SEACOR Holdings 2Q 2012 Results
SEACOR Holdings Announces Results for the Second Quarter Ended June 30, 2012.
SEACOR Holdings Inc. (NYSE: CKH) announced its results for the second quarter ended June 30, 2012. Net income attributable to SEACOR Holdings Inc. for the quarter ended June 30, 2012 was $11.2 million, or $0.54 per diluted share, including a net loss from discontinued operations of $0.4 million, or $0.02 per diluted share. For the six months ended June 30, 2012, net income attributable to SEACOR Holdings Inc. was $47.7 million, or $2.29 per diluted share, including net income from discontinued operations of $19.0 million, or $0.92 per diluted share.
On March 16, 2012, the Company disposed of certain companies and assets that were part of its Environmental Services business segment for a net sales price of $99.9 million and a gain of $20.8 million, net of tax, or $1.00 per diluted share. Operating results for all periods presented have been restated to reflect income (loss) from discontinued operations, net of tax, for the part of the business that was sold.
For the preceding quarter ended March 31, 2012, net income attributable to SEACOR Holdings Inc. was $36.5 million, or $1.75 per diluted share, including net income from discontinued operations of $19.4 million, or $0.93 per diluted share. A comparison of results for the quarter ended June 30, 2012 with the preceding quarter ended March 31, 2012 is included in the "Highlights for the Quarter" discussion below.
For the quarter ended June 30, 2011, net income attributable to SEACOR Holdings Inc. was $9.0 million, or $0.42 per diluted share, including a net loss from discontinued operations of $0.2 million, or $0.01 per diluted share. For the six months ended June 30, 2011, net income attributable to SEACOR Holdings Inc. was $20.2 million, or $0.94 per diluted share, including a net loss from discontinued operations of $1.4 million, or $0.06 per diluted share.
Highlights for the Quarter
Offshore Marine Services - Operating income was $0.8 million on operating revenues of $123.3 million compared with operating income of $22.9 million on operating revenues of $121.1 million in the preceding quarter. Second quarter results included $0.6 million in gains on asset dispositions compared with $1.8 million in gains in the preceding quarter.
In the U.S. Gulf of Mexico, second quarter results included the results of the Company's fleet of liftboats acquired on March 30, 2012. During the second quarter, these vessels contributed operating revenues of $21.9 million and operating income of $3.4 million with an average day rate of $17,454 per day and a utilization rate of 69.7%. Excluding liftboats, operating income was $18.2 million lower in the second quarter. Time charter revenues were $14.3 million lower primarily due to a decrease in rig moving activity for the Company's large anchor handling towing supply vessels. Utilization was 71.8% compared with 73.1% in the preceding quarter and average day rates decreased from $14,964 per day to $10,649 per day. As of June 30, 2012, the Company had no vessels cold-stacked in the U.S. Gulf of Mexico, compared with four as of March 31, 2012.
In international regions, operating income was $7.7 million lower in the second quarter. Time charter revenues were $3.9 million lower primarily due to reduced spot market activity and increased drydocking activity and upgrade downtime in Brazil. Excluding the Company's fleet of wind farm utility vessels, utilization was 83.3% compared with 85.6% in the preceding quarter and average day rates decreased from $12,149 per day to $11,631 per day. Operating expenses were $4.7 million higher primarily due to increased drydocking activity and the cost of vessel mobilizations between geographic regions.
In the second quarter, the total number of days available for charter for the Company's fleet, excluding the wind farm utility vessels, increased by 1,429 days, or 14%, primarily due to the liftboat acquisition. Overall utilization decreased from 80.6% to 77.4% and overall average day rates decreased by 8% from $13,174 per day to $12,068 per day. Time charter operating data by vessel class is presented in the table included herein. During the second quarter, drydocking and mobilization costs were $10.8 million and $1.2 million, respectively. In the preceding quarter, drydocking and mobilization costs were $5.3 million and $0.6 million, respectively.
Administrative and general expenses were $1.3 million higher in the second quarter primarily due to compensation costs for personnel added as a result of the liftboat acquisition. Depreciation and amortization expenses were $15.9 million in the second quarter, an increase of $3.0 million primarily due to depreciation on vessels and equipment added as a result of the liftboat acquisition.
Aviation Services - Operating income was $7.4 million on operating revenues of $63.0 million compared with operating income of $3.8 million on operating revenues of $61.1 million in the preceding quarter. Second quarter results included $1.1 million in gains on asset dispositions compared with $1.8 million in gains in the preceding quarter.
