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 JUNE 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 June 30, 1995.
Class B common stock, par value $.10 per share, 50,000 shares
outstanding as of June 30, 1995.
<PAGE>
INDEX
Part I. Financial Information
Page
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of
Operations 5
Condensed Consolidated Statements of Cash
Flows 6
Notes to Consolidated Financial Statements 7
Management's Discussion and Analysis of the
Statements of Operations 7
Part II. Other Information 8
<PAGE>
PART I. FINANCIAL INFORMATION
<TABLE>
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets
(in thousands of dollars)
(Unaudited)
<CAPTION>
June 30 December 31
1995 1994
ASSETS
Current Assets
<S> <C> <C>
Cash $ 464 $ 561
Accounts receivable - trade 3,212 5,483
Accounts receivable - related party 1,407 1,771
Accounts receivable - other 110 84
Materials and supplies 66 243
Deferred drydocking costs 395 113
Other current assets 102 31
Total current assets 5,756 8,286
PROPERTY AND EQUIPMENT
Ships 9,922 9,922
Furniture and equipment 234 214
Leasehold improvements 124 120
------- -------
Total property and equipment 10,280 10,256
Less accumulated depreciation 7,289 7,016
------ ------
Property and equipment--net 2,991 3,240
OTHER ASSETS
Deferred drydocking costs--non current 83 83
Assets held for resale 154 154
Other assets 41 42
-------- --------
$ 9,025 $ 11,805
======== ========
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands of dollars)
(Unaudited)
<CAPTION>
June 30 December 31
1995 1994
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
<S> <C> <C>
Current portion of long-term debt
to related party $ 7,021 $ 7,022
Accounts payable - trade 2,445 4,848
Accrued interest expense 823 772
-------- --------
Total current liabilities 10,289 12,642
Long-term debt to related party
less current portion 2,490 2,668
-------- --------
Total liabilities 12,779 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 (8,328) (8,079)
Class A common stock held in
treasury at cost; 447,621 shares
in 1995 and 1994 (130) (130)
-------- -------
Total shareholders' equity (3,754) (3,505)
-------- -------
$ 9,025 $ 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 Six months ended
June 30 June 30
1995 1994 1995 1994
REVENUES
<S> <C> <C> <C> <C>
Charter revenue $ 1,430 $ 1,564 $ 2,862 $ 3,199
Operating fees 80 60 156 184
Crewing fees 7 12 19 29
Travel agency commissions 74 113 118 168
------- ------- ------- -------
Total revenues 1,591 1,749 3,155 3,580
COST AND EXPENSE
Operating expense 735 680 1,491 1,302
Drydock amortization 132 87 197 174
Selling, general and
administrative expense 412 475 892 998
Selling, general and
administrative expense-
travel agency 72 67 142 113
Depreciation 137 136 274 272
Interest expense 203 214 408 428
Other (income) and expense (10) (52) (62)
------- ------- ------- -------
Total cost and expense 1,681 1,607 3,404 3,225
NET INCOME BEFORE
PROVISION FOR FEDERAL
INCOME TAX (90) 142 (249) 355
Provision for federal
income tax 4 8
------- ------- ------- -------
NET INCOME AFTER
PROVISION FOR FEDERAL
INCOME TAX $ (90) $ 138 $ (249) $ 347
======= ======= ======= =======
NET INCOME PER SHARE $ (.04) $ .07 $ (.12) $ .17
======= ======= ======= =======
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>
Six months ended
June 30
1995 1994
OPERATING ACTIVITIES
<S> <C> <C>
Net income $ (249) $ 347
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation 274 272
Changes in operating assets
and liabilities:
Accounts and notes receivable 2,608 365
Other current assets (175) 72
Accounts payable--trade (2,403) (1,661)
Interest payable 51 292
------- -------
Net cash provided (required)
by operating activities 106 (313)
INVESTING ACTIVITIES
Purchase of property and equipment ( 24) (19)
------- -------
Net cash required by investing activities ( 24) (19)
FINANCING ACTIVITIES
Decrease in long-term debt ( 179) ( 162)
------- -------
Net cash required by financing activities ( 179) ( 162)
DECREASE IN CASH AND CASH EQUIVALENTS ( 97) (494)
CASH AND CASH EQUIVALENTS AT
JANUARY 1, 1995 AND 1994 561 1,244
------- -------
CASH AND CASH EQUIVALENTS AT
JUNE 30, 1995 AND 1994 $ 464 $ 750
======== ========
<FN>
See notes to consolidated financial statements.
</TABLE>
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 six-month period ended June 30, 1995, Seal Fleet, Inc.
("Seal Fleet" or "the Company") realized a net loss of $249,000 and as
of that date the Company's total liabilities exceeded its total assets
by $3,754,000. 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 six-month period ended June 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
June 30, 1995 and December 31, 1994.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE CONDENSED
CONSOLIDATED STATEMENTS OF OPERATION.
THREE-MONTH PERIOD ENDED JUNE 30, 1995 AND 1994
Consolidated net revenues for the three month period ended June 30,
1995 decreased by approximately $158,000 or 9% 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. Other contributing
factors are decreases in crewing revenues and commissions earned by the
travel agency.
<PAGE>
Total cost and expense for the three-month period ended June 30, 1995
increased by approximately $75,000, or 5% as compared to the same
period in 1994. Operating expense increased due to an increase in general
repair of the vessels. Another contributing factor is an increase in
amortization of
drydock expense which was expended in previous periods.
General and administrative expense decreased slightly due to a decrease
in commissions expense.
SIX MONTHS ENDED JUNE 30, 1995 AND 1994
Consolidated net revenues for the six-month period ended June 30, 1995
as compared to the same period in 1994 decreased by approximately
$425,000, or 12%. 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. The travel agency also
experienced a decrease in commissions earned due to loss in sales volume.
Total cost and expense increased by approximately $179,000, or 6%.
This increase is due to increase operating expense including general
repair of the vessels, brokerage, and insurance expense relating to
bareboat charters.
General and administrative expense decreased slightly as well as
interest expense.
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.
<PAGE>
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)
August 15, 1995 Trinidad C. Salinas
(Date) Financial Vice President
(Chief Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM 06-30-95 10QSB AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<EXCHANGE-RATE> 1
<CASH> 464
<SECURITIES> 0
<RECEIVABLES> 4,729
<ALLOWANCES> 0
<INVENTORY> 66
<CURRENT-ASSETS> 5,756
<PP&E> 10,280
<DEPRECIATION> 7,289
<TOTAL-ASSETS> 9,025
<CURRENT-LIABILITIES> 10,289
<BONDS> 0
<COMMON> 248
0
0
<OTHER-SE> (4,002)
<TOTAL-LIABILITY-AND-EQUITY> 9,025
<SALES> 3,155
<TOTAL-REVENUES> 3,155
<CGS> 0
<TOTAL-COSTS> 2,996
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 408
<INCOME-PRETAX> (249)
<INCOME-TAX> 0
<INCOME-CONTINUING> (249)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (249)
<EPS-PRIMARY> (.12)
<EPS-DILUTED> (.12)
</TABLE>
