UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 2005 or
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[_] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from ------------ to ------------
Commission file number 1-12289
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SEACOR Holdings Inc.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware 13-3542736
- ------------------------------------ --------------------------------
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
11200 Richmond, Suite 400, Houston, Texas 77082
- -------------------------------------------- --------------------------------
(Address of Principal Executive Offices) (Zip Code)
(281) 899-4800
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [X] No [ ]
The total number of shares of common stock, par value $.01 per share,
outstanding as of May 3, 2005 was 18,441,895. The Registrant has no other class
of common stock outstanding.
SEACOR HOLDINGS INC.
Table of Contents
Page No.
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Part I. Financial Information
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets as of
March 31, 2005 and December 31, 2004........................................................1
Condensed Consolidated Statements of Operations for each of the
Three Months Ended March 31, 2005 and 2004..................................................2
Condensed Consolidated Statements of Cash Flows for each of the
Three Months Ended March 31, 2005 and 2004..................................................3
Notes to the Condensed Consolidated Financial Statements........................................4
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations...................................................................8
Item 3. Quantitative and Qualitative Disclosures About Market Risk.....................................16
Item 4. Controls and Procedures........................................................................16
Part II. Other Information
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds....................................17
Item 6. Exhibits.......................................................................................17
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SEACOR HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data, unaudited)
March 31, December 31,
2005 2004
--------------- ---------------
ASSETS
Current Assets:
Cash and cash equivalents........................................ $ 395,401 $ 214,389
Available-for-sale securities.................................... 74,858 136,992
Trade and other receivables, net of allowance for
doubtful accounts of $3,539 and $3,357, respectively........... 164,848 193,050
Prepaid expenses and other current assets........................ 54,148 54,290
--------------- ---------------
Total current assets........................................... 689,255 598,721
--------------- ---------------
Investments, at Equity, and Receivables from
50% or Less Owned Companies...................................... 48,284 47,870
Property and Equipment.............................................. 1,129,306 1,236,261
Less accumulated depreciation.................................... (283,920) (310,674)
--------------- ---------------
Net property and equipment..................................... 845,386 925,587
--------------- ---------------
Construction Reserve Funds.......................................... 144,894 144,006
Other Assets........................................................ 51,134 49,825
--------------- ---------------
$ 1,778,953 $ 1,766,009
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt................................ $ 12,983 $ 13,228
Accounts payable and accrued expenses............................ 49,621 63,461
Other current liabilities........................................ 81,093 65,797
--------------- ---------------
Total current liabilities...................................... 143,697 142,486
--------------- ---------------
Long-Term Debt...................................................... 582,416 582,367
Deferred Income Taxes............................................... 208,862 211,542
Deferred Income and Other Liabilities............................... 24,888 28,988
Minority Interest in Subsidiaries................................... 7,158 6,869
Stockholders' Equity:
Common stock, $.01 par value, 24,755,130 and 24,545,428 shares
issued at March 31, 2005 and December 31, 2004................. 248 245
Additional paid-in capital....................................... 421,150 412,210
Retained earnings................................................ 569,864 551,273
Treasury stock, 6,313,235 and 6,237,932 shares at
March 31, 2005 and December 31, 2004, at cost.................. (203,065) (197,850)
Unamortized restricted stock compensation........................ (5,566) (2,423)
Accumulated other comprehensive income -
Cumulative translation adjustments........................... 16,629 18,296
Unrealized gain on available-for-sale securities............. 12,672 12,006
--------------- ---------------
Total stockholders' equity................................... 811,932 793,757
--------------- ---------------
$ 1,778,953 $ 1,766,009
=============== ===============
The accompanying notes are an integral part of these financial statements
and should be read in conjunction herewith.
1
SEACOR HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share data, unaudited)
Three Months Ended
March 31,
-----------------------------
2005 2004
----------- -----------
Operating Revenues............................................ $ 165,185 $ 95,974
----------- -----------
Costs and Expenses:
Operating expenses......................................... 115,601 75,030
Administrative and general................................. 18,495 15,076
Depreciation and amortization.............................. 18,282 13,961
----------- -----------
152,378 104,067
----------- -----------
Gains on Asset Sales.......................................... 13,516 3,638
----------- -----------
Operating Income (Loss)....................................... 26,323 (4,455)
----------- -----------
Other Income (Expense):
Interest income............................................ 3,679 1,379
Interest expense........................................... (7,591) (5,378)
Derivative income (loss), net.............................. (1,590) 79
Foreign currency transaction gains (losses), net........... (549) 466
Marketable securities sale gains, net...................... 6,234 2,749
Other, net................................................. 200 119
----------- -----------
383 (586)
----------- -----------
Income (Loss) Before Income Tax Expense (Benefit), Minority
Interest in Loss of Subsidiaries and Equity in Earnings
of 50% or Less Owned Companies............................. 26,706 (5,041)
Income Tax Expense (Benefit).................................. 9,740 (1,502)
----------- -----------
Income (Loss) Before Minority Interest in Loss of
Subsidiaries and Equity in Earnings of 50% or
Less Owned Companies........................................ 16,966 (3,539)
Minority Interest in Loss of Subsidiaries..................... 34 5
Equity in Earnings of 50% or Less Owned Companies............. 1,617 570
----------- -----------
Income (Loss) from Continuing Operations...................... 18,617 (2,964)
Loss from Discontinued Operations, net of $14 in taxes........ (26) -
----------- -----------
Net Income (Loss)............................................. $ 18,591 $ (2,964)
=========== ===========
Basic Earnings (Loss) Per Common Share:
Income (Loss) from Continuing Operations................... $ 1.02 $ (0.16)
Loss from Discontinued Operations.......................... - -
----------- -----------
Net Income (Loss).......................................... $ 1.02 $ (0.16)
=========== ===========
Diluted Earnings (Loss) Per Common Share:
Income (Loss) from Continuing Operations................... $ 0.90 $ (0.16)
Loss from Discontinued Operations.......................... - -
----------- -----------
Net Income (Loss).......................................... $ 0.90 $ (0.16)
=========== ===========
Weighted Average Common Shares:
Basic...................................................... 18,248,707 18,467,580
Diluted.................................................... 21,908,283 18,467,580
The accompanying notes are an integral part of these financial statements
and should be read in conjunction herewith.
