THE WOODLANDS, Texas, Feb. 28, 2009 (GLOBE NEWSWIRE) -- Trico Marine Services, Inc. (Nasdaq:TRMA) (the "Company" or "Trico") today announced its financial results for the fourth quarter of 2008 of $0.30 per adjusted diluted share, a non-GAAP measure, on revenues of $177.9 million. This excludes the effect of a non-cash impairment charge for goodwill and other intangibles totaling $172.8 million, a non-cash gain of $9.0 million on conversion of debt and a non-cash gain totaling $23.4 million related to the accounting treatment for the derivative component of the Company's 6.5% convertible senior notes (see reconciliation of adjusted non-GAAP net income in the attached table).
Chairman and Chief Executive Officer, Joseph S. Compofelice, commented, "Our fourth quarter EPS met expectations but the more important point is that 2008 marked the transformation of Trico from an OSV operator to an international subsea services provider with our acquisitions of DeepOcean and CTC Marine. As 2008 progressed, industry growth was dampened by growing weakness in global economic conditions and the decline in oil prices that clearly impacted our ability to maximize value during the fourth quarter. Nevertheless, the fundamentals of subsea growth will remain strong, with national oil companies confirming their intentions for spending in their 2009 plans. We believe that the subsea market will continue in 2009 and 2010 to provide unit volume growth, one of the few areas of oilfield service able to do so." Mr. Compofelice concluded, "We remain cautiously optimistic as we exercise prudent judgment with our liquidity, continue to focus our subsea service and vessel utilization with national oil companies and international majors worldwide, and focus on cost containment in the weaker OSV segment of our business."
Summary Results
Total revenues for the fourth quarter of 2008 were $177.9 million, compared to $214.8 million for the third quarter. Contributing to the decrease in revenues from the third quarter was a $23.9 million effect as a result of the strengthening U.S. Dollar against European currencies. EBITDA for the fourth quarter was $30.3 million, before the impairment charge, compared to $41.5 million in the third quarter.
The primary reasons for the reduction in revenues and EBITDA, other than the effects of the stronger dollar mentioned above, were lower utilization of vessels in the Subsea Services division, and lower utilization and increased operating expenses in the Towing and Supply division, particularly in the North Sea. The lower utilization of our subsea service vessels was due to a voluntary acceleration of a dry docking of one large construction vessel to better position the vessel for a new 2009 long-term contract as well as a planned mobilization of one vessel to the Mediterranean. The cost of these two vessel decisions increased fourth quarter spending by about $3 million.
Division Results
In the Company's Subsea Services division, principally DeepOcean, operating results were slightly below the Company's expectations due to seasonal softness in the North Sea, low utilization on two vessels for reasons previously mentioned and downtime while a new vessel, the Edda Fauna, was in drydock for warranty repair. The Edda Fauna was delivered in the first quarter of 2008.
In March 2009, the Company will take delivery of one additional newbuild, the first delivery of eight multi-purpose platform supply vessels acquired as part of Active Subsea with the second of the eight vessels due in June 2009.
In the Company's Subsea Trenching and Protection division, CTC Marine, we were pleased with the performance in what is typically a seasonally slow quarter. The division experienced high utilization in the fourth quarter, including work in China and Brazil that we expect to continue through the first quarter of 2009. This quarter was the second best quarter in terms of revenue, operating income and margins in CTC's recent history.
For the Towing and Supply division, day rates and utilization reflected the weakness in the North Sea spot market. Contributing to the decrease in revenues from the third quarter was a $4.4 million effect as a result of the strengthening U.S. Dollar against European currencies.
During the fourth quarter of 2008, the Company took delivery of one newbuild vessel, an SPSV, the Trico Moon. Since delivery, the vessel has been contracted for work in the U.S. Gulf of Mexico. The Trico Moon will start work on a two-year contract in Mexico in March 2009.
Market Outlook
While the operating results were not as strong as the third quarter, we are encouraged by some recent developments which we anticipate will be reflected in our results commencing in the middle of the second quarter of 2009. These new contract awards reflect both our ability to establish a meaningful presence in critical growth markets for subsea services, such as Mexico, Brazil, and Australia, as well as our ability to leverage our group structure to provide opportunities for our other vessels and services when we have secured a contract award for one suite of services. These opportunities include:
* Two new four- to six-month contracts in China and the Mediterranean for Subsea Trenching and Protection Services. * A strong outlook in Mexico for our three larger construction vessels. * Approximately $100 million of previously announced contract awards in our Subsea Services and Subsea Trenching and Protection segments.
