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 March 31, 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)
(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 May 10, 1995.
Class B common stock, par value $.10 per share, 50,000 shares
outstanding as of May 10, 1995.
<PAGE>
INDEX
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>
Seal Fleet, Inc. and Subsidiaries
PART I. FINANCIAL INFORMATION
<TABLE>
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
(in thousands of dollars)
(Unaudited)
<CAPTION>
March 31 December 31
1995 1994
ASSETS
<S> <C> <C>
Current Assets
Cash $ 926 $ 561
Accounts receivable - trade 3,960 5,483
Accounts receivable - related party 1,329 1,771
Accounts receivable - other 275 84
Deferred drydocking costs 177 243
Materials and supplies 113 113
Other current assets 46 31
Total current assets 6,826 8,286
PROPERTY AND EQUIPMENT
Ships 9,922 9,922
Furniture and equipment 224 214
Leasehold improvements 123 120
Total property and equipment 10,269 10,256
Less accumulated depreciation 7,152 7,016
Property and equipment - net 3,117 3,240
OTHER ASSETS
Deferred drydocking costs - non current 83 83
Assets held for resale 154 154
Other assets 42 42
TOTAL ASSETS $ 10,222 $ 11,805
</TABLE>
<PAGE>
Seal Fleet, Inc. and Subsidiaries
<TABLE>
Condensed Consolidated Balance Sheets
(in thousands of dollars)
(Unaudited)
<CAPTION>
March 31 December 31
1995 1994
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current portion of long-term debt
to related party $ 7,022 $ 7,022
Accounts payable - trade 3,381 4,848
Accrued interest expense 904 772
Total current liabilities 11,307 12,642
Long-term debt to related party
less current portion 2,579 2,668
Total liabilities 13,886 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 (8,238) (8,079)
Class A common stock held in
treasury at cost; 447,621 shares
in 1995 and 1994 (130) (130)
Shareholders' equity (3,664) (3,505)
LIABILITIES AND SHAREHOLDERS' EQUITY $ 10,222 $ 11,805
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
Seal Fleet, Inc. and Subsidiaries
<TABLE>
Condensed Consolidated Statements of Operations
(in thousands of dollars except per share amounts)
(Unaudited)
<CAPTION>
Three months ended
March 31
1995 1994
<S> <C> <C>
Charter revenue $ 1,432 $ 1,633
Operating fees 75 124
Crewing fees 12 19
Travel agency commissions 44 55
Total revenues 1,563 1,831
Operating expenses 755 622
Drydock amortization 65 87
Selling, general and adminis-
trative expense 480 522
Selling, general and adminis-
trative expense-travel agency 70 46
Depreciation 136 135
Interest expense 205 215
Other (income) and expense 11 ( 10)
Total costs and expenses 1,722 1,617
Net income (loss) before allowance
for federal income tax ( 159) 214
Provision for federal income tax 8
Net income (loss) $( 159) $ 206
Net income (loss) per share $( .08) $ .10
Weighted average shares outstanding 2,035,000 2,035,000
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
Seal Fleet, Inc. and Subsidiaries
<TABLE>
Condensed Consolidated Statement of Cash Flows
(in thousands of dollars)
(Unaudited)
<CAPTION>
Three months ended
March 31
1995 1994
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ ( 159) $ 205
Adjustments to reconcile net loss to
net cash provided (required) by
operating activities:
Depreciation 136 135
Changes in operating assets
and liabilities:
Accounts and notes receivable 1,774 890
Other current assets 51 ( 28)
Accounts payable - trade (1,467) (1,617)
Interest payable 132 167
Net cash provided (required)
by operating activities 467 ( 248)
INVESTING ACTIVITIES
Purchase of property and equipment ( 14) ( 14)
Net cash required by investing activities ( 14) ( 14)
FINANCING ACTIVITIES
Decrease in long term debt ( 89) ( 80)
Net cash required by financing activities ( 89) ( 80)
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS ( 364) ( 342)
CASH AND CASH EQUIVALENTS AT
JANUARY 1, 1995 AND 1994 561 1,244
CASH AND CASH EQUIVALENTS AT
MARCH 31, 1995 AND 1994 $ 925 $ 902
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
Seal Fleet, Inc. and Subsidiaries
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 three month period ended March 31, 1995, Seal Fleet,
Inc. ("Seal Fleet" or "the Company") realized a net loss of
$159,000 and as of that date the Company's total liabilities
exceeded its total assets by $3,664,000. 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 Operations
The results of operation for the three month period ended March
31, 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 payment 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 March 31,
1995 and December 31, 1994.
Item 2. Management's Discussion and Analysis of the Condensed
Consolidated Statements of Operations
Consolidated net revenues for the quarter ended March 31, 1995 as
compared to the same period in 1994 decreased by over $298,000,
or 15%, due to a decrease in charter rates of company-owned
vessels working in the Gulf of Mexico. Operating fees decreased
due to loss of two contracts which were in effect during the
<PAGE>
quarter ended March 1994.
The Company has historically experienced a decline in utilization
and charter rates during the first part of the year which tends
to affect all profit centers. Additionally, utilization and day
rates are in proportion with the number of drilling rigs in the
Gulf of Mexico which reached a seasonal low in February 1995.
Operating expense increased during the current quarter as
compared with the same quarter in 1994 by approximately $111,000.
This increase is due to an increase in general operating cost
such as fuel, general repairs and insurance.
There was no other material increase or decrease in any other
specific expense.
PART II. Other Information
Item 1. Legal Proceedings
The Company is not a party to any material pending legal
proceeding, 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 5. Other information.
The Annual Shareholders' Meeting of the Company will be held on
June 13, 1995, at 10:00 AM, at 3305 Avenue S, Galveston, Texas.
The record date is set for April 27, 1995. Proxy material is
scheduled to be mailed May 15, 1995.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits. None.
(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.
May 15, 1995 (Registrant)
(Date)
Trinidad C. Salinas
(Signature)
Financial Vice President
Chief Financial Officer
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