2
SEACOR HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
Three Months Ended
March 31,
------------------------------
2005 2004
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Net Cash Provided by Operating Activities.............................. $ 42,816 $ 6,370
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Cash Flows from Investing Activities:
Purchase of property and equipment.................................. (34,307) (18,818)
Proceeds from equipment sales....................................... 104,569 7,037
Purchase of available-for-sale securities........................... (21,342) (21,645)
Proceeds from sale of available-for-sale securities................. 93,880 22,717
Investments in and advances to 50% or less owned companies.......... (140) (12)
Principal payments on notes due from 50% or less owned companies.... 80 523
Dividends received from 50% or less owned companies................. 1,150 123
Net increase in construction reserve funds.......................... (888) (19,736)
Cash settlements of derivative transactions......................... 128 (71)
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Net cash provided by (used in) investing activities............... 143,130 (29,882)
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Cash Flows from Financing Activities:
Payments of long-term debt.......................................... (255) (32)
Proceeds from share award plans..................................... 2,474 433
Common stock acquired for treasury.................................. (5,561) (4,085)
Dividends paid to minority interest holders......................... (28) (41)
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Net cash used in financing activities............................. (3,370) (3,725)
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Effect of Exchange Rate Changes on Cash and Cash Equivalents........... (1,564) 1,461
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Net Increase (Decrease) in Cash and Cash Equivalents................... 181,012 (25,776)
Cash and Cash Equivalents, Beginning of Period......................... 214,389 263,135
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Cash and Cash Equivalents, End of Period............................... $ 395,401 $ 237,359
============= =============
The accompanying notes are an integral part of these financial statements
and should be read in conjunction herewith.
3
SEACOR HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. Basis of Presentation
The condensed consolidated financial information for the three months ended
March 31, 2005 and 2004 has been prepared by the Company and was not audited by
its independent registered public accounting firm. The condensed consolidated
financial statements include the accounts of SEACOR Holdings Inc. and its
majority owned subsidiaries. In the opinion of management, all adjustments
(consisting of normal recurring adjustments) have been made to present fairly
the Company's financial position as of March 31, 2005 and its results of
operations and cash flows for the three months ended March 31, 2005 and 2004.
Results of operations for the interim periods presented are not necessarily
indicative of the operating results for the full year or any future periods.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. These condensed consolidated financial
statements should be read in conjunction with the financial statements and
related notes thereto included in the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 2004.
Unless the context otherwise indicates, any references in this Quarterly Report
on Form 10-Q to the "Company" refer to SEACOR Holdings Inc. and its consolidated
subsidiaries, and any references in this Quarterly Report on Form 10-Q to
"SEACOR" refer to SEACOR Holdings Inc.
Certain reclassifications of prior period information have been made to conform
to the current period presentation.
2. Seabulk Merger
On March 16, 2005, SEACOR announced its signing of a definitive merger agreement
with Seabulk International, Inc. ("Seabulk"). The Boards of Directors of both
companies have unanimously approved the transaction. Under the terms of the
merger agreement, Seabulk's stockholders will, subject to limited adjustments,
receive 0.2694 of a share of SEACOR common stock, par value $0.01 per share
("Common Stock"), plus cash of $4.00 for each issued and outstanding share of
Seabulk common stock. In certain circumstances, the portion of the merger
consideration payable in cash may be reduced and shares of Common Stock, having
a value on the closing date equal to the cash reduction, may be substituted
therefor.
The aggregate equity value of the transaction is approximately $532.0 million,
based on SEACOR issuing 6,641,270 shares of Common Stock at a closing share
price of $65.28 on March 16, 2005 plus additional cash consideration of $98.6
million. In addition, approximately $471.0 million in net debt obligations will
be assumed by SEACOR.
The merger is expected to close in accordance with the terms of the merger
agreement by the end of the second quarter of 2005 subject to the approval by
Seabulk's stockholders of the merger, the approval of SEACOR's stockholders of
the issuance of shares of Common Stock to effect the merger, and the
satisfaction of customary closing conditions. On April 22, 2005, SEACOR was
granted early termination of the waiting period under Hart-Scott-Rodino
Antitrust Improvements Act.
3. Equipment Acquisitions and Dispositions
Equipment delivered to the Company during the three months ended March 31, 2005
included 25 new dry cargo covered hopper barges, 7 new chemical tank barges and
1 new offshore support vessel for aggregate consideration of $17.9 million. The
Company sold 10 vessels and other equipment during the three months ended March
31, 2005 for aggregate consideration of $104.6 million.
4
4. Era Aviation, Inc. Acquisition
On December 31, 2004, the Company acquired all of the issued and outstanding
shares of Era Aviation, Inc. ("Era") for $118.1 million. As a result of this
transaction, the Company acquired 81 helicopters and 16 fixed wing aircraft. The
acquired fixed wing business is presently being marketed for sale. The final
purchase price allocation has not been completed and is subject to, among other
things, working capital adjustments and the fair value determination of the
fixed wing business. The Company does not expect this transaction to result in
the recognition of goodwill.
The operating results of the fixed wing business, including $8.5 million of
operating revenues earned in the three months ended March 31, 2005, have been
reported as "Discontinued Operations" in the Company's "Statement of
Operations." At March 31, 2005, assets and related liabilities of the fixed wing
business, amounting to $23.0 million and $6.5 million, respectively, and one
acquired Era helicopter, valued at $2.1 million, were held for sale by the
Company. Held for sale assets and related liabilities have been reported in
"Prepaid expenses and other current assets" and "Other current liabilities",
respectively, in the Condensed Consolidated Balance Sheets.
5. Commitments
The Company's unfunded capital commitments as of March 31, 2005 for 4 new and 4
used offshore support vessels, 20 new dry cargo covered hopper barges, 9 new
chemical tank barges, 32 new helicopters and other equipment totaled $356.5
million. Of these commitments, the Company has the right to terminate its
purchase obligation relating to 20 helicopters without liability other than the
payment of liquidated damages. Deliveries of the offshore support vessels, dry
cargo covered hopper barges, chemical tank barges and other equipment are
expected throughout 2005. Deliveries of the 32 helicopters are expected from
2005 through 2009.
In addition to the purchase commitments discussed above, the Company has placed
refundable deposits on 13 additional new helicopters.
The Company has guaranteed the payment of amounts owed by certain of its joint
ventures under vessel charter agreements that expire through 2009. In addition,
the Company has guaranteed amounts owed by certain of its joint ventures for a
banking facility and a performance guarantee. As of March 31, 2005, the total
amount guaranteed by the Company was $15.7 million.
6. Long-Term Debt
As of March 31, 2005, the Company had $196.2 million available under its five
year, non-reducing, unsecured $200.0 million revolving credit facility that
terminates in February 2007.
