UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
----------
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997
Commission File Number 0-12289
---------------
SEACOR SMIT INC.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
DELAWARE 13-3542736
- ----------------------------------- ------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
11200 WESTHEIMER, SUITE 850
HOUSTON, TEXAS 77042
(713) 782-5990
----------------------------------
Not Applicable
(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 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. |X| Yes |_| No
The total number of shares of Common Stock, par value $.01 per share,
outstanding as of November 10, 1997 was 13,900,253. Registrant has no
other class of Common Stock outstanding.
<PAGE>
SEACOR SMIT INC. AND SUBSIDIARIES
TABLE OF CONTENTS
Page No.
-------
Part I. Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of
September 30, 1997 and December 31, 1996............................1
Condensed Consolidated Statements of Operations For the
Three and Nine Months Ended September 30, 1997 and 1996.............2
Condensed Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 1997 and 1996...............3
Notes to Condensed Consolidated Financial Statements ...............4
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations..........8
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K......................18
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SEACOR SMIT INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA, UNAUDITED)
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
------------------------ -----------------------
ASSETS
<S> <C> <C>
Current Assets:
Cash and cash equivalents ................ $ 306,770 $ 149,053
Investment securities ..................... - 311
Trade and other receivables,
net of allowance for
for doubtful accounts of
$805 and $475, respectively .............. 68,894 46,469
Affiliate receivables ...................... 2,892 2,224
Inventories ................................ 2,053 1,559
Prepaid expenses and other ................. 2,773 1,865
-----------------------
------------------------
Total current assets ....... 383,382 201,481
------------------------ -----------------------
Investments in, at Equity, and
Receivables from 50%
or Less Owned Companies .................. 57,484 21,316
------------------------ -----------------------
Property and Equipment 535,317 498,899
Less--Accumulated depreciation .............. (105,714) (101,123)
------------------------ -----------------------
Net property and equipment... 429,603 397,776
------------------------ -----------------------
Restricted Cash ............................. 32,289 -
Other Assets ................................ 19,217 15,882
------------------------ -----------------------
$ 921,975 $ 636,455
======================== =======================
LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities:
Current portion of long-term debt............ $ 1,900 $ 1,793
Accounts payable - trade .................... 12,636 14,690
Accounts payable - affiliates ............... 3,639 734
Other current liabilities ................... 23,658 12,066
------------------------ -----------------------
Total current liabilities ... 41,833 29,283
------------------------ -----------------------
Long-Term Debt .............................. 366,461 218,659
Deferred Income Taxes ....................... 57,676 33,749
Deferred Gain and Other Liabilities ......... 5,441 2,719
Minority Interests and Indebtedness
to Minority Shareholders .................. 4,864 974
Stockholders' Equity:
Common stock, $.01 par value,
14,007,610 and 13,888,133
shares issued at September 30, 1997,
and December 31, 1996, respectively ...... 140 139
Additional paid-in capital .................. 265,014 258,904
Retained earnings ........................... 186,319 92,005
Less 163,968 and 56,768 shares
held in treasury at
September 30, 1997 and December 31,
1996, respectively ........................ (5,203) (622)
Less unamortized restricted stock compensation (1,044) (279)
Currency translation adjustments............. 474 924
------------------------ -----------------------
Total stockholders' equity 445,700 351,071
------------------------ -----------------------
$ 921,975 $ 636,455
======================== =======================
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
<PAGE>
SEACOR SMIT INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE DATA, UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------ --------------------------------------
1997 1996 1997 1996
--------------- ----------- --------------- ----------------
<S> <C> <C> <C> <C>
Operating Revenue:
Marine $ 82,599 $ 50,307 $ 237,547 $ 138,043
Environmental -
Oil spill response................... 1,595 2,628 3,232 8,547
Retainer fees and other services..... 4,065 4,610 11,907 13,703
--------------- ---------------- ----------------- ----------------
88,259 57,545 252,686 160,293
--------------- ---------------- ----------------- ----------------
Costs and Expenses:
Costs of oil spill response............ 1,351 2,263 2,913 7,655
Operating expenses -
Marine............................... 42,261 27,110 117,140 77,137
Environmental........................ 1,373 1,747 3,911 4,511
Administrative and general............. 6,186 5,759 20,301 16,876
Depreciation and amortization.......... 8,555 6,249 26,176 17,791
--------------- ---------------- ----------------- ----------------
59,726 43,128 170,441 123,970
--------------- ---------------- ----------------- ----------------
Operating Income.......................... 28,533 14,417 82,245 36,323
--------------- ---------------- ----------------- ----------------
Other (Expense) Income:
Interest on debt....................... (2,966) (555) (8,607) (4,007)
Interest income........................ 2,927 689 7,488 1,731