Our backlog remains healthy at approximately $0.9 billion of termed out or long-term contracts spread principally across the Subsea Services and Towing and Supply businesses. In the fourth quarter of 2008, approximately 80% of our business was with major or national oil companies, and 92% of our business was in international waters. We are experiencing weakness in the Towing and Supply division in the North Sea and the U.S. Gulf of Mexico, and are currently taking steps to reduce costs in areas where our activity has declined, including the closing or consolidation of several offices.
Liquidity Outlook
At December 2008, the Company had $95 million in cash and $712 million in net debt. During the fourth quarter of 2008, the Company converted $22 million of convertible debt into equity and drew down $30 million under its credit facilities. The Company realized a gain on the conversion of debt of $9 million.
At December 2008, the Company's cash and credit availability to fund capital expenditures was $252 million. Committed capital expenditures through the end of 2011 are $183 million. We believe that our liquidity and projected cash flows from operations will be sufficient to meet our cash requirements for the next twelve months and the foreseeable future and to fund our commitments for vessel newbuilds.
Conference Call Information
The Company will conduct a conference call at 8:30 a.m. ET on Monday, March 2, 2009, to discuss the results with analysts, investors and other interested parties. Individuals who wish to participate in the conference call should dial (877) 874-1586, access code 5429910, in the United States or (719) 325-4826, access code 5429910, from outside the country.
A telephonic replay of the conference call will be available until March 16, 2009, starting approximately 1 hour after the completion of the call, and can be accessed by dialing (888) 203-1112 access code 5429910 (international calls should use (719) 457-0820, access code 5429910).
About Trico
Trico Marine is an integrated provider of subsea, trenching and marine support vessels and services. The Company recently increased its subsea market presence through its acquisition of DeepOcean and CTC Marine, a recognized market leader in the provision of high-quality subsea services including IMR, survey and construction support, subsea intervention and decommissioning, marine trenching, and the laying and burying of subsea cable. DeepOcean controls a well equipped fleet of vessels and operates a fleet of modern ROVs and trenching equipment. Trico Marine also continues to provide a broad range of marine support services to the oil and gas industry through use of its diversified fleet of vessels including the transportation of drilling materials, supplies and crews to drilling rigs and other offshore facilities; towing drilling rigs and equipment; and support for the construction, installation, repair and maintenance of offshore facilities. Trico Marine is headquartered in The Woodlands, Texas and has a global presence with operations in the North Sea, West Africa, Mexico, Brazil and Southeast Asia as well as the U.S. Gulf of Mexico.
For more information about Trico Marine Services, Inc. visit us on the web at www.tricomarine.com.
The Trico Marine Services, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5229
Certain statements in this press release that are not historical fact may be "forward looking statements." Forward-looking statements are projections of events, revenues, income, future economic performance or management's plans and objectives for the Company's future operations. Actual events may differ materially from those projected in any forward-looking statement. There are a number of important factors involving risks (known and unknown) and uncertainties beyond the control of the Company that could cause actual events to differ materially from those expressed or implied by such forward-looking statements. These risks, by way of example and not in limitation, include the Company's objectives, business plans or strategies, and projected or anticipated benefits or other consequences of such plans or strategies; the Company's ability to obtain adequate financing on a timely basis and on acceptable terms, including with respect to refinancing debt maturing in the next twelve months; the Company's ability to continue to service, and to comply with our obligations under, our credit facilities and our other indebtedness, including our obligation to pay make-whole amounts upon any conversion of our convertible debentures due 2028; projections involving revenues, operating results or cash provided from operations, or the Company's anticipated capital expenditures or other capital projects; overall demand for and pricing of the Company's vessels; changes in the level of oil and natural gas exploration and development; the Company's ability to successfully or timely complete its various vessel construction projects; further reductions in capital spending budgets by customers; further decline in oil and natural gas prices; projected or anticipated benefits from acquisitions; increases in operating costs; the inability to accurately predict vessel utilization levels and day rates; variations in global business and economic conditions; the results, timing, outcome or effect of pending or potential litigation and our intentions or expectations with respect thereto and the availability of insurance coverage in connection therewith; and the Company's ability to repatriate cash from foreign operations if and when needed. A further description of risks and uncertainties relating to Trico Marine Services, Inc. and its industry and other factors, which could affect the Company's results of operations or financial condition, are included in the Company's Securities and Exchange Commission filings. Trico undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this report. These results should be considered preliminary until the Company files its Form 10-K with the Securities and Exchange Commission.