7. Deferred Income Taxes
As a result of the American Jobs Creation Act of 2004, the Company believes it
will be in the position to repatriate, for a limited time, accumulated foreign
earnings at an effective federal tax rate of 5.25%, which would result in tax
obligations significantly less than the deferred taxes previously provided for
its unremitted earnings of foreign subsidiaries. The Company is exploring the
full impact of the legislation and will finalize its repatriation plan during
2005. In accordance with FASB Staff Position FAS 109-2, the Company will
recognize the income tax benefit of this special one-time dividends received
deduction during the period that the Company has decided on a plan for
repatriation.
8. Stock and Debt Repurchases
During the three months ended March 31, 2005, the Company acquired a total of
84,647 shares of Common Stock for treasury at an aggregate cost of $5.6 million.
As of March 31, 2005, $37.7 million of repurchase authority granted by the
Company's Board of Directors remains available for acquisition of additional
shares of Common Stock, the Company's 7.2% Senior Notes Due 2009 ("7.2% Notes")
and its 5-7/8% Senior Notes due 2012 ("5-7/8% Notes"). Securities are acquired
from time to time through open market purchases, privately negotiated
transactions or otherwise, depending on market conditions.
5
9. Earnings (Loss) Per Common Share
Basic earnings (loss) per common share were computed based on the weighted
average number of common shares issued and outstanding during the relevant
periods. Diluted earnings (loss) per common share were computed based on the
weighted average number of common shares issued and outstanding plus all
potentially dilutive common shares that would have been outstanding in the
relevant periods assuming the vesting of restricted stock grants and the
issuance of common shares for stock options and convertible subordinated notes
through the application of the treasury stock and if-converted methods. Diluted
earnings (loss) per common share exclude certain options and share awards,
totaling 83,560 and 327,454 in the three months ended March 31, 2005 and 2004,
respectively, as the effect of their inclusion in the computation would have
been antidilutive.
Net income Average O/S Per
(loss) Shares Share
-------------- ------------ ---------
For the Three Months Ended March 31, 2005:
Basic earnings per common share............................................. $ 18,591,000 18,248,707 $ 1.02
=========
Effect of dilutive securities -
Options and restricted stock.............................................. - 241,951
Convertible securities.................................................... 1,210,000 3,417,625
-------------- ------------
Diluted earnings per common share........................................... $ 19,801,000 21,908,283 $ 0.90
============== ============ =========
For the Three Months Ended March 31, 2004:
Basic loss per common share................................................. $ (2,964,000) 18,467,580 $ (0.16)
=========
Effect of dilutive securities -
Options and restricted stock.............................................. - -
-------------- ------------
Diluted loss per common share............................................... $ (2,964,000) 18,467,580 $ (0.16)
============== ============ =========
10. Comprehensive Income
For the three months ended March 31, 2005 and 2004, comprehensive income (loss)
was $17.6 million and ($0.9 million), respectively. Other comprehensive income
(loss) consisted of gains and losses from foreign currency translation
adjustments and unrealized holding gains and losses on available-for-sale
securities.
11. Stock Compensation
Under Statement of Financial Accounting Standards No. 123 ("SFAS 123"),
companies could either adopt a "fair value method" of accounting for its stock
based compensation plans or continue to use the "intrinsic value method" as
prescribed by APB Opinion No. 25. The Company has elected to continue accounting
for its stock compensation plans using the intrinsic value method. Had
compensation costs for the plans been determined using a fair value method
consistent with SFAS 123, the Company's net income (loss) and earnings per share
would have been reduced to the following pro forma amounts:
For the Three Months
Ended March 31,
------------------------
(in thousands, except per share data) 2005 2004
- ---------------------------------------------------------------------------------------- ----------- -----------
Net income (loss), as reported.......................................................... $ 18,591 $ (2,964)
Add: stock based compensation using intrinsic value method.............................. 419 416
Less: stock based compensation using fair value method.................................. (565) (643)
----------- -----------
Net income (loss), pro forma............................................................ $ 18,445 $ (3,191)
=========== ===========
Basic earnings (loss) per common share:
As reported........................................................................... $ 1.02 $ (0.16)
Pro forma............................................................................. 1.01 (0.17)
Diluted earnings (loss) per common share:
As reported........................................................................... $ 0.90 $ (0.16)
Pro forma............................................................................. 0.90 (0.17)
The effects of applying a fair value method consistent with SFAS 123 in this pro
forma disclosure are not indicative of future events and the Company anticipates
that it will award additional stock based compensation in future periods.
6
12. New Accounting Pronouncement
On December 16, 2004, the Financial Accounting Standards Board (FASB) issued
FASB Statement No. 123 (revised 2004), Share-Based Payment, which is a revision
of FASB Statement No. 123, Accounting for Stock-Based Compensation. Statement
123 (R) supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees,
and amends FASB Statement No. 95, Statement of Cash Flows. Statement 123 (R)
requires all share-based payments to employees, including grants of employee
stock options, to be recognized in the income statement based on their fair
values. The impact of adopting Statement 123 (R) cannot be predicted at this
time because it will depend on levels of share-based payments granted in the
future. However, had the Company adopted Statement 123 (R) in prior periods, the
impact of that standard would have approximated the impact of the SFAS 123
disclosure of pro forma net income and earnings per share presented in Note 11.
The Company will adopt the provisions of Statement 123 (R) on January 1, 2006
using the "modified prospective" approach, recognizing compensation expense for
all unvested employee stock options as of that date and for all subsequent
employee stock options granted thereafter.
13. Segment Information
Accounting standards require public business enterprises to report information
about each of their operating business segments that exceed certain quantitative
thresholds or meet certain other reporting requirements. Operating business
segments have been defined as a component of an enterprise about which separate
financial information is available and is evaluated regularly by the chief
operating decision maker in deciding how to allocate resources and in assessing
performance. Certain reclassifications of prior period information have been
made to conform to the current period's reportable segment presentation. The
Company's basis of measurement of segment profit or loss has not changed from
those previously described in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2004.