Gain from equipment sales, net......... 10,292 926 57,302 1,448
McCall acquisition costs .............. - (37) - (509)
Other.................................. 121 (299) 564 11
--------------- ---------------- ----------------- ----------------
10,374 724 56,747 (1,326)
--------------- ---------------- ----------------- ----------------
Income Before Income Taxes,
Minority Interests,
Equity in Net Earnings of 50%
or Less Owned Companies and
Extraordinary Item....................... 38,907 15,141 138,992 34,997
Income Tax Expense........................ 13,263 5,240 48,466 12,445
--------------- ---------------- ----------------- ----------------
Income Before Minority Interests,
Equity in Net Earnings of 50%
or Less Owned Companies and
Extraordinary Item ...................... 25,644 9,901 90,526 22,552
Minority Interests........................ (71) 29 74 176
Equity in Net Earnings of
50% or Less Owned Companies............. 1,880 325 4,039 766
--------------- ---------------- ----------------- ----------------
Income Before Extraordinary Item.......... 27,453 10,255 94,639 23,494
Extraordinary Item -
Extinguishment of Debt, net of tax ..... - 807 (325) 807
--------------- ---------------- ----------------- ----------------
Net Income................................ $ 27,453 $ 9,448 $ 94,314 $ 22,687
=============== ================ ================= ================
Earnings Per Common Share --
Assuming No Dilution:
Income Before Extraordinary Item....... $ 1.99 $ 0.78 $ 6.82 $ 2.15
Extraordinary Item..................... - (0.06) (0.02) (0.07)
--------------- ---------------- ----------------- ----------------
Net Income........................... $ 1.99 $ 0.72 $ 6.80 $ 2.08
=============== ================ ================= ================
Earnings Per Common Share --
Assuming Full Dilution:
Income Before Extraordinary Item....... $ 1.72 $ 0.77 $ 5.88 $ 1.93
Extraordinary Item..................... - (0.06) (0.02) (0.06)
--------------- ---------------- ----------------- ----------------
Net Income........................... $ 1.72 $ 0.71 $ 5.86 $ 1.87
=============== ================ ================= ================
Weighted Average Common Shares:
Assuming No Dilution................... 13,824,101 13,074,963 13,867,568 10,923,340
Assuming Full Dilution................. 16,919,632 13,347,014 16,963,099 12,734,938
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
AND SHOULD BE READ IN CONJUNCTION HEREWITH.
<PAGE>
SEACOR SMIT INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS, UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1997 1996
------------------------- -------------------------
<S> <C> <C>
Net Cash Provided by Operating Activities $ 69,179 $ 40,455
------------------------- -------------------------
Cash Flows from Investing Activities:
Purchase of property and equipment............. (85,623) (37,382)
Proceeds from property and equipment sales 86,500 2,318
Purchase of securities......................... - (326)
Proceeds from sale of securities............... 311 642
Investments in and advances to 50% or
less owned companies ........................ (27,685) (293)
Principal payments on notes due from 50% or
less owned companies......................... 527 747
Principal payments received under a
sale-type lease ............................. 133 160
Restricted cash................................ (32,289) -
Other.......................................... - 288
------------------------- -------------------------
Net cash (used) in investing activities (58,099) (33,873)
------------------------- -------------------------
Cash Flows from Financing Activities:
Payments on long-term debt..................... (1,351) (50,733)
Net proceeds from sale of common stock ........ - 37,679
Payments on capital lease obligations.......... (987) -
Payments on stockholders' loans................ - (1,596)
Payment of public offering costs............... - (448)
Net proceeds from sale of 7.2% Senior Notes ... 148,061 -
Proceeds from issuance of long-term debt ...... 1,200 7,711
Proceeds from exercise of stock options ....... 316 489
Proceeds from the sale of minority interest ... 4,080 -
Common stock acquired for treasury............. (4,581) -
------------------------- -------------------------
Net cash provided (used) in
financing activities 146,738 (6,898)
------------------------- -------------------------
Effect of Exchange Rate Changes
on Cash and Cash Equivalents.............. (101) 14
------------------------- -------------------------
Net Increase (Decrease) in Cash and Cash
Equivalents .................................... 157,717 (302)
Cash and Cash Equivalents, Beginning of Period.... 149,053 28,786
------------------------- -------------------------
Cash and Cash Equivalents, End of Period.......... $ 306,770 $ 28,484
========================= =========================
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
AND SHOULD BE READ IN CONNECTION HEREWITH.
<PAGE>
SEACOR SMIT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION --
The condensed consolidated financial information for the three and
nine month periods ended September 30, 1997, and 1996, has been prepared by the
Company (defined below) and was not audited by its independent public
accountants. In the opinion of management, all adjustments (which include only
normal recurring adjustments) necessary to present fairly the financial
position, results of operations, and cash flows at September 30, 1997, and for
all periods presented have been made. 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, 1996.
Unless the context otherwise indicates, any references in this
Quarterly Report on Form 10-Q to the "Company" refer to SEACOR SMIT Inc. and its
consolidated subsidiaries, and any references in this Quarterly Report on Form
10-Q to "SEACOR" refer to SEACOR SMIT Inc.
