Inc. announced net earnings for the third quarter ended September 30, 2003 of $2.9 million, or $0.15 per diluted share, on operating revenues of $103.2 million. For the nine months ended September 30, 2003, net earnings were $13.7 million, or $0.71 per diluted share, on operating revenues of $305.3 million.
For the third quarter ended September 30, 2002, net earnings were $21.3 million, or $1.02 per diluted share, on operating revenues of $102.1 million. For the nine months ended September 30, 2002, net earnings were $44.9 million, or $2.16 per diluted share, on operating revenues of $303.5 million.
For the quarter ended June 30, 2003, net earnings were $6.4 million, or $0.33 per diluted share, on operating revenues of $105.2 million.
Financial results for the third quarter ended September 30, 2003 as compared to the immediately preceding quarter were impacted, on a pre-tax basis, by a variety of factors highlighted below and described in greater detail in subsequent paragraphs and tables in this release.
· Decreased operating revenues. Operating revenues decreased $1.9 million. Reduced fees and services provided on a major environmental project that began in the first quarter and lower demand for helicopter services decreased revenues. These declines were partially offset by higher revenues earned by barges and offshore marine vessels added to the Company's fleet.
· Decreased operating income. Operating income decreased $4.8 million. In addition to those factors affecting revenues, operating income declined in part due to higher North Sea crew wage costs, unscheduled repair costs mostly reflecting insurance deductibles, additional expenses associated with planned overhauls and "start-up" costs associated with the charter-in of 166 additional barges.
· Decreased debt extinguishment expense. Prior quarter results included
a $1.0 million charge against income for the write-off of unamortized discount upon debt repayment.
· Increased income from equipment sales. The sale of additional vessels in the third quarter resulted primarily in the $1.9 million increase in equipment sale income.
· Decreased results from derivative transactions. The mark-to-market accounting of derivative transactions decreased other income by $3.1 million.
· Other, net. Other income declined $1.1 million resulting primarily from foreign currency accounting losses, partially offset by higher security sale gains and the non-recurrence of an investment impairment charge of the prior quarter.
The Company's offshore marine fleet declined from 283 vessels at the end of the prior quarter to 279 at September 30, 2003. During the quarter, the Company sold 11 vessels, 4 of which were leased-back, and took delivery of 2 newly constructed crew vessels. Additional fleet change information is described in the attached supplementary operational data schedule.
The Company's inland river hopper barge fleet
grew from 559 units at the end of the prior quarter to 735 units at September 30, 2003 primarily due to the charter-in of 166 barges in the current quarter.
Derivative results in the second and third quarters primarily related to swap agreements with respect to $41.0 million notional amount of the Company's 7.2% Senior Notes due 2009. The Company recognizes unrealized income or loss based on the fair value of such swap agreements.
Equity in earnings of 50% or less owned companies increased $0.6 million between quarters. Offshore marine and marine telecommunication joint venture earnings were higher and a newly formed offshore marine joint venture commenced operations. Third quarter results included a $1.0 million charge against equity earnings for U.S. income taxes payable on dividends received from a foreign joint venture.