Operating revenues were $1.9 million higher primarily due to additional aircraft on contract and increased flight hours in the U.S. Gulf of Mexico and the start of seasonal activities in Alaska. Operating revenues from contract-leasing activities were lower due to the deferral of revenues from two customers as a result of the customers' short-term liquidity issues. Operating revenues from air medical services were lower due to the conclusion of a long-term hospital contract.
Operating expenses were lower in the second quarter primarily due to the recognition of $4.9 million in power-by-hour credits, partially offset by higher wage and benefit and fuel costs related to increased activity levels as described above.
Administrative and general expenses were $2.5 million lower in the second quarter primarily due to the recognition in the first quarter of previously deferred legal and professional expenses associated with a contemplated public offering. Depreciation and amortization expenses were $10.5 million in the second quarter, an increase of $0.8 million primarily due to net fleet additions.
Inland River Services - Operating income was $5.7 million on operating revenues of $53.3 million compared with operating income of $9.2 million on operating revenues of $53.5 million in the preceding quarter. Second quarter results included $0.9 million in gains on asset dispositions compared with $1.9 million in gains in the preceding quarter. Operating results for the pooled hopper barge fleet were lower in the second quarter primarily due to poor river conditions and continuing weak demand for barge freight primarily on grain exports.
Marine Transportation Services - Operating income was $0.5 million on operating revenues of $25.8 million compared with operating income of $2.4 million on operating revenues of $26.3 million in the preceding quarter. Operating results for the U.S.-flag product tanker fleet were lower in the second quarter primarily due to 21 days of out-of-service time and $1.6 million of expenses related to topside repairs on the Seabulk Arctic. Operating results for the foreign flag Roll-on/Roll-off vessels were lower primarily due to higher port charges and legal fees.
Emergency and Crisis Services - As noted above, the Company sold part of its Environmental Services business segment in March 2012. The remaining business within the segment, renamed Emergency and Crisis Services, reported an operating loss of $2.1 million on operating revenues of $8.4 million compared with an operating loss of $0.4 million on operating revenues of $10.2 million in the preceding quarter. The reduction in operating income was primarily due to higher legal and administrative costs, including an investment in marketing and business development activities, and a reduction in activity associated with the Deepwater Horizon incident and debris monitoring.
Commodity Trading and Logistics - Segment profit was $3.0 million on operating revenues of $206.7 million compared with segment profit of $5.6 million on operating revenues of $209.7 million in the preceding quarter. Segment results in the preceding quarter included the recognition of a $6.0 million gain, net of tax, arising from the Company's acquisition of a controlling interest in its alcohol manufacturing joint venture. Results from this joint venture were consolidated effective February 1, 2012. Excluding this gain, segment profit was higher in the second quarter primarily due to improved results from merchandising and trading activities.
Other - Other, primarily Harbor and Offshore Towing Services, reported operating income of $3.0 million on operating revenues of $17.6 million compared with operating income of $3.2 million on operating revenues of $19.9 million in the preceding quarter. Second quarter results included $1.9 million in gains on asset dispositions relating to the sale of two harbor tugs. Operating results were lower in the second quarter primarily due to decreased port traffic and the conclusion of a short-term contract on the U.S. West Coast.
Corporate and Eliminations - Administrative and general expenses were $7.5 million compared with $9.0 million in the preceding quarter. The decrease was primarily due to lower management bonus accruals.
Stock Repurchases - During the second quarter, the Company purchased 199,766 shares of its common stock at an average price of $87.22 per share. As of June 30, 2012, 20,947,558 shares of SEACOR's common stock remained outstanding.
Equipment Acquisitions - During the six months ended June 30, 2012, capital expenditures were $186.5 million. Equipment deliveries during that period included one offshore support vessel, one wind farm utility vessel, three inland river dry cargo barges, two liquid tank barges, one inland river towboat and 13 helicopters.
Capital Commitments - The Company's unfunded capital commitments as of June 30, 2012 were $377.6 million and consisted of: eleven offshore support vessels for $148.7 million; an interest in a jack-up drilling rig for $31.2 million; twelve helicopters for $139.3 million; seven inland river tank barges for $16.2 million; an interest in a river grain terminal for $1.3 million; four harbor tugs for $28.5 million; and other equipment and improvements for $12.4 million. Of these commitments, $110.2 million is payable during 2012 with the balance payable through 2016 and $123.0 million may be terminated without further liability other than the payment of liquidated damages of $3.3 million. Subsequent to June 30, 2012, the Company committed to purchase three inland river towboats for $11.4 million and notified the lessee of its intent to purchase three harbor tugs currently operating under capital leases for $3.9 million. As of June 30, 2012, the Company held balances of cash, cash equivalents, restricted cash, marketable securities, construction reserve funds and Title XI reserve funds totaling $544.6 million.