2. EARNINGS PER SHARE --
Earnings per common share assuming no dilution were computed based on
the weighted average number of unrestricted and restricted common shares issued
and outstanding during the relevant periods. The additional common stock assumed
to be outstanding to reflect the dilutive effect of common stock equivalents was
excluded from the computation as insignificant.
Earnings per common share assuming full dilution were computed based
on the weighted average number of unrestricted and restricted shares issued and
outstanding plus additional shares assumed to be outstanding to reflect the
dilutive effect of common stock equivalents using the treasury stock method and
the assumption that all outstanding convertible subordinated notes were
converted to common stock. For computation purposes, net income was adjusted for
interest expense and applicable debt discount amortization.
3. NEW ACCOUNTING STANDARDS --
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128 (SFAS 128), "Earnings Per Share," that simplifies the
computation of earnings per share. SFAS 128 is effective for financial
statements issued for periods ending after December 15, 1997 and requires
restatement for all prior period earnings per share data presented. Earnings per
share calculated in accordance with SFAS 128 would be unchanged for the periods
presented.
In June 1997, the Financial Accounting Standards Board issued
Statement No. 130 (SFAS 130), "Reporting Comprehensive Income" and Statement No.
131 (SFAS 131), "Disclosures About Segments of an Enterprise and Related
Information." SFAS 130 establishes standards for reporting comprehensive income
(defined as net income and all other non-owner changes in equity) in the
financial statements. SFAS 131 requires companies to disclose segment data based
on how management makes decisions about allocating
<PAGE>
resources to segments and measuring their performance. SFAS 130 and 131 are
effective for 1998, and adoption of these standards is expected to result in
additional disclosure but will not have any effect on the Company's reported
financial position or results of operations.
4. RESTRICTED CASH --
In connection with certain of the Company's vessel sales during 1997
(see Note 7), the Company has directed the sale proceeds to be deposited into
escrow accounts pursuant to certain exchange and escrow agreements. Under the
terms of those agreements, for a period of six months, the funds held in escrow
are restricted to be used toward the purchase of replacement vessels that have
been identified. Accordingly, funds in escrow, totaling $32,289,000, are
reflected as restricted cash on the accompanying condensed consolidated balance
sheet at September 30, 1997.
5. LONG-TERM DEBT --
DEN NORSKE BANK CREDIT FACILITY
On June 30, 1997, the Company entered into an agreement for an
unsecured reducing revolving credit facility (the "Credit Facility") with Den
norske Bank ASA ("DnB"), as agent for itself and other lenders named therein
(the "Lenders"). This facility replaced the prior revolving credit facility with
DnB. Until termination of the Credit Facility, a commitment fee is payable on a
quarterly basis, at rates ranging from 0.15 to 0.45 percent per annum on the
average unfunded portion of the Credit Facility. The commitment fee rate shall
vary based upon the percentage the Company's funded debt bears to earnings
before interest, taxes, depreciation, and amortization ("EBITDA"), as defined.
An extraordinary loss of $325,000 or $0.02 per share was recognized
in connection with the termination of the prior revolving credit facility with
DnB that resulted from the write-off of unamortized debt issue costs.
Under the terms of the Credit Facility, the Company may borrow up to
$100,000,000 aggregate principal amount (the "Maximum Committed Amount") of
unsecured reducing revolving credit loans maturing on June 29, 2002. The Maximum
Committed Amount will automatically decrease semiannually by 6-1/4% beginning
June 30, 1998, with the balance payable at maturity. Outstanding borrowings will
bear interest at annual rates ranging from 70 to 160 basis points (the "Margin")
above LIBOR. The Margin shall be determined quarterly and vary based upon the
percentage the Company's funded debt bears to EBITDA, as defined.
The Credit Facility requires the Company, on a consolidated basis, to
maintain a minimum ratio of indebtedness to vessel value, as defined, a minimum
cash and cash equivalent level, a specified interest coverage ratio, specified
debt to capitalization ratios and a minimum net worth. The Credit Facility
limits the amount of secured indebtedness which the Company and its subsidiaries
may incur, provides for a negative pledge with respect to the Company's and its
subsidiaries' assets and restricts the payment of dividends.
7.2% SENIOR NOTES DUE 2009
On September 22, 1997, the Company completed the sale of $150,000,000
aggregate principal amount of its 7.20% Senior Notes Due 2009 (the "7.2% Notes")
which will mature on September 15, 2009. The offering was made to qualified
institutional buyers and a limited number of institutional accredited investors
and in offshore transactions exempt from registration under U.S. federal
securities laws. Interest on the 7.2% Notes is payable
<PAGE>
semiannually on March 15 and September 15 of each year commencing March 15,
1998. The 7.2% Notes may be redeemed at any time at the option of the Company,
in whole or from time to time in part, at a price equal to 100% of the principal
amount thereof plus accrued and unpaid interest, if any, to the date of
redemption plus a Make-Whole Premium, if any, relating to the then prevailing
Treasury Yield and the remaining life of the 7.2% Notes. On November 5, 1997,
the Company commenced an exchange offer through which it has offered to exchange
all of the 7.2% Notes for a series of 7.20% Senior Notes (the "Exchange Notes")
which are identical in all matieral respects to the 7.2% Notes, except that the
Exchange Notes are registered under the Securities Act of 1933, as amended.