Offshore Inland
Marine Environmental River Helicopter
(in thousands) Services Services Services Services Other Total
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For the Three Months Ended March 31, 2005
- ------------------------------------------
Operating Revenues:
External customers........................... $ 80,324 $ 35,893 $ 25,530 $ 21,236 $ 2,202 $ 165,185
Intersegment................................. 26 - - 363 74 463
----------- ----------- ----------- ----------- ----------- -----------
80,350 35,893 25,530 21,599 2,276 165,648
Operating expenses............................. (52,850) (26,655) (14,772) (20,333) (1,454) (116,064)
Administrative and general..................... (7,501) (3,811) (508) (2,180) (401) (14,401)
Depreciation and amortization.................. (10,670) (860) (2,597) (4,066) - (18,193)
Gains (losses) on asset sales.................. 12,923 (3) 11 585 - 13,516
Other income (expense), primarily
foreign currency............................. (540) 7 (65) 72 50 (476)
Equity in earnings of 50% or less owned
companies..................................... 1,096 291 - - 230 1,617
----------- ----------- ----------- ----------- ----------- -----------
Reportable Segment Profit (Loss)............... $ 22,808 $ 4,862 $ 7,599 $ (4,323) $ 701 31,647
=========== =========== =========== =========== ===========
Corporate...................................... (4,188)
Other income (expense) not included above...... 859
Equity in earnings of 50% or less owned
companies..................................... (1,617)
Segment eliminations........................... 5
-----------
Income before Minority Interest, Taxes
and Equity Earnings....................... $ 26,706
===========
For the Three Months Ended March 31, 2004
- -------------------------------------------
Operating Revenues:
External customers........................... $ 65,974 $ 16,392 $ 8,576 $ 5,032 $ - $ 95,974
Intersegment................................. 42 - - 795 - 837
----------- ----------- ----------- ----------- ----------- -----------
66,016 16,392 8,576 5,827 - 96,811
Operating expenses............................. (51,392) (12,219) (5,990) (6,207) - (75,808)
Administrative and general..................... (8,498) (2,669) (408) (635) (2) (12,212)
Depreciation and amortization.................. (11,071) (547) (1,235) (1,026) - (13,879)
Gains (losses) on asset sales.................. 3,420 (3) 73 148 - 3,638
Other income (expense), primarily foreign
currency...................................... 556 (2) - - - 554
Equity in earnings of 50% or less owned
companies..................................... 1,336 - - - (766) 570
----------- ----------- ----------- ----------- ----------- -----------
Reportable Segment Profit (Loss)............... $ 367 $ 952 $ 1,016 $ (1,893) $ (768) (326)
=========== =========== =========== =========== ===========
Corporate...................................... (3,005)
Other income (expense) not included above...... (1,140)
Equity in earnings of 50% or less owned
companies..................................... (570)
-----------
Loss before Minority Interest, Taxes
and Equity Earnings....................... $ (5,041)
===========
7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Certain statements discussed in Item 2 (Management's Discussion and Analysis of
Financial Condition and Results of Operations), Item 3 (Quantitative and
Qualitative Disclosures About Market Risk) and elsewhere in this Form 10-Q
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
concerning management's expectations, strategic objectives, business prospects,
anticipated economic performance and financial condition and other similar
matters involve known and unknown risks, uncertainties and other important
factors that could cause the actual results, performance or achievements of
results to differ materially from any future results, performance or
achievements discussed or implied by such forward-looking statements. Such
risks, uncertainties and other important factors include, among others: the
cyclical nature of the oil and gas industry, the operation of Offshore Marine
Services and Helicopter Services in a highly competitive environment, changes in
foreign political, military and economic conditions, the dependence of Offshore
Marine Services and Helicopter Services on several customers, industry fleet
capacity, the ongoing need to replace aging vessels, restrictions imposed by the
Shipping Acts and Aviation Acts on the amount of foreign ownership of the
Company's Common Stock, safety record requirements related to Offshore Marine
Services and Helicopter Services, changes in foreign and domestic oil and gas
exploration and production activity, vessel and helicopter-related risks of
Offshore Marine Services and Helicopter Services, effects of adverse weather
conditions and seasonality on Helicopter Services, dependence of spill response
revenue on the number and size of spills and upon continuing government
regulation in this area and our ability to comply with such regulation and other
governmental regulation, changes in NRC's OSRO classification, effects of
adverse weather and river conditions and seasonality on inland river operations,
the level of grain export volume, the effect of fuel prices on barge towing
costs, variability in freight rates for inland river barges, liability in
connection with providing spill response services, the effect of international
economic and political factors in inland river operations, the intense
competition faced by Inland River Services, adequacy of insurance coverage,
currency exchange fluctuations, the attraction and retention of qualified
personnel by the Company, and various other matters, many of which are beyond
the Company's control and other factors as described at the end of Item 7
(Management's Discussion and Analysis of Financial Condition and Results of
Operations) of the Company's Form 10-K for the fiscal year ended December 31,
2004. The words "expect," "anticipate," "estimate," "project," "intend,"
"believe," "plan" and similar expressions are intended to identify
forward-looking statements. Forward-looking statements speak only as of the date
of the document in which they are made. We disclaim any obligation or
undertaking to provide any updates or revisions to any forward-looking statement
to reflect any change in our expectations or any change in events, conditions or
circumstances on which the forward-looking statement is based.
CONSOLIDATED RESULTS OF OPERATIONS
For the Three Months Ended March 31,
--------------------------------------------
2005 2004 % Chg
--------------------- --------------------- ----------
(in thousands) Amount Percent Amount Percent 05 / 04
- ----------------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
Operating Revenues:
Offshore Marine Services....................................... $ 80,350 49% $ 66,016 69% 22%
Environmental Services......................................... 35,893 22% 16,392 17% 119%
Inland River Services.......................................... 25,530 15% 8,576 9% 198%
Helicopter Services............................................ 21,599 13% 5,827 6% 271%
Other and Eliminations......................................... 1,813 1% (837) (1)% 317%
---------- ---------- ---------- ----------
$ 165,185 100% $ 95,974 100% 72%
========== ========== ========== ==========
Operating income (loss)........................................... $ 26,323 16% $ (4,455) (4)% 691%
Other income (expense), net....................................... 383 0% (586) (1)% 165%
---------- ---------- ---------- ----------
Income (loss) before taxes, minority interest and equity earnings. 26,706 16% (5,041) (5)% 630%
Income tax expense (benefit)...................................... 9,740 6% (1,502) 1% 748%
---------- ---------- ---------- ----------
Income (loss) before minority interest and equity earnings........ 16,966 10% (3,539) (4)% 579%
Minority interest................................................. 34 0% 5 0% 580%
Equity earnings................................................... 1,617 1% 570 1% 184%
---------- ---------- ---------- ----------
Income (loss) from continuing operations.......................... 18,617 11% (2,964) (3)% 728%
Loss from discontinued operations, net of tax of $14.............. (26) 0% - 0% 100%
---------- ---------- ---------- ----------
Net income (loss)................................................. $ 18,591 11% $ (2,964) (3)% 727%
========== ========== ========== ==========
8
Overview
The table above provides an analysis of the Company's consolidated statements of
operations for each quarter indicated. See "Item 1. Financial Statements - Note
13. Segment Information" included in Part I for additional financial information
about the Company's business segments. Additional discussions of results of
operations by business segment are presented below. The Company's operations are
divided among the following four business segments: "Offshore Marine Services;"
"Environmental Services;" "Inland River Services;" and "Helicopter Services."
