<PAGE>
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, 1996
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, 1,984,627 shares
outstanding as of May 10, 1996.
Class B common stock, par value $.10 per share, 50,000 shares
outstanding as of May 10, 1996.
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<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
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<PAGE>
Seal Fleet, Inc. and Subsidiaries
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
Condensed Consolidated Balance Sheets
(in thousands of dollars)
(Unaudited)
<CAPTION>
March 31 December 31
1996 1995
----------------------
<S> <C> <C>
ASSETS
Current Assets
Cash $ 1,503 $ 1,055
Accounts receivable - trade 4,876 4,694
Accounts receivable - related party 703 758
Accounts receivable - other 145 133
Deferred drydocking costs 700 294
Materials and supplies 65 66
Other current assets 97 112
------- -------
Total current assets 8,089 7,112
PROPERTY AND EQUIPMENT
Ships 9,922 9,922
Furniture and equipment 210 223
Leasehold improvements 123 124
------- -------
Total property and equipment 10,255 10,269
Less accumulated depreciation 7,633 7,533
------- -------
Property and equipment - net 2,622 2,736
OTHER ASSETS
Deferred drydocking costs - non current 356 356
Assets held for resale 154 154
Other assets 36 36
-------- --------
TOTAL ASSETS $ 11,257 $ 10,394
</TABLE>
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<PAGE>
Seal Fleet, Inc. and Subsidiaries
<TABLE>
Condensed Consolidated Balance Sheets
(in thousands of dollars)
(Unaudited)
<CAPTION>
March 31 December 31
1996 1995
----------------------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current portion of long-term debt
to related party $ 7,460 $ 7,560
Accounts payable - trade 4,560 3,815
Accrued interest expense 991 877
Other liabilities 100
-------- --------
Total current liabilities 13,111 12,252
Long-term debt to related party
less current portion 1,666 1,763
-------- --------
Total liabilities 14,777 14,015
SHAREHOLDERS' EQUITY
Class A common stock, $.10 par
value; 3,700,000 shares author-
ized and 2,432,248 shares
issued in 1996 and 1995 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 (8,094) (8,195)
Class A common stock held in
treasury at cost; 447,621 shares
in 1996 and 1995 (130) (130)
-------- --------
Shareholders' equity (3,520) (3,621)
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY $ 11,257 $ 10,394
See notes to consolidated financial statements.
</TABLE>
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<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
1996 1995
------------------
<S> <C> <C>
Charter revenue $ 1,622 $ 1,432
Operating fees 91 75
Crewing fees 12
Travel agency commissions 58 44
------- -------
Total revenues 1,771 1,563
Operating expenses 652 755
Drydock amortization 136 65
Selling, general and adminis-
trative expense 533 480
Selling, general and adminis-
trative expense-travel agency 56 70
Depreciation 117 136
Interest expense 188 205
Other (income) and expense ( 12) 11
------- --------
Total costs and expenses 1,670 1,722
Net income (loss) $ 101 $( 159)
======= ========
Net income (loss) per share $ .05 $( .08)
======= ========
Weighted average shares outstanding 2,035,000 2,035,000
========= =========
See notes to consolidated financial statements.
</TABLE>
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<PAGE>
Seal Fleet, Inc. and Subsidiaries
<TABLE>
Condensed Consolidated Statement of Cash Flows
(in thousands of dollars)
(Unaudited)
<CAPTION>
Three months ended
March 31
1996 1995
------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ 101 $( 159)
Adjustments to reconcile net loss to
net cash provided (required) by
operating activities:
Depreciation 117 136
Changes in operating assets
and liabilities:
Accounts and notes receivable ( 138) 1,774
Other current assets ( 390) 51
Accounts payable - trade 744 (1,467)
Interest payable 114 132
Net cash provided (required) -------- -------
by operating activities 548 467
-------- -------
INVESTING ACTIVITIES
Purchase of property and equipment ( 3) ( 14)
-------- -------
Net cash required by investing activities ( 3) ( 14)
-------- -------
FINANCING ACTIVITIES
Decrease in long term debt ( 97) ( 89)
------- -------
Net cash required by financing activities ( 97) ( 89)
------- -------
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 448 364
CASH AND CASH EQUIVALENTS AT
JANUARY 1, 1996 AND 1995 1,055 561
-------- -------
CASH AND CASH EQUIVALENTS AT
MARCH 31, 1996 AND 1995 $ 1,503 $ 925
======== =======
See notes to consolidated financial statements.
</TABLE>
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<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, 1996, Seal Fleet,
Inc. ("Seal Fleet" or "the Company") realized net income of
$101,000 and as of that date the Company's total liabilities
exceeded its total assets by $3,520,000. 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, 1996 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. 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 March 31, 1996 and December 31, 1995.
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<PAGE>
Item 2. Management's Discussion and Analysis of the Condensed
Consolidated Statements of Operations
Consolidated net revenues for the quarter ended March 31, 1996 as
compared to the same period in 1995 increased by over $208,000,
or 13%, due to an increase in charter rates of company-owned
vessels working in the Gulf of Mexico. This increase took effect
in late 1995 and has continued into 1996. Charter revenues
increased by 13% while operating fees increased by 21%.
Commissions for the travel agency increased by 32% over the same
quarter of the previous year and the Company had no crewing
revenues.
Operating expense decreased during the current quarter as
compared with the same quarter in 1995 by approximately $4%.
This decrease was due to a decrease in foreign crew
transportation cost and a reduction in insurance claims related
to crew members.
General and administrative expense increased by approximately 7%
due to an increase in travel expense, legal expense and sales
commissions.
Depreciation expense decreased by 7% because certain assets have
become fully depreciated. Interest expense decreased by 8% due
to reduction of debt.
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<PAGE>
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 Company has entered into an agreement with Hvide Marine to
sell certain assets of the Company. Preliminary proxy material
has been filed with the Securities and Exchange Commission
("SEC") for review. Notification has been received by the
Company from the SEC that a full review will be performed on the
proxy material. Consequently, the Annual Shareholders' Meeting
date which was set by the Company for June 11, 1996 has been
delayed. Proxy material will be distributed to shareholders on a
date commensurate with the new meeting date.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits. EX-27
Financial Data Schedule
(b) Reports on Form 8-K. None.
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<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, 1996 (Registrant)
(Date)
Trinidad C. Salinas
(Signature)
Financial Vice President
Chief Financial Officer
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
3/31/96 FORM 10QSB AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS OF SEAL FLEET, INC.
</LEGEND>
<MULTIPLIER> 1000
<CURRENCY> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<EXCHANGE-RATE> 1.00
<CASH> 1,503
<RECEIVABLES> 5,724
<INVENTORY> 65
<CURRENT-ASSETS> 8,089
<PP&E> 10,255
<DEPRECIATION> 7,633
<TOTAL-ASSETS> 11,257
<CURRENT-LIABILITIES> 13,111
<COMMON> 248
<OTHER-SE> (3,768)
<TOTAL-LIABILITY-AND-EQUITY> 11,257
<SALES> 1,771
<TOTAL-REVENUES> 1,771
<TOTAL-COSTS> 1,482
<INTEREST-EXPENSE> 188
<INCOME-PRETAX> 101
<INCOME-TAX> 0
<INCOME-CONTINUING> 101
<NET-INCOME> 101
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