The following table sets forth the Company's reconciliation of non-GAAP adjusted net income for the third and fourth quarters of 2008 as compared to reported net income (loss):
Trico Marine Services, Inc.
(Unaudited)
(Dollars in thousands, except per share amounts)
Three Months Ended
---------------------------------------------------
December 31, 2008 September 30, 2008
---------------------- ------------------------
Earnings Earnings
(loss) per (loss) per
Results share Results share
--------- --------- ---------- ----------
Net income (loss),
as reported $(150,011) $ (10.05)(1) $ 30,970 $ 1.86
Adjustments:
Impact of
impairments 172,840 10.46 -- --
Impact of
financial
derivative (21,348) (1.29) (29,449)(3) (1.77)
Gain on
conversion of
debt (9,008) (0.55) -- --
Tax effect 12,435 0.75 11,043 0.66
--------- --------- ---------- ----------
Non-GAAP adjusted
net income $ 4,908 $ 0.30 (2) $ 12,564 $ 0.75
========= ========= ========== ==========
-----------------
(1) Net loss per share for the fourth quarter, as reported, is
calculated using basic weighted average shares due to a loss for
the period.
(2) Non-GAAP adjusted net income for the fourth quarter is calculated
based on diluted weighted average shares for the period.
(3) The third quarter net income and income per share included $29.4
million as a result of accounting for the derivative component of
the 6.5% convertible senior notes.
The following table reconciles Adjusted EBITDA to operating income (loss):
Three Months Ended
Dec 31, Sept 30,
2008 2008
--------- ---------
(In thousands)
Adjusted EBITDA $ 30,259 $ 41,518
Impairments (172,840) --
Amortization of non-cash deferred revenues 69 93
Loss on sale of assets (61) (10)
Stock-based compensation (715) (735)
Depreciation and amortization (20,104) (21,673)
--------- ---------
Operating income (loss) $(163,392) $ 19,193
========= =========
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands, except per share amounts)
---------------------- ----------------------
Three Months Ended Twelve Months Ended
---------------------- ----------------------
Dec 31, Sept 30, Dec 31, Dec 31,
2008 2008 2008 2007
---------- ---------- ---------- ----------
(Unaudited) (Unaudited)
Revenues $ 177,871 $ 214,793 $ 556,131 $ 256,108
Operating expenses:
Direct operating
expenses 124,942 155,113 383,894 127,128
General and
administrative 23,316 18,804 68,185 40,760
Depreciation and
amortization expense 20,104 21,673 61,432 24,371
Impairments 172,840 -- 172,840 116
(Gain) loss on
sales of assets 61 10 (2,675) (2,897)
---------- ---------- ---------- ----------
Total operating
expenses 341,263 195,600 683,676 189,478
Operating income (loss) (163,392) 19,193 (127,545) 66,630
Interest income 2,497 2,529 9,875 14,132
Interest expense, net
of amounts capitalized (13,841) (11,694) (31,943) (3,258)
Change in fair value
of embedded derivative 23,448 31,515 52,653 --
Gain on conversion
of debt 9,008 -- 9,008 --
Other expense, net (449) (50) (1,597) (3,646)
---------- ---------- ---------- ----------
Income (loss) before
income taxes and
noncontrolling
interest of
consolidated
subsidiary (142,729) 41,493 (89,549) 73,858
Income tax expense 5,728 7,670 14,823 13,359
---------- ---------- ---------- ----------
Income (loss) before
noncontrolling
interest of
consolidated
subsidiary (148,457) 33,823 (104,372) 60,499
Noncontrolling interest
of consolidated
subsidiary (1,554) (2,853) (6,791) 2,432
---------- ---------- ---------- ----------
Net income (loss) $ (150,011) $ 30,970 $ (111,163) $ 62,931
========== ========== ========== ==========
Earnings (loss) per
common share:
Basic $ (10.05) $ 2.09 $ (7.54) $ 4.32
========== ========== ========== ==========
Diluted $ (10.05) $ 1.86 $ (7.54) $ 4.16
========== ========== ========== ==========
Weighted average shares
outstanding:
Basic 14,924 14,827 14,744 14,558
========== ========== ========== ==========
Diluted 14,924 16,680 14,744 15,137
========== ========== ========== ==========
Cash Flow Data
(Unaudited):
Cash provided by
operating activities $ 8,423 $ 26,643 $ 79,176 $ 112,476
Cash used in investing
activities (25,441) (94,138) (592,115) (235,269)
Cash provided by
financing activities 33,377 11,953 502,596 130,361
Capital
expenditures (a) (29,245) (15,914) (106,717) (26,063)
---------------------- ----------------------
---------- ----------
Balance Sheet Data: Dec 31, Dec 31,
2008 2007
---------- ----------
(Unaudited)
Cash and cash
equivalents $ 94,613 $ 131,463
Total assets 1,202,576 681,744
Total short-term debt 82,982 3,258
Total long-term debt
(including derivative
liability) 724,067 157,287
Total liabilities 1,024,480 278,644
Noncontrolling
interests 21,886 12,878
Stockholders' equity 156,210 390,222
(a) Capital expenditures for property, plant and equipment excludes
acquisition of businesses.
