SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED SEPTEMBER 30, 1995
Commission file number 0-5567
SEAL FLEET, INC.
(Exact name of registrant as specified in its charter)
Nevada 74-1670096
(State of Incorporation) (IRS Employer ID No.)
3305 Avenue S
Galveston, Texas 77550
(Address of principal executive offices) (Zip Code)
(409) 763-8878
(issuer's telephone number)
Indicate by check mark whether the registrant (1) 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
--- ---
Class A common stock, par value $.10 per share, 2,432,248 shares
outstanding as of September 30, 1995.
Class B common stock, par value $.10 per share, 50,000 shares
outstanding as of September 30, 1995.
<PAGE>
INDEX
Part I. Financial Information
Condensed Consolidated Balance Sheets
Condensed Consolidated Statements of
Operations
Condensed Consolidated Statements of Cash
Flows
Notes to Consolidated Financial Statements
Management's Discussion and Analysis of the
Statements of Operations
Part II. Other Information
<PAGE>
PART I. FINANCIAL INFORMATION
<TABLE>
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands of dollars)
(Unaudited)
<CAPTION>
September 30 December 31
1995 1994
ASSETS
<S> <C> <C>
Current Assets
Cash $ 973 $ 561
Accounts receivable - trade 3,609 5,483
Accounts receivable - related party 1,115 1,771
Accounts receivable - other 97 84
Materials and supplies 66 243
Deferred drydocking costs 332 113
Other current assets 75 31
Total current assets 6,267 8,286
PROPERTY AND EQUIPMENT
Ships 9,922 9,922
Furniture and equipment 238 214
Leasehold improvements 124 120
------- -------
Total property and equipment 10,284 10,256
Less accumulated depreciation 7,415 7,016
------- -------
Property and equipment--net 2,869 3,240
OTHER ASSETS
Deferred drydocking costs--non current 83 83
Assets held for resale 154 154
Other assets 46 42
-------- --------
$ 9,419 $ 11,805
======== ========
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands of dollars)
(Unaudited)
<CAPTION>
September 30 December 31
1995 1994
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities
Current portion of long-term debt
to related party $ 7,021 $ 7,022
Accounts payable - trade 2,691 4,848
Accrued interest expense 967 772
-------- --------
Total current liabilities 10,679 12,642
Long-term debt to related party
less current portion 2,396 2,668
-------- --------
Total liabilities 13,075 15,310
SHAREHOLDERS' EQUITY
Class A common stock, $.10 par
value; 3,700,000 shares author-
ized and 2,432,248 shares
issued in 1995 and 1994 243 243
Class B common stock, $.10 par
value; 50,000 shares author-
ized, issued and outstanding 5 5
Additional paid-in capital 4,456 4,456
Retained deficit (8,230) (8,079)
Class A common stock held in
treasury at cost; 447,621 shares
in 1995 and 1994 (130) (130)
-------- --------
Total shareholders' equity (3,656) (3,505)
-------- --------
$ 9,419 $ 11,805
======== ========
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands of dollars except per share amounts)
(Unaudited)
<CAPTION>
Three months ended Nine months ended
September 30 September 30
1995 1994 1995 1994
REVENUES
<S> <C> <C> <C> <C>
Charter revenue $ 1,465 $ 1,555 $ 4,327 $ 4,753
Operating fees 83 70 238 255
Crewing fees 7 19 26 49
Travel agency commissions 116 105 234 272
------- ------- ------- -------
Total revenues 1,671 1,749 4,825 5,329
COST AND EXPENSE
Operating expense 656 643 2,147 1,945
Drydock amortization 63 87 260 261
Selling, general and
administrative expense 451 499 1,337 1,497
Selling, general and
administrative expense-
travel agency 70 56 218 169
Depreciation 136 136 409 407
Interest expense 202 213 610 641
Other (income) and expense (5) (11) (5) (73)
------- ------- ------- -------
Total cost and expense 1,573 1,623 4,976 4,847
NET INCOME (LOSS) BEFORE
PROVISION FOR FEDERAL
INCOME TAX 98 126 (151) 482
Provision for federal
income tax 4 12
------- ------- ------- -------
NET INCOME (LOSS) AFTER
PROVISION FOR FEDERAL
INCOME TAX $ 98 $ 122 $ (151) $ 470
======= ======= ======= =======
NET INCOME (LOSS) PER SHARE $ .05 $ .06 $ (.07) $ .23
======= ======= ======= =======
WEIGHTED AVERAGE
SHARES OUTSTANDING 2,035,000 2,035,000 2,035,000 2,035,000
========= ========= ========= =========
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands of dollars)
(Unaudited)
<CAPTION>
Nine months ended
September 30
1995 1994
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ (151) $ 470
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation 409 407
Changes in operating assets
and liabilities:
Accounts and notes receivable 2,517 (192)
Other current assets (85) 280
Accounts payable--trade (2,157) (1,505)
Interest payable 195 234
------- -------
Net cash provided (required)
by operating activities 728 (306)
INVESTING ACTIVITIES
Purchase of property and equipment ( 52) (27)
Proceeds from sale of assets 13
Decrease (increase) in other assets (5)
------- -------
Net cash required by investing activities ( 44) (27)
FINANCING ACTIVITIES
Decrease in long-term debt ( 272) ( 246)
------- -------
Net cash required by financing activities ( 272) ( 246)
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 412 (579)
CASH AND CASH EQUIVALENTS AT
JANUARY 1, 1995 AND 1994 561 1,244
------- -------
CASH AND CASH EQUIVALENTS AT
SEPTEMBER 30, 1995 AND 1994 $ 973 $ 665
======== ========
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE A -- BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared on a going concern basis which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of
business.
