5% from $8.1 million a year ago. Operating income rose 55% to $1.6 million from $1.0 million in the year-earlier quarter as a result of lower overhead costs and an increase in offshore spot towing jobs. For the full year, Seabulk Towing had revenues of $33.5 million versus $33.1 million in 2000. Operating income, however, increased 21% to $6.2 million in 2001 from $5.1 million in 2000, due mainly to reduced overhead costs.
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