SEACOR Holdings Announces Q2 Results

SEACOR Holdings Inc. has announced its results for its second quarter ended June 30, 2014.

For the quarter ended June 30, 2014, net income attributable to SEACOR Holdings Inc. was $21.1 million, or $0.98 per diluted share. For the six months ended June 30, 2014, net income attributable to SEACOR Holdings Inc. was $32.6 million, or $1.58 per diluted share.

For the preceding quarter ended March 31, 2014, the company reported net income attributable to SEACOR Holdings Inc. of $11.5 million, or $0.56 per diluted share. A comparison of results for the quarter ended June 30, 2014 with the preceding quarter ended March 31, 2014 is included in the "Highlights for the Quarter" discussion below.

For the quarter ended June 30, 2013, net income attributable to SEACOR Holdings Inc. was $19.3 million, or $0.91 per diluted share. For the six months ended June 30, 2013, net loss attributable to SEACOR Holdings Inc. was $1.7 million, or $0.09 per diluted share, including income from continuing operations of $8.5 million, or $0.42 per diluted share.

Highlights for the Quarter
Offshore Marine Services - Operating revenues for the second quarter were $138.2 million compared with $129 million in the preceding quarter. Operating income in the second quarter was $18.1 million compared with $11.2 million in the preceding quarter, including gains on asset dispositions of $3.5 million in the second quarter and $7.7 million in the preceding quarter. This release includes a table presenting time charter operating data by vessel class.

In the U.S. Gulf of Mexico, operating revenues were $11.5 million higher in the second quarter. Time charter revenues for the company's liftboat fleet were $7.1 million higher, primarily due to the seasonal improvement in utilization.

During the second quarter, the number of out-of-service days attributable to the drydocking of liftboats was 101 compared with 349 in the preceding quarter, overall utilization was 80.2% compared with 60.2% in the preceding quarter, and average day rates increased from $22,219 per day to $23,017 per day. Time charter revenues for anchor handling towing supply vessels increased by $7.2 million, primarily due to increased utilization in support of platform supply activities and reduced drydocking activity. Time charter revenues for all other vessel classes were $3.5 million lower, primarily due to vessel dispositions and increased drydocking activity. On a total fleet basis, fleet utilization was 77.4% compared with 70.6% in the preceding quarter and average day rates increased from $17,010 per day to $19,736 per day. As of June 30, 2014, the Company had two vessels cold-stacked in the U.S. Gulf of Mexico.

In international regions, operating revenues were $2.3 million lower in the second quarter. Time charter revenues were $1.8 million lower, primarily due to the repositioning of three vessels into the U.S. Gulf of Mexico and increased drydocking activity partially offset by seasonally stronger market conditions for the Company's windfarm utility vessels and the commencement of a term charter in Asia. Excluding windfarm utility vessels, fleet utilization was 82.4% compared with 86.8% in the preceding quarter and average day rates decreased from $12,561 per day to $12,455 per day.

Administrative and general expenses were $1.7 million lower in the second quarter primarily due to a reduction in the provision for doubtful debts.

During the second quarter, the company sold four offshore support vessels and other equipment for net proceeds of $50.5 million and gains of $14.5 million, of which $2.5 million was recognized currently and $12 million was deferred.

In addition, the Company recognized previously deferred gains of $1 million. During the preceding quarter, the Company sold five offshore support vessels and other equipment for net proceeds of $10.2 million and gains of $7.7 million.

In the second quarter, the company received net litigation settlement proceeds of $14.7 million from an equipment supplier relating to the May 2008 mechanical malfunction and fire onboard the SEACOR Sherman, an anchor handling towing supply vessel then under construction. Upon settlement of the litigation, the Company recognized a gain of $14.7 million included in other income (expense).

Inland River Services - Operating income was $0.4 million on operating revenues of $56 million in the second quarter compared with operating income of $7.4 million on operating revenues of $58 million in the preceding quarter.

Operating results from the dry-cargo barge pool were $5.4 million lower primarily due to lower rates, a seasonal reduction in activity levels and poor barge fleet logistics as a consequence of difficult operating conditions. Operating results for the 10,000 barrel liquid tank barge fleet were $0.6 million lower primarily due to the cost of U.S. Coast Guard inspections and related repair expenditures. Operating results for the liquid unit tow operation were $0.5 million lower primarily due to costs associated with placing two towboats into operation during the second quarter. Operating results for fleeting operations were $0.9 million lower primarily due to reduced activity as a result of flooding on the upper Mississippi.

During the second quarter, equity losses from 50% or less owned companies of $3.3 million were primarily due to continued intermediary operations following a structural failure of a terminal facility at the Port of Ibicuy, Argentina.

Shipping Services - Operating income was $13 million on operating revenues of $53.6 million in the second quarter compared with operating income of $11.8 million on operating revenues of $52.4 million in the preceding quarter.

The increase in operating income was primarily due to an increase in higher yield harbor traffic and lower leased-in equipment costs for harbor towing and bunkering and an improvement in cargo shipping demand for short-sea transportation.

Illinois Corn Processing - Segment profit was $13.5 million on operating revenues of $72.8 million in the second quarter compared with $10.8 million on operating revenues of $58.7 million in the preceding quarter. Operating results in both periods benefited from improved margins as corn prices declined and ethanol prices held firm due to increased export demand and rail delays.

Other - Segment loss was $9 million in the second quarter compared with a $3.9 million loss in the preceding quarter. The increase was primarily due to a $5 million provision for certain litigation matters related to the Deepwater Horizon oil spill.

Net Income attributable to Noncontrolling Interests in Subsidiaries - During the second quarter, the company issued a 49% noncontrolling ownership interest in certain company subsidiaries ("SEA-Vista") operating its fleet of seven U.S.-flag product tankers used for the U.S. coastwise trade of crude oil, petroleum and specialty chemical products as well as contracts for the construction of three U.S.-flag product tankers for $145.7 million, net of issuance costs.

During the second quarter, the company's net income attributable to noncontrolling interests in subsidiaries was primarily due to the noncontrolling interests' proportionate share in the consolidated earnings of Illinois Corn Processing and SEA-Vista.

Share Repurchases - During the quarter ended June 30, 2014, the company purchased 493,032 shares of its common stock for an aggregate purchase price of $39.2 million. Subsequent to June 30, 2014 and through July 29, 2014, the company purchased 321,377 shares of its common stock for an aggregate purchase price of $25.4 million. Effective at the close of business on July 31, 2014, the Board of Directors of the company increased its authorization for repurchases of SEACOR's common stock for a total authorized expenditure of up to $150 million. The repurchase of securities may be conducted from time to time through open market purchases, privately negotiated transactions or otherwise depending on market conditions.

Capital Commitments - As of June 30, 2014, the company's unfunded capital commitments were $412.8 million and included: $86.5 million for 13 offshore support vessels; $1.1 million for two inland river tank barges; $4.6 million for four inland river towboats; $230.2 million for three U.S.-flag product tankers; $78.4 million for one U.S.-flag articulated tug-barge; and $12 million for other equipment and improvements. These commitments are payable as follows: $99.7 million is payable during the remainder of 2014; $303.8 million is payable during 2015-2016; and $9.3 million is payable during 2017. This release includes a table detailing expected delivery by vessel class.

Liquidity and Debt - As of June 30, 2014, the company's balances of cash, cash equivalents, restricted cash, marketable securities, construction reserve funds and Title XI reserve funds totaled $825.9 million and its total outstanding long-term debt was $873.9 million.