During the nine-month period ended September 30, 1995, Seal Fleet, Inc.
("Seal Fleet" or "the Company") realized a net loss of $151,000 and as of
that date the Company's total liabilities exceeded its total assets by
$3,656,000. Further, the Company is currently in default on a significant
portion of notes to a related party (see Note C). These factors indicate
that the Company may be unable to continue in its present form as a going
concern.
NOTE B -- RESULTS OF OPERATION
The results of operation for the nine-month period ended September 30,
1995 is not necessarily indicative of the results of operation for the
full year.
NOTE C -- DEFAULT IN SENIOR SECURITIES
The Company has a note payable to the Three R Trusts, face amount of
$5,925,000, stated interest at 7%, collateralized by the common stock of
six subsidiaries of the Company. The note was originally discounted
$1,330,000 using an imputed rate of 10%. This discount was fully
amortized in 1989. Principal payments were due in two equal installments
on December 27, 1990 and 1991. The company was unable to make these
principal payments to the Three R Trusts putting the note in default.
However, the Trusts have not called the note and have granted an
indefinite verbal extension. The Company made a principal payment of
$100,000 in 1993. The entire balance is classified as current at
September 30, 1995 and December 31, 1994.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE CONDENSED
CONSOLIDATED STATEMENTS OF OPERATION.
THREE-MONTH PERIOD ENDED SEPTEMBER 30, 1995 AND 1994
Consolidated net revenues for the three-month period ended September 30,
1995 decreased by approximately $78,000, or 4% as compared to the same
period in 1994. This decrease is due mainly to a decrease in charter
rates of vessels working in the Gulf of Mexico.
Total cost and expense for the three-month period ended September 30, 1995
decreased by approximately $50,000, or 3% as compared to the same period
in 1994. This decrease is due to a change in general and administrative
expense primarily relating to brokerage commission expense. Operating
expense remains without significant change while amortization of drydock
expense decreased slightly. Drydock amortization includes drydocking
costs which were expended in previous periods and were deemed to benefit a
period of eighteen months or more.
NINE-MONTH PERIOD ENDED SEPTEMBER 30, 1995 AND 1994
Consolidated net revenues for the nine-month period ended September 30,
1995 as compared to the same period in 1994 decreased by approximately
$504,000, or 9%. Since all areas of revenue decreased, the greater portion
of this decrease is contributed to charter revenues which is due to
decreased charter rates. The lower rates also affect the operating fees.
Even though the travel agency experienced an increase in sales, its
commissions earned decreased due to controlled commissions paid by
airline companies.
Total cost and expense increased by approximately $129,000, or 3%. The
major portion of this increase is due to cost of general repair of the
vessels included in operating expense. General and administrative expense
decreased due to a decrease in commissions paid in the brokerage business.
There was also a slight decrease in interest expense due to reduction of
debt.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal proceedings,
other than ordinary routine litigation incidental to the business.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Reference is made to Note C of the consolidated financial statements.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
EX-27 Financial Data Schedule.
(b) Reports on Form 8-K.
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
SEAL FLEET, INC.
(Registrant)
Trinidad C. Salinas
November 15, 1995 (Signature)
(Date) Financial Vice President
Chief Financial Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
09-30-95 10QSB AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS OF SEAL FLEET, INC.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<EXCHANGE-RATE> 1
<CASH> 973
<SECURITIES> 0
<RECEIVABLES> 4,821
<ALLOWANCES> 0
<INVENTORY> 66
<CURRENT-ASSETS> 6,267
<PP&E> 10,284
<DEPRECIATION> 7,415
<TOTAL-ASSETS> 9,419
<CURRENT-LIABILITIES> 10,679
<BONDS> 0
<COMMON> 248
0
0
<OTHER-SE> (3,904)
<TOTAL-LIABILITY-AND-EQUITY> 9,419
<SALES> 4,825
<TOTAL-REVENUES> 4,825
<CGS> 0
<TOTAL-COSTS> 4,366
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 610
<INCOME-PRETAX> (151)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (151)
<EPS-PRIMARY> (.07)
<EPS-DILUTED> (.07)
</TABLE>