The Company also has activities that are referred to and described under
"Other." "Other" primarily includes equity in earnings of 50% or less owned
companies unrelated to our reportable business segments and our "Fixed Base
Operation" acquired in the December 31, 2004 Era acquisition (as described in
Note 4 to the financial statements). Our Fixed Base Operation sells fuel and
ground services to transient corporate aircraft at the Ted Stevens Anchorage
International Airport.
Consolidated operating revenues increased 72%, or $69.2 million, to $165.2
million in the three months ended March 31, 2005 ("Current Year Quarter") from
the three months ended March 31, 2004 ("Prior Year Quarter"). Market conditions
improved and gains from the sale of vessels increased in Offshore Marine
Services. Spill response activities increased in Environmental Services. A
significant number of new barges were acquired and entered operations in Inland
River Services. Fleet size also grew significantly in Helicopter Services,
primarily resulting from the Era acquisition.
In the Current Year Quarter, consolidated net income was $18.6 million as
compared to a consolidated net loss of $3.0 million in the Prior Year Quarter.
Increased operating profits earned by Offshore Marine Services, Environmental
Services and Inland River Services were partly offset by increased operating
losses of Helicopter Services. The Company's equity interest in the earnings of
50% or less owned companies also improved in the Current Year Quarter due
principally to increased Offshore Marine Services' joint venture profits.
Offshore Marine Services
For the Three Months Ended March 31,
-------------------------------------
2005 2004
------------------ -----------------
(in thousands) Amount Percent Amount Percent
- ------------------------------------------------------------------------------ -------- ------- --------- -------
Operating Revenues:
United States, primarily Gulf of Mexico.................................. $ 40,640 51% $ 28,342 43%
North Sea................................................................ 18,033 22% 16,935 26%
Africa, primarily West Africa ........................................... 12,552 16% 12,488 19%
Latin America and Mexico................................................. 5,360 7% 5,035 8%
Asia..................................................................... 3,279 4% 2,858 4%
Other Foreign............................................................ 486 0% 358 0%
-------- ------- --------- -------
$ 80,350 100% $ 66,016 100%
======== ======= ========= =======
Operating Income (Loss).................................................... $ 22,252 28% $ (1,525) (2)%
======== ======= ========= =======
Operating Revenues. Operating revenues increased significantly in the Current
Year Quarter. Rates per day worked improved worldwide. Utilization improved for
vessels in many of our operating regions. Operating revenues also improved as a
result of fleet modernization, a net increase in the number of vessels entering
time charter-out service upon concluding bareboat-out charter arrangements and a
strengthening between years in the Pound Sterling currency relative to the U.S.
dollar with respect to Offshore Marine Services' North Sea operations.
Operating Income (Loss). Operating income improved due to those factors
affecting operating revenues, a $9.5 million increase in gains on asset sales
and a $0.9 million decline in administrative and general expenses that resulted
from staff reductions. Improved operating income was partly offset by increased
vessel operating expenses between years due principally to increased (i) seamen
redundancy costs associated with workforce reductions, (ii) repair and
maintenance expenses on towing and anchor handling towing supply vessels and
(iii) fuel costs associated with the Company's North Sea operations.
Although reported operating revenues increased due to the strengthening in the
Pound Sterling currency relative to the U.S. dollar, currency exchange rate
fluctuations had no material effect on operating income, because Offshore Marine
Services also pays its North Sea expenses in Pounds Sterling.
9
The table below sets forth operational data for Offshore Marine Services during
the periods indicated.
Three Months Ended
March 31,
------------------------
2005 2004
----------- ------------
Rates Per Day Worked ($):
Anchor Handling Towing Supply - Domestic............................................. 20,226 15,888
Anchor Handling Towing Supply - Foreign.............................................. 10,848 8,524
Crew - Domestic...................................................................... 3,842 3,040
Crew - Foreign....................................................................... 4,583 4,070
Mini-supply - Domestic............................................................... 3,088 2,919
Mini-supply - Foreign................................................................ 5,171 3,477
Other................................................................................ 17,000 -
Standby safety - Foreign............................................................. 8,229 7,694
Supply - Domestic.................................................................... 7,924 6,300
Supply - Foreign..................................................................... 13,786 9,067
Towing - Domestic.................................................................... 9,061 6,055
Towing - Foreign..................................................................... 6,959 6,586
Overall Utilization (%):
Anchor Handling Towing Supply - Domestic............................................. 91.3 68.2
Anchor Handling Towing Supply - Foreign.............................................. 73.2 61.5
Crew - Domestic...................................................................... 86.7 79.8
Crew - Foreign....................................................................... 83.6 93.6
Mini-supply - Domestic............................................................... 81.5 81.5
Mini-supply - Foreign................................................................ 16.1 82.8
Other................................................................................ 33.3 -
Standby safety - Foreign............................................................. 90.2 87.0
Supply - Domestic.................................................................... 74.5 71.7
Supply - Foreign..................................................................... 68.8 73.4
Towing - Domestic.................................................................... 83.9 56.7
Towing - Foreign..................................................................... 90.5 67.4
Overall Fleet..................................................................... 83.5 78.6
Available Days:
Anchor Handling Towing Supply - Domestic............................................. 470 304
Anchor Handling Towing Supply - Foreign.............................................. 704 724
Crew - Domestic...................................................................... 5,335 4,823
Crew - Foreign....................................................................... 1,448 1,365
Mini-supply - Domestic............................................................... 2,330 2,457
Mini-supply - Foreign................................................................ 134 273
Other................................................................................ 90 91
Standby safety - Foreign............................................................. 1,890 1,911
Supply - Domestic.................................................................... 548 790
Supply - Foreign..................................................................... 620 910
Towing - Domestic.................................................................... 360 273
Towing - Foreign..................................................................... 810 1,026
----------- ------------
Overall Fleet........................................................................ 14,739 14,947
=========== ============
Fleet Count:
Anchor Handling Towing Supply........................................................ 21 19
Crew................................................................................. 81 86
Mini-supply.......................................................................... 29 32
Other................................................................................ 2 2
Standby safety....................................................................... 27 27
Supply............................................................................... 14 25
Towing............................................................................... 33 37
----------- ------------
207 228
=========== ============
10
Environmental Services
For the Three Months Ended March 31,
-------------------------------------------
2005 2004
--------------------- ----------------------
(in thousands) Amount Percent Amount Percent
- --------------------------------------------------------------------------- ---------- ---------- ---------- ----------
Operating Revenues:
United States............................................................ $ 31,298 87% $ 15,517 95%
Foreign.................................................................. 4,595 13% 875 5%
---------- ---------- ---------- ----------
35,893 100% 16,392 100%
========== ========== ========== ==========
Operating Income........................................................... $ 4,564 13% $ 954 6%
========== ========== ========== ==========
Operating Revenues. Results improved in the Current Year Quarter due largely to
increased spill response activities, retainer fees and expanded services
internationally. Environmental Services continued its response in the Current
Year Quarter to a major oil spill on the Delaware River that began in December
2004. Activities connected with that spill declined from the fourth quarter of
2004 and are expected to continue at lower levels in the second quarter of 2005.