Trico Marine Services, Inc.
Consolidating Statements of Income
(Unaudited)
(In thousands)
Three Months Ended December 31, 2008
-----------------------------------------------------
Subsea
Trenching Corporate
Towing Subsea and & Elimin
and Supply Services Protection -ations Total
--------- --------- --------- --------- ---------
Revenues $ 52,502 $ 72,383 $ 55,846 $ (2,860) $ 177,871
Operating
expenses:
Direct
operating
expenses 31,612 56,445 39,745 (2,860) 124,942
General and
administrative 5,837 3,944 7,174 6,361 23,316
Depreciation
and
amortization 5,492 8,836 5,699 77 20,104
Impairments -- 133,353 39,487 -- 172,840
Loss on sale
of assets 61 -- -- -- 61
--------- --------- --------- --------- ---------
Total operating
expenses 43,002 202,578 92,105 3,578 341,263
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Operating income
(loss) $ 9,500 $(130,195) $ (36,259) $ (6,438) $(163,392)
========= ========= ========= ========= =========
Three Months Ended September 30, 2008
-----------------------------------------------------
Subsea
Trenching Corporate
Towing Subsea and & Elimin
and Supply Services Protection -ations Total
--------- --------- --------- --------- ---------
Revenues $ 59,331 $ 104,934 $ 59,550 $ (9,022) $ 214,793
Operating
expenses:
Direct
operating
expenses 31,505 87,657 44,973 (9,022) 155,113
General and
administrative 5,832 3,740 2,679 6,553 18,804
Depreciation
and
amortization 7,072 8,525 6,026 50 21,673
Loss on sale
of assets 10 -- -- -- 10
--------- --------- --------- --------- ---------
Total operating
expenses 44,419 99,922 53,678 (2,419) 195,600
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Operating income
(loss) $ 14,912 $ 5,012 $ 5,872 $ (6,603) $ 19,193
========= ========= ========= ========= =========
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
Vessel Metrics
(Unaudited)
For the
Period
Jan 1, Three Months Ended
2009 to ----------------------------
Feb 23, Dec 31, Sept 30, June 30,
2009 2008 2008 2008
-------- -------- -------- --------
Average Day Rates:
Subsea Services
SPSVs (1) $ 23,468 $ 23,678 $ 22,422 $ 21,941
MSVs (2) 70,604 66,750 83,403 88,384
Subsea Trenching
and Protection $103,580 $140,498 $163,254 $177,165
Towing and Supply
AHTSs (3) $ 29,945 $ 31,871 $ 37,476 $ 32,983
PSVs (4) 15,158 17,219 18,991 17,486
OSVs (5) 7,529 8,439 7,856 7,252
Utilization:
Subsea Services
SPSVs 73% 78% 78% 77%
MSVs 74% 79% 80% 81%
Subsea Trenching
and Protection 81% 90% 100% 90%
Towing and Supply
AHTSs 71% 90% 97% 78%
PSVs 85% 89% 96% 92%
OSVs 69% 83% 87% 82%
Average Number of Vessels:
Subsea Services
SPSVs 7.0 6.4 5.4 5.0
MSVs 9.6 9.6 9.4 9.0
Subsea Trenching
and Protection 3.1 4.6 3.7 3.0
Towing and Supply
AHTSs 6.0 6.0 6.0 6.0
PSVs 7.0 7.0 7.0 7.0
OSVs 38.0 38.0 38.0 38.0
----------------------
(1) Subsea platform supply vessels
(2) Multi-purpose service vessels
(3) Anchor handling, towing and supply vessels
(4) Platform supply vessels
(5) Offshore supply vessels