Seabulk International: The Metamorphosis Continues

Over four decades ago, Hans J. Hvide and three partners formed Port Everglades Towing Company, the predecessor company of Hvide Marine, started with two harbor tugs. Under Hvide’s leadership, Port Everglades Towing expanded rapidly, eventually forming the three major business segments—Offshore Energy Support, Offshore & Harbor Towing, and Marine Transportation—of Hvide Marine Incorporated (HMI). Today, the company has grown into a worldwide enterprise, publicly traded on the Nasdaq stock exchange, with a fleet of nearly 240 vessels, more than 2,000 employees worldwide, and annual revenue exceeding $320 million.

However, the past three years have been anything but smooth sailing for Hvide Marine. On September 8, 1999, the company filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code and emerged from bankruptcy on December 15, 1999. Offshore energy support accounted for 44 percent of 1999 revenues; marine transportation services, 43 percent and offshore and harbor towing, 13 percent.

Having emerged from Chapter 11 reorganization “HMI is now a new company with new leadership at almost every level of the organization. Since I took the helm in April 2000, this company has been undergoing an aggressive restructuring and consolidation program that is allowing us to unlock hidden asset values and to take advantage of favorable business conditions. As a result, we have achieved better quarter-to-quarter performance to date,” said Gerhard E. Kurz, president and CEO of Hvide Marine.

On Jan. 29 the company announced that it had received Hart-Scott-Rodino clearance and had completed the purchase of the remaining 24.25 percent equity interest in Lightship Tankers LLC previously held by Newport News Shipbuilding. The transaction, originally announced on December 22, 2000, is valued at $11 million and gives HMI 100 percent ownership of these five 1998-and 1999- built double-hull, state-of-the-art product tankers.

On February 28, the company reported a net loss of $9.6 million or $0.96 per diluted share for the fourth quarter ended December 31, 2000, on revenues of $80 million. In the year-earlier period, the company had a net loss of $197 million, including charges related to its reorganization, on revenues of $76.8 million. Operating income in the fourth quarter of 2000 was $8.1 million versus an operating loss of $11.8 million in the fourth quarter of 1999.

For all of 2000, the company reported a net loss of $29 million or $2.89 per diluted share on revenues of $320.5 million. In 1999, the company had a net loss of $249.9 million on revenues of $342.2 million. Per-share comparisons for the fourth quarter and full-year 1999 are not meaningful due to the company’s adoption of Fresh Start Accounting on December 15, 1999. Operating income in 2000 totaled $25.4 million versus an operating loss of $9.5 million in 1999.

Effective March 19, Hvide Marine changed its name to Seabulk International, Inc. and its stock would begin trading under a new symbol, SBLK, on March 21. Seabulk Offshore is the brand name of the company’s biggest and best-known business — its offshore energy support activities, which operate worldwide and account for nearly half of the company’s revenues.

“We are excited about the name change, which sends the strongest possible signal to our shareholders, customers and employees that we are a new company under new leadership with a new corporate attitude, vision and strategy,” said Kurz. “The new name symbolically ends the first year and marks the beginning of the second year of the new organization. The year 2000 was not easy, but we made good progress toward our goals of debt reduction, cutting costs, quarter-over-quarter improvement in operating results, and positioning the company for long-term profitability and growth. In addition to paying down nearly $50 million in debt, we invested heavily in vessel maintenance and upkeep so as to take advantage of rising markets in both our offshore and tanker businesses.”

In the fourth quarter of 2000, revenues from the company’s Seabulk Offshore unit increased to $40.6 million from $33.3 million in the year-ago period as the recovery that began in the first quarter of 2000 gathered speed, particularly in the Gulf of Mexico and West Africa. For the full year, Seabulk Offshore had revenues of $151.4 million versus $150.3 million in 1999. In the Gulf of Mexico, average day rates for Seabulk Offshore’s 24 supply boats increased to $5,864 in the fourth quarter of 2000 from $4,872 in the third quarter and $3,379 in the year-ago quarter.

Utilization was 65 percent in the fourth quarter versus 63 percent in the third quarter of 2000 and 73 percent in the year-earlier period. Seabulk Offshore’s 30 Gulf of Mexico crewboats averaged $2,478 per day and an 87 pecent utilization rate, up from $2,114 and an 87 percent utilization in the third quarter of 2000 and $1,827 and 87percent in the year-ago quarter.