Retainer fees charged by the Company for ensuring by contract the availability
of Environmental Services' response services and equipment to customers were
increased in the Current Year Quarter. Environmental Services now also provides
oil spill response services in the Caspian region.
The operating results of Environmental Services are very dependent on the number
of spill responses in a given period and the magnitude of each spill.
Consequently, spill response revenues and related income can vary materially
between comparable periods, and the operating revenues earned in any one period
are not indicative of a trend or of anticipated results in future periods. Spill
response activities approximated 51% of Environmental Services operating
revenues in the Current Year Quarter as compared to 27% in the Prior Year
Quarter.
Operating Income. Operating income increased in the Current Year Quarter due to
improved operating revenues and profitability on spill response and retainer
activities.
Inland River Services
For the Three Months Ended March 31,
-------------------------------------------
2005 2004
-------------------- ----------------------
(in thousands) Amount Percent Amount Percent
- --------------------------------------------------------------------------- ---------- --------- ---------- -----------
Operating Revenues, U.S. only.............................................. $ 25,530 100% $ 8,576 100%
========== ========== ========== ==========
Operating Income........................................................... $ 7,664 30% $ 1,016 12%
========== ========== ========== ==========
Operating Revenues. Results improved in the Current Year Quarter due largely to
fleet additions and improved freight rates. Inland River Services' owned and
chartered-in barge fleet grew approximately 60% from 564 barges at March 31,
2004 to 901 barges at March 31, 2005. Inland River Services also acquired a
majority interest in 3 towboats in July 2004. Freight rates improved as a result
of increased demand for non-grain shipping capacity and a decline in barge
availability within the industry caused by adverse river conditions.
Operating Income. Operating income increased in the Current Year Quarter due to
barge fleet expansion and improved profitability that resulted from increased
freight rates. These operating income improvements were partly offset by higher
operating expenses. Towing expenses increased in the Current Year Quarter due
primarily to higher fuel costs.
11
Helicopter Services
For the Three Months Ended March 31,
--------------------------------------------
2005 2004
--------------------- ----------------------
(in thousands) Amount Percent Amount Percent
---------- ---------- ---------- ----------
Operating Revenues, U.S. only.............................................. $ 21,599 100% $ 5,827 100%
========== ========== ========== ==========
Operating Loss............................................................. $ (4,395) (20%) $ (1,893) (32%)
========== ========== ========== ==========
Operating Revenues. Fleet expansion resulting primarily from the December 31,
2004 Era acquisition improved operating revenues in the Current Year Quarter.
Era owned 81 helicopters at acquisition.
Operating Loss. Due to the seasonal nature of tourism in Alaska, 19 helicopters
were idle for most of the winter. In addition, 10 helicopters customarily
engaged in fire-fighting service during the summer months were idle for most of
the Current Year Quarter. Helicopter Services also schedules maintenance during
the off-season for these 29 helicopters and hence maintains its staff to prepare
this equipment for spring and summer operations. Inventory is used in
conjunction with this preparation and its cost is expensed during the period in
which it is consumed. The Current Year Quarter includes approximately $0.7
million of nonrecurring charges, principally associated with the integration of
Era.
Other and Corporate, included in Operating Income
For the Three Months Ended March 31,
--------------------------------------------
2005 2004
--------------------- ----------------------
(in thousands) Amount Percent Amount Percent
---------- ---------- ---------- ----------
Fixed Base Operation....................................................... $ 421 (11%) $ - 0%
Corporate expenses......................................................... (4,183) 111% (3,007) 100%
---------- ---------- ---------- ----------
$ (3,762) 100% $ (3,007) 100%
========== ========== ========== ==========
Other and Corporate. Fixed Base Operation, acquired in the December 31, 2004 Era
acquisition, sells fuel and provides ground services to transient corporate
aircraft at the Ted Stevens Anchorage International Airport. Corporate expenses
increased in the Current Year Quarter due to increased business development,
public filing and incentive based compensation plan costs.
Other income (expense), net
For the Three Months Ended
March 31,
--------------------------------
(in thousands) 2005 2004
- -------------------------------------------------------------------------------- -------------- --------------
Net interest expense....................................................... $ (3,912) $ (3,999)
Derivative income (loss), net.............................................. (1,590) 79
Foreign currency transaction gains (losses), net........................... (549) 466
Marketable securities sale gains, net...................................... 6,234 2,749
Other, net................................................................. 200 119
-------------- --------------
$ 383 $ (586)
============== ==============
Net interest expense. Net interest expense remained steady in the Current Year
Quarter. Increased interest income on temporary cash investments was offset by
increased interest expense primarily resulting from the Company's sale in
December 2004 of $250.0 million of its 2.875% convertible senior debentures.
Derivative income (loss), net. Derivative transactions, primarily related to
foreign currency contracts, resulted in losses in the Current Year Quarter as
compared to income in the Prior Year Quarter.
Foreign currency transaction gains (losses), net. Foreign currency transaction
gains and losses resulted from the effect of currency exchange rate changes with
respect to loans between SEACOR and certain of its foreign subsidiaries and
other transactions denominated in currencies other than the functional currency
of various subsidiaries.
Marketable securities sale gains, net. Marketable securities sale gains in the
Current Year Quarter and Prior Year Quarter included net gains from the sale of
equity and fixed income marketable securities and short-sale positions.