The Company incurred approximately $1,939,000 in costs associated
with the sale of the 7.2% Notes including $1,012,500 of underwriters discount.
These debt issue costs are reported in other assets of the condensed
consolidated balance sheet and will be amortized to expense over the life of the
7.2% Notes. The 7.2% Notes were issued under an indenture (the "Indenture")
between the Company and First Trust National Association, as Trustee. The
Indenture contains covenants including, among others, limitations on liens and
sale and leasebacks of certain Principal Properties, as defined in the
Indenture, and certain restrictions on the Company consolidating with or merging
into any other Person, as defined in the Indenture.
6. SHARES HELD IN TREASURY --
During the nine months ended September 30, 1997, SEACOR repurchased
107,200 shares of its common stock. The shares were acquired at an aggregate
cost of $4,581,000. On February 24, 1997, SEACOR's Board of Directors authorized
the repurchase, from time to time, of up to $35,000,000 of the Company's common
stock and/or 5-3/8% Convertible Subordinated Notes Due November 15, 2006, and
the amount may be increased up to $50,000,000 under certain circumstances.
7. GAIN FROM EQUIPMENT SALES --
During the three and nine month periods ended September 30, 1997,
gain from equipment sales primarily related to the Company's sale of four and
twenty-six vessels, respectively. Vessels sold in the third quarter included two
supply/towing supply, one anchor handling towing supply, and one utility.
Vessels sold in the nine months ended September 30, 1997, included thirteen
supply/towing supply, six utility, four anchor handling towing supply, two crew,
and one freight.
8. COMMITMENT AND CONTINGENCY --
At October 31, 1997, the Company has committed to build offshore
marine vessels over the next two years for an aggregate capital expenditure of
approximately $206,000,000. Of this amount, $37,300,000 has been funded and
$6,300,000 is committed to be paid by Transportacion Maritima Mexicana S.A. de
C.V. ("TMM"), the Company's joint venture partner in Mexico, pursuant to a
Memorandum of Understanding, dated September 25, 1996, between TMM and the
Company relating to the construction of two vessels.
On December 19, 1996, in connection with the acquisition of all of
the offshore vessel assets, vessel spare parts, and certain related joint
venture interests owned by Smit Internationale N.V. ("Smit"), the Company agreed
to the payment to Smit of up to $47,200,000 of additional purchaase
consideration in cash and non-convertible notes based upon the earnings
performance during 1997 and 1998 by certain of those assets. Based upon
operations since the date of acquisition and estimated future rates per day
worked, management believes it is probable that additional purchase
consideration will be payable to Smit. When the contingency is resolved and
additional consideration is distributable, the Company will record the
additional consideration issued or issuable in accordance with generally
accepted accounting principles as an additional cost of certain of the assets to
be depreciated over their remaining lives.
In August 1997, SEACOR Offshore Rigs, Inc. ("SEACOR Rigs"), a wholly
owned
<PAGE>
subsidiary of SEACOR, invested $8,850,000 in exchange for a 50% interest in
Chiles Offshore LLC ("Chiles"), a joint venture and strategic alliance created
to manage and invest in partnerships which will construct, own, and operate two
premium jackup drilling rigs. Through September 30, 1997, SEACOR Rigs has also
advanced short-term loans to Chiles in the principal amount of $12,642,000 which
loans bear interest at 10% per annum. SEACOR Rigs has committed up to
$35,000,000 of capital in the aggregate (including the amounts already advanced
as described above) to partially fund the construction of these two rigs which
are expected to cost approximately $177,000,000. In connection with the rig
construction contract, Chiles obtained an option to purchase one additional
premium jackup drilling rig. It is anticipated that SEACOR Rigs will initially
own 80% of the equity in this venture; however, the Company anticipates that
this ownership interest will be reduced through the sale of additional equity
interests to third parties. On September 8, 1997, Chiles entered into a letter
of intent providing for the construction of two additional premium jackup
drilling rigs and for options to construct two more premium jackup drilling
rigs. Estimated average project costs for each rig would be approximately
$96,000,000. The Company does not presently intend to fund any portion of such
costs, which it anticipates would be funded by debt and additional third party
equity investments. Any such additional rig transactions are contingent upon the
preparation, negotiation and execution of definitive documentation and Chiles'
obtaining financing therefor by December 7, 1997.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
When included in this Quarterly Report on Form 10-Q or in documents
incorporated herein by reference, the words "expects," "intends," "anticipates,"
"believes," "estimates," and analogous expressions are intended to identify
forward-looking statements. Such statements inherently are subject to a variety
of risks and uncertainties that could cause actual results to differ materially
from those projected. Such risks and uncertainties include, among others,
general economic and business conditions, industry fleet capacity, changes in
foreign and domestic oil and gas exploration and production activity,
competition, changes in foreign political, social and economic conditions,
regulatory initiatives and compliance with governmental regulations, customer
preferences and various other matters, many of which are beyond the Company's
control. These forward-looking statements speak only as of the date of this
Quarterly Report on Form 10-Q. The Company expressly disclaims any obligation or
undertaking to release publicly any updates or any change in the Company's
expectations with regard thereto or any change in events, conditions or
circumstances on which any statement is based.
OFFSHORE MARINE SERVICES
The Company provides marine transportation and related services
largely dedicated to supporting offshore oil and gas exploration and production
through the operation, domestically and internationally, of offshore support
vessels. The Company's vessels deliver cargo and personnel to offshore
installations, tow and handle the anchors of drilling rigs and other marine
equipment, support offshore construction and maintenance work, and provide
standby safety support. The Company's vessels are also used for special
projects, such as well stimulation, seismic data gathering, freight hauling,
line handling, and oil spill emergencies.
The Company's operating revenue is affected by rates per day worked
and utilization. These performance measures are closely aligned with the
offshore oil and gas exploration industry and are a function of demand and
availability of marine vessels. The level of exploration and development of
offshore areas is affected by both short-term and long-term trends in oil and
gas prices which, in turn, are related to the demand for petroleum products and
the current availability of oil and gas resources.
<PAGE>
The table below sets forth rates per day worked and utilization data
for the Company during the periods indicated.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------------- --------------------------------
1997 1996 1997 1996
--------------- -------------- --------------- --------------
<S> <C> <C> <C> <C>
Rates Per Day Worked - Worldwide ($): (1) (2)
Supply/Towing Supply............................... 6,357 4,695 6,161 4,174
Anchor Handling Towing Supply 10,686 6,877 10,068 6,182
Crew............................................... 2,389 1,722 2,206 1,676
Standby Safety..................................... 6,290 5,051 5,883 4,758
Utility/Line Handling.............................. 1,426 1,166 1,360 1,134
Project and Geophysical/Freight 4,411 4,272 4,610 4,254
Overall Fleet.................................. 3,698 2,638 3,514 2,453
Overall Utilization - Worldwide (%): (1)
Supply/Towing Supply............................... 88.4 95.4 91.5 95.8
Anchor Handling Towing Supply 80.7 89.8 81.9 92.3
Crew............................................... 96.1 96.3 97.0 97.4
Standby Safety..................................... 94.6 88.9 92.6 86.7
Utility/Line Handling.............................. 98.1 84.4 97.7 79.1
Project and Geophysical/Freight 100.0 83.3 97.0 86.8
Overall Fleet.................................. 93.7 91.1 94.5 89.7
<FN>
(1) Rates per day worked is the ratio of total charter revenue to the total
number of vessel days worked. Rates per day worked and overall utilization
figures exclude owned vessels that are bareboat chartered-out, vessels owned
by corporations that participate in pooling arrangements with the Company,
joint venture vessels and managed/operated vessels and include vessels
bareboat and time chartered-in by the Company.
(2) Certain of the Company's vessels earn revenue in foreign currencies which
have been converted to U.S. dollars for reporting purposes at the weighted
average exchange rates of those foreign currencies for the periods
indicated.
</FN>
</TABLE>
A significant factor affecting operating revenues, other than average
rates per day worked and overall utilization, is the number of vessels owned and
bareboat chartered-in by the Company. Operating revenues and associated expenses
for vessels owned and bareboat chartered-in are incurred at similar rates.
However, operating expenses associated with vessels bareboat chartered-in
include bareboat charter hire expenses that, in turn, are included in vessel
expenses, but exclude depreciation expense.
The Company may also bareboat charter-out vessels. Operating revenues
for these vessels are lower than for vessels owned and operated or bareboat
chartered-in by the Company, because vessel expenses, normally recovered through
charter revenue, are the burden of the charterer. Operating expenses include
depreciation expense if the vessels which are chartered-out are owned. At
September 30, 1997 and 1996, the Company had seven and five vessels,
respectively, bareboat chartered-out. The table below sets forth the Company's
marine fleet structure at the dates indicated:
FLEET STRUCTURE At September 30,
--------------------------
1997 1996
----------- -------------
Owned........................................ 257 225
Bareboat and Time Chartered-In (1)........... 4 3
Joint Ventured (2)........................... 34 10
Pooled (3)................................... 12 5
----------- -------------
Overall Fleet............................ 307 243
=========== =============
- ----------------------
(1) A bareboat charter is a vessel lease under which the entity chartering-in a
vessel is typically responsible for all crewing, insurance, and operating
expenses, as well as the payment of bareboat charter hire to the vessel
owner. A time charter is a vessel lease under which the entity providing the
vessel is responsible for all crewing, insurance, and operating expenses. At
September 30, 1997, the Company bareboat chartered-in two vessels and time
chartered-in two vessels. At September 30, 1996, the Company bareboat
chartered-in two vessels and time chartered-in one vessel.
(2) 1997 and 1996 include twelve and ten vessels, respectively, owned by a joint
venture between Transportacion Maritima Mexicana S.A. de C.V. ("TMM") and
the Company (the "TMM Joint Venture"). 1997 also includes 22 vessels owned
by corporations in which the Company acquired an equity interest pursuant to
a transaction with Smit Internationale N.V. ("Smit") in December 1996 (the
"Smit Joint Ventures").
(3) 1997 and 1996 include five vessels owned by Toisa Ltd. ("Toisa") which
participate in a pool with ten Company owned North Sea standby safety
vessels. Additionally, 1997 includes seven standby safety vessels in which
the Company shares net operating profits after certain adjustments with
Toisa and owners of the vessels (the "Saint Fleet Pool").
<PAGE>
Vessel operating expenses are primarily a function of fleet size and
utilization levels. The most significant vessel operating expense items are
wages paid to marine personnel, maintenance and repairs, and marine insurance.
In addition to variable vessel operating expenses, the offshore marine segment
also incurs fixed charges related to the depreciation of property and equipment.
Depreciation is a significant operating cost, and the amount of depreciation
related to vessels is the most significant component.
A portion of the Company's revenues and expenses are paid in foreign
currencies. For financial statement reporting purposes, these amounts are
translated into U.S. dollars at the weighted average exchange rates during the
relevant period. The foregoing applies primarily to the Company's North Sea
operations and, to a lesser extent, its West African and Mexican offshore marine
operations. Overall, the percentage of the Company's offshore marine operating
revenues derived from foreign operations, whether in U.S. dollars or foreign
currencies, approximated 41% and 30% in the nine months ended September 30, 1997
and 1996, respectively.
The Company's foreign offshore marine operations are subject to
various risks inherent in conducting business in foreign nations. These risks
include, among others, political instability, potential vessel seizure,
nationalization of assets, currency restrictions and exchange rate fluctuations,
import-export quotas and other forms of public and governmental regulation, all
of which are beyond the control of the Company. Although, historically, the
Company's operations have not been affected materially by such conditions or
events, it is not possible to predict whether any such conditions or events
might develop in the future. The occurrence of any one or more of such
conditions or events could have a material adverse effect on the Company's
financial condition and results of operations.
Regulatory drydockings, which are a substantial component of marine
maintenance and repair costs, are expensed when incurred. Under applicable
maritime regulations, vessels must be drydocked twice in a five-year period for
inspection and routine maintenance and repair. The Company follows an asset
management strategy pursuant to which it defers required drydocking of selected
marine vessels and voluntarily removes these marine vessels from operation
during periods of weak market conditions and low rates per day worked. Should
the Company undertake a large number of drydockings in a particular fiscal
quarter or put through survey a disproportionate number of older vessels which
typically have higher drydocking costs, comparative results may be affected. In
the first nine months of 1997, the Company completed the drydocking of 79
vessels at an aggregate cost of $7.6 million versus 86 vessels drydocked at an
aggregate cost of $6.0 million in the comparable period of 1996.
Operating results are also affected by the Company's participation in
the following ventures: (i) a joint venture arrangement with Vector Offshore
Limited, a U.K. corporation which owns a 9% equity interest in the Company's
subsidiary that operates standby safety vessels in the North Sea, (ii) a 15
vessel pooling arrangement between the Company and Toisa that coordinates the
marketing for both the Company and Toisa in the North Sea standby safety market,
(iii) the TMM Joint Venture, (iv) the Saint Fleet Pool, and (v) the Smit Joint
Ventures which own and operate vessels in the Far East, Latin America, the
Middle East, the Mediterranean and offshore West Africa.
ENVIRONMENTAL SERVICES
The Company's environmental services business, operated primarily
through a wholly owned subsidiary, National Response Corporation ("NRC"),
provides contractual oil spill response services to those who store, transport,
produce or handle petroleum and certain other non-petroleum oils as required by
the Oil Pollution Act of 1990 ("OPA 90"). NRC's clients
<PAGE>
include tank vessel owner/operators, refiners and terminal operators,
exploration and production facility operators, and pipeline operators. NRC
charges a retainer fee to its customers for ensuring, by contract, the
access at predetermined rates to NRC's response services. Retainer
services include employing a staff to supervise response to an oil spill
emergency and maintaining specialized equipment, including marine equipment, in
a ready state for spill response as contemplated by response plans filed by
NRC's customers in accordance with OPA 90 and various state regulations. NRC
also maintains relationships with numerous environmental sub-contractors to
assist with equipment maintenance and provide trained personnel for deploying
equipment in a spill response.
Pursuant to retainer agreements entered into with NRC, certain vessel
owners pay in advance to NRC a minimum annual retainer fee based upon the number
and size of vessels in each such owner's fleet and in some circumstances pay NRC
additional fees based upon the level of each vessel owner's voyage activity in
the U.S. The Company recognizes the greater of revenue earned by voyage activity
or the portion of the retainer earned in each accounting period. Certain other
vessel owners pay a fixed fee for NRC's retainer services and such fee is
recognized ratably throughout the year. Facility owners generally pay a
quarterly fee to NRC based on a formula that defines and measures petroleum
products transported to or processed at the facility. Some facility owners pay
an annual fixed fee and such fee is recognized ratably throughout the year.
NRC's retainer agreements with vessel owners generally range from one to three
years while retainer arrangements with facility owners are as long as seven
years.
Spill response revenue is dependent on the magnitude of any one spill
response and the number of spill responses within a given fiscal period.
Consequently, spill response revenue can vary greatly between comparable periods
and the revenue from any one period is not indicative of a trend or of
anticipated results in future periods. Costs of oil spill response activities
relate primarily to (i) payments to sub-contractors for labor, equipment, and
materials, (ii) direct charges to NRC for labor, equipment and materials, and
(iii) training and exercises related to spill response preparedness.
The principal components of NRC's operating costs are salaries and
related benefits for operating personnel, payments to sub-contractors, equipment
maintenance and depreciation, and insurance. These expenses are primarily a
function of regulatory requirements and the level of retainer business.
<PAGE>
RESULTS OF OPERATIONS
The following table sets forth operating revenue and operating profit
by business segment for the periods indicated. The offshore marine business
segment's data is provided by geographic area of operation. The environmental
business segment's principal operations are in the United States.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------------- ------------------------------
1997 1996 1997 1996
------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
Operating Revenue
Marine:
United States ...................... $ 48,155 $ 34,553 $ 140,336 $ 96,299
North Sea ......................... 13,291 3,807 44,179 10,643
West Africa......................... 11,777 9,888 33,125 26,759
Other Foreign (a) .................. 9,376 2,059 19,907 4,342
--------------
------------- ------------- -------------
82,599 50,307 237,547 138,043
Environmental.................................... 5,660 7,238 15,139 22,250
------------- ------------- ------------- --------------
88,259 57,545 252,686 160,293
============= ============= ============= ==============
Operating Profit
Marine:
United States (b) ...................... 22,211 11,844 102,631 30,437
North Sea (b) ........................... 9,005 (67) 18,855 (1,745)
West Africa (b) ......................... 3,000 2,145 11,602 6,083
Other Foreign (a)........................ 5,141 1,160 8,898 2,085
------------- ------------- -------------- -------------
39,357 15,082 141,986 36,860
Environmental..................................... 448 835 1,278 3,183
------------- ------------- ------------- --------------
39,805 15,917 143,264 40,043
Other income (expense) ........................... - (36) (3) (515)
General corporate administration ................. (859) (874) (3,150) (2,255)
Net interest expense ............................. (39) 134 (1,119) (2,276)
Minority interests ............................... (71) 29 74 176
Equity in net earnings of 50% or less
owned companies ............................... 1,880 325 4,039 766
Income tax expense................................ (13,263) (5,240) (48,466) (12,445)
------------- ------------- ------------- --------------
Income before extraordinary item $ 27,453 $ 10,255 $ 94,639 $ 23,494
============= ============= ============= ==============
- ----------
</TABLE>
(a) Other Foreign includes vessels operating in the Far East, Mediterranean,
Arabian Gulf, and Latin America.
(b) Operating profit in 1997 and 1996 includes gains from the sale of
equipment.
The marine business segment's operating revenue increased $32.3
million and $99.5 million in the three and nine month periods ended September
30, 1997, respectively, compared to the three and nine month periods ended
September 30, 1996 due primarily to a net increase in the number of owned
vessels and a significant improvement in rates per day worked for the Company's
offshore vessels operating in the U.S. Gulf of Mexico. Significant offshore
vessel acquisitions include 24 vessels purchased from Smit during December 1996
that operate in the North Sea, offshore West Africa, and in Other Foreign
regions and 24 vessels purchased from Galaxie Marine Service, Inc. and
affiliated companies ("Galaxie") during January 1997 that operate in the U.S.
Gulf of Mexico. Anchor handling towing supply, towing, and supply vessels were
acquired from Smit, and utility, crew and supply vessels were acquired from
Galaxie. Strong demand in the U.S. Gulf of Mexico resulted in rates per day
worked increasing between comparable periods for all offshore vessels owned by
the Company. Additionally, rates per day worked for the Company's vessels
operating in the North Sea, offshore West Africa, and in Other Foreign regions
also increased between comparable periods.
The environmental business segment's operating revenue decreased $1.6
million and $7.1 million in the three and nine month periods ended September 30,
1997, respectively, compared to the three and nine month periods ended September
30, 1996 due primarily to a decline in the severity of oil spills managed by the
Company. Retainer fees and other service
<PAGE>
revenues also declined between comparable periods due primarily to a decline in
voyage and other service activities.
The marine business segment's operating profit increased $24.3
million and $105.1 million in the three and nine month periods ended September
30, 1997, respectively, compared to the three and nine month periods ended
September 30, 1996. The increases were due primarily to significant increases in
gains from the sale of equipment, mainly vessels, and factors affecting
operating revenue as outlined above. During the three months ended September 30,
1997, gains from the sale of equipment aggregated $10.3 million primarily from
the sale of four vessels: two U.S. Gulf of Mexico and one North Sea
supply/towing supply, one U.S. Gulf of Mexico utility, one North Sea anchor
handling towing supply. During the nine months ended September 30, 1997, gains
from the sale of equipment aggregated $57.3 million primarily from the sale of
twenty-six vessels: eleven U.S. Gulf of Mexico, one West African, and one North
Sea supply/towing supply, six U.S. Gulf of Mexico utility, two West African, one
North Sea, and one U.S. Gulf of Mexico anchor handling towing supply, two U.S.
Gulf of Mexico crew, and one U.S. freight. These increases in operating profit
were partially offset by higher wage, repair, and insurance costs. Wage costs
rose for seaman working in the U.S. Gulf of Mexico region in response to strong
demand for personnel resulting from very active market conditions. Repair costs
rose for the Company's fleet operating in the U.S. Gulf of Mexico due primarily
to an increase in (i) the number of scheduled engine overhauls, (ii) other
engine maintenance resulting from greater running time by the Company's smaller
vessels, and (iii) drydock expenses that resulted from rising shipyard costs,
more stringent regulatory inspections, and an increase between periods in the
number of larger vessels repaired. Insurance costs in the United States rose due
to higher vessel related self funded claim costs and higher health plan costs
caused in part by higher per average employee claim costs.
The environmental business segment's operating profit declined $0.4
million and $1.9 million in the three and nine month periods ended September 30,
1997, respectively, compared to the three and nine month periods ended September
30, 1996 due primarily to the factors affecting operating revenue as outlined
above. These declines in operating profit were partially offset by decreases in
both operating and general and administrative expenses.
The Company's overall administrative and general expenses, relating
primarily to operating activities, increased $0.4 million and $3.4 million in
the three and nine month periods ended September 30, 1997, respectively,
compared to the three and nine month periods ended September 30, 1996, and
related primarily to an increase in managerial staff and other administrative
costs necessary to support vessels recently acquired from Smit and Galaxie.
Corporate expenses also rose between comparable nine month periods due primarily
to increased employee compensation costs commensurate with the overall growth of
the Company's operations. The environmental business segment's administrative
and general expenses decreased in response to reduced voyage and other
service activities. Administrative and general expenses primarily include costs
associated with personnel, professional services, travel, communications,
facility rental and maintenance, general insurance, and franchise taxes.
The Company's overall depreciation and amortization expense, which
related primarily to operating activities, increased $2.3 million and $8.4
million in the three and nine month periods ended September 30, 1997,
respectively, compared to the three and nine month periods ended September 30,
1996. This increase was due primarily to a net increase in the
<PAGE>
number of owned offshore marine vessels that were acquired from Smit and
Galaxie.
Other expense in 1996 primarily related to costs incurred to complete
the McCall Acquisition that was accounted for as a pooling of interests.
Net interest expense decreased $1.2 million in the nine month
period ended September 30, 1997 compared to the nine month period ended
September 30, 1996. Interest income rose due primarily to greater invested cash
balances that resulted from improved operating results and the sale of the
Company's 5-3/8% Convertible Subordinated Notes Due November 15, 2006 (the
"5-3/8% Notes"). Interest expense also increased between comparable periods due
to an increase in the Company's outstanding indebtedness resulting primarily
from the sale of the 5-3/8% Notes. This increase was partially offset by the
capitalization in 1997 of certain interest costs associated with the
construction of vessels.
In the three and nine month periods ended September 30, 1997, equity
in the earnings of 50% or less owned companies, net of applicable income taxes,
resulted primarily from the Company's investment in the Smit Joint Ventures, TMM
Joint Venture, Clean Pacific Alliance L.L.C. ("CPA"), and OCTO Marine Limited
("OCTO"), an entity which provisions marine and underwater services to offshore
terminal and oilfield operations in the international oil industry. In the
comparable periods of 1996, equity earnings were realized from the Company's
participation in the TMM Joint Venture and CPA.
LIQUIDITY AND CAPITAL RESOURCES
The Company