12
Income Taxes
As a result of the American Jobs Creation Act of 2004, the Company believes it
will be in the position to repatriate, for a limited time, accumulated foreign
earnings at an effective federal tax rate of 5.25%, which would result in tax
obligations significantly less than the deferred taxes previously provided for
its unremitted earnings of foreign subsidiaries. The Company is exploring the
full impact of the legislation and will finalize its repatriation plan during
2005. In accordance with FASB Staff Position FAS 109-2, the Company will
recognize the income tax benefit of this special one-time dividends received
deduction during the period that the Company has decided on a plan for
repatriation.
Loss from Discontinued Operations
On December 31, 2004, the Company acquired 16 fixed wing aircraft in the Era
acquisition. Management has committed to the disposal of this fixed wing
business and is actively marketing it for sale. Its operating results, a slight
loss during the Current Year Quarter, have been reported as "Discontinued
Operations" in the Consolidated Results of Operations. At March 31, 2005, assets
and related liabilities of the fixed wing business, amounting to $23.0 million
and $6.5 million, respectively, and one acquired Era helicopter, valued at $2.1
million, were held for sale by the Company. Held for sale assets and related
liabilities have been reported in "Prepaid expenses and other current assets"
and "Other current liabilities", respectively, in the Condensed Consolidated
Balance Sheets.
LIQUIDITY AND CAPITAL RESOURCES
General
The Company's ongoing liquidity requirements arise primarily from the funding of
working capital needs, acquisition, construction or improvement of equipment,
repayment of debt obligations, repurchase of Common Stock and purchase of other
investments. Principal sources of liquidity are cash balances, marketable
securities, construction reserve funds, cash flows from operations and
borrowings under the Company's revolving credit facility although, from time to
time, the Company may issue debt, shares of Common Stock, preferred stock, or a
combination thereof, or sell vessels and other assets to finance the acquisition
of equipment and businesses or make improvements to existing equipment. Fleet
size, rates of hire and utilization of the Company's offshore support vessels,
inland barges and helicopters and the number and severity of oil spills managed
by Environmental Services primarily determine the Company's levels of operating
cash flows.
Summary of Cash Flows
For the Three Months Ended
March 31,
-------------------------------
(in thousands) 2005 2004
- ------------------------------------------------------------------------------- -------------- --------------
Cash flows provided by or (used) in:
Operating activities...................................................... $ 42,816 $ 6,370
Investing activities...................................................... 143,130 (29,882)
Financing activities...................................................... (3,370) (3,725)
Effect of exchange rate changes on cash..................................... (1,564) 1,461
-------------- --------------
Net increase (decrease) in cash and cash equivalents........................ $ 181,012 $ (25,776)
============== ==============
Operating Activities
Cash flows from operating activities increased in the Current Year Quarter due
primarily to improved operating results in Offshore Marine Services,
Environmental Services and Inland River Services (see Consolidated Results of
Operations discussion above), and the favorable effect of changes in working
capital.
Investing Activities
Cash flows from investing activities increased in the Current Year Quarter
primarily from increased proceeds from equipment and marketable securities sales
and decreased deposits in construction reserve funds for future purchase of
vessels or barges. These additional cash flows were partially offset by an
increase in equipment purchases. The Company sold 10 vessels and other equipment
and acquired 25 new dry cargo covered hopper barges, 7 new chemical tank barges
and 1 new offshore support vessel in the Current Year Quarter.
13
The Company's unfunded capital commitments as of March 31, 2005 for 4 new and 4
used offshore support vessels, 20 new dry cargo covered hopper barges, 9 new
chemical tank barges, 32 new helicopters and other equipment totaled $356.5
million. Of these commitments, the Company has the right to terminate its
purchase obligation relating to 20 helicopters without liability other than the
payment of liquidated damages. Deliveries of the offshore support vessels, dry
cargo covered hopper barges, chemical tank barges and other equipment are
expected throughout 2005. Deliveries of the 32 helicopters are expected from
2005 through 2009.
In addition to the purchase commitments discussed above, the Company has placed
refundable deposits on 13 additional new helicopters.
Financing Activities
Cash flows used in financing activities are comparable between periods.
Additional cash used to purchase Common Stock was offset by additional cash
received on exercise of stock options.
During the three months ended March 31, 2005, the Company acquired a total of
84,647 shares of Common Stock for treasury at an aggregate cost of $5.6 million.
As of March 31, 2005, $37.7 million of repurchase authority granted by the
Company's Board of Directors remains available for acquisition of additional
shares of Common Stock and the Company's 7.2% Notes and its 5-7/8% Notes.
Securities are acquired from time to time through open market purchases,
privately negotiated transactions or otherwise, depending on market conditions.
Financial Position
Total assets of the Company increased 1% to $1.8 billion at quarter end. The
Company's combined cash, available-for-sale securities and construction reserve
funds increased 24% to $615.2 million and represented 35% of total assets at
quarter end. Net property and equipment decreased 9% to $845.4 million and
represented 48% of total assets at quarter end. Net working capital increased
20% to $545.5 million. Long-term debt remained constant at $582.4 million
between March 31, 2005 and December 31, 2004.
As of March 31, 2005, the Company had $196.2 million available under a five
year, non-reducing, unsecured $200.0 million revolving credit facility that
terminates in February 2007.
Short and Long-Term Liquidity Requirements
The Company anticipates it will continue to generate positive cash flows from
operations in the near term and these cash flows will be adequate to meet the
Company's working capital requirements and contribute toward defraying costs of
its capital expenditures. As in the past and in further support of the Company's
acquisition and capital expenditure programs, the Company intends to sell
vessels, enter into sale and leaseback transactions for vessels, utilize
construction reserve funds, utilize borrowing capacity under its revolving
credit facility, or a combination thereof. To the extent the Company relies on
existing cash balances, proceeds from the sale of available-for-sale securities
or construction reserve funds, the Company's liquidity would be reduced.
The Company's long-term liquidity is dependent upon its ability to generate
operating cash flows sufficient to meet its requirements for working capital,
capital expenditures and a reasonable return on shareholders' investment. The
Company believes that earning such operating profits will permit it to maintain
its access to favorably priced debt, equity and off-balance sheet financing
arrangements.
Seabulk Merger
On March 16, 2005, SEACOR and Seabulk International, Inc. announced that they
had signed a definitive merger agreement. The Boards of Directors of both
companies unanimously approved the transaction. Under the terms of the merger
agreement, Seabulk's stockholders will, subject to limited adjustments, receive
0.2694 of a share of Common Stock plus cash of $4.00 for each issued and
outstanding share of Seabulk common stock, which represents a 29% premium over
Seabulk's closing share price on March 16, 2005 (based on SEACOR's closing share
price on such date). In certain circumstances, the portion of the merger
consideration payable in cash may be reduced and shares of Common Stock, having
a value on the closing date equal to the cash reduction, may be substituted
therefor.
14
The aggregate equity value of the transaction is approximately $532.0 million,
based on SEACOR issuing 6,641,270 shares of Common Stock at a closing share
price of $65.28 on March 16, 2005 plus additional cash consideration of $98.6
million. In addition, approximately $471.0 million in net debt obligations will
be assumed by SEACOR. Cash required of SEACOR to complete the merger with
Seabulk is estimated at $108 million, including approximately $9.0 million of
transaction fees and expenses. SEACOR expects to use existing cash balances,
borrowings under its revolving credit facility, or a combination thereof to fund
the cash requirements of the merger with Seabulk.
The merger is expected to close by the end of the second quarter of 2005,
subject to approval by Seabulk's stockholders of the merger and SEACOR's
stockholders of the issuance of shares of Common Stock in the merger and the
satisfaction of customary closing conditions, in accordance with terms of the
merger agreement. As part of the transaction, entities associated with DLJ
Merchant Banking Partners III, L.P. and Carlyle/Riverstone Global Energy and
Power Fund I, L.P., who collectively own approximately 75% of Seabulk's common
shares, have entered into an agreement to support the transaction.
On April 22, 2005, SEACOR and Seabulk announced that they had been granted early
termination of the waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act. This means that one of the key conditions for the closing of
the merger agreement between the two companies has been satisfied.
In connection with the proposed merger, SEACOR has filed with the Securities and
Exchange Commission a Registration Statement on Form S-4 that includes a joint
proxy statement of SEACOR and Seabulk and that also constitutes a prospectus for
Common Stock to be issued in the merger.
With a fleet of 147 vessels, including 10 Jones Act U.S. product tankers, 2
foreign-flag product tankers, 109 offshore support vessels and 26 tugs, Seabulk
is a leading provider of marine support and transportation services, primarily
to the energy and chemical industries.
Contingencies
In the normal course of its business, the Company becomes involved in various
litigation matters including, among other things, claims by third parties for
alleged property damages, personal injuries and other matters. While the Company
believes it has meritorious defenses against these claims, management has used
estimates in determining the Company's potential exposure and has recorded
reserves in its financial statements related thereto where appropriate. It is
possible that a change in the Company's estimates of that exposure could occur,
but the Company does not expect such changes in estimated costs will have a
material effect on the Company's financial position or results of its
operations.
New Accounting Pronouncement
On December 16, 2004, the Financial Accounting Standards Board (FASB) issued
FASB Statement No. 123 (revised 2004), Share-Based Payment, which is a revision
of FASB Statement No. 123, Accounting for Stock-Based Compensation. Statement
123 (R) supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees,
and amends FASB Statement No. 95, Statement of Cash Flows. Statement 123 (R)
requires all share-based payments to employees, including grants of employee
stock options, to be recognized in the income statement based on their fair
values. The impact of adopting Statement 123 (R) cannot be predicted at this
time because it will depend on levels of share-based payments granted in the
future. However, had the Company adopted Statement 123 (R) in prior periods, the
impact of that standard would have approximated the impact of the SFAS 123
disclosure of pro forma net income and earnings per share presented in note 11
of the condensed consolidated financial statements included in Item 1 of this
Quarterly Report. The Company will adopt the provisions of Statement 123 (R) on
January 1, 2006 using the "modified prospective" approach, recognizing
compensation expense for all unvested employee stock options as of that date and
for all subsequent employee stock options granted thereafter.
15
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There has been no significant change in the Company's exposure to market risk
during the three-month period ended March 31, 2005. For discussion of the
Company's exposure to market risk, refer to Item 7A, Quantitative and
Qualitative Disclosures about Market Risk, contained in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 2004.
ITEM 4. CONTROLS AND PROCEDURES
The Company's management, with the participation of the Company's Chief
Executive Officer and Chief Financial Officer, has evaluated the effectiveness
of the Company's disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")), as of March 31, 2005. Based on their evaluation, the
Company's Chief Executive Officer and Chief Financial Officer concluded that the
Company's disclosure controls and procedures were effective as of March 31,
2005.
In conducting management's evaluation of the effectiveness of the Company's
internal control over financial reporting, the operations of Era, acquired on
December 31, 2004, were excluded. This business constituted $122.7 million and
$111.3 million of total and net assets, respectively, as of March 31, 2005 and
$26.2 million and $2.0 million of operating revenues and net loss, respectively,
for the three months ended March 31, 2005.
There has been no change in the Company's internal control over financial
reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act)
that occurred during the Company's fiscal quarter ended March 31, 2005, that has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.
16
PART II - OTHER INFORMATION
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
(c) This table provides information with respect to purchases by the Company of
shares of its Common Stock during the Current Year Quarter:
Period Total Average Price Total Number of Shares Approximate Dollar
Number of Paid per Share Purchased as Part of Value of Shares that
Shares Publicly Announced May Yet Be Purchased
Purchased Plans or Programs (1) Under Plans or Programs (1)
-------------------------------------------------------------------------------------------------------------
January 1 - 31, 2005 - - - $43,264,000
February 1 - 28, 2005 7,687 $62.95 7,687 $42,781,000
March 1 - 31, 2005 76,960 $65.97 76,960 $37,704,000
----------- -----------
Total 84,647 $65.69 84,647
(1) Beginning in February 1997 and extended at various times through
November 2003, the Board of Directors authorized the repurchase of
$347.0 million of Common Stock, debt or combination thereof. Through
March 31, 2005, the Company has repurchased $231.1 million and $78.2
million of common stock and debt, respectively.
ITEM 6. EXHIBITS
31.1 Certification of Chief Executive Officer pursuant to Rule
13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as
amended.
31.2 Certification of Chief Financial Officer pursuant to Rule
13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as
amended.
32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SEACOR Holdings Inc.
(Registrant)
DATE: MAY 10, 2005 By: /s/ Charles Fabrikant
------------------------------------------
Charles Fabrikant, Chairman of the Board,
President and Chief Executive Officer
(Principal Executive Officer)
DATE: MAY 10, 2005 By: /s/ Randall Blank
------------------------------------------
Randall Blank, Executive Vice President,
Chief Financial Officer and Secretary
(Principal Financial Officer)
17
EXHIBIT INDEX
31.1 Certification of Chief Executive Officer pursuant to Rule
13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as
amended.
31.2 Certification of Chief Financial Officer pursuant to Rule
13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as
amended.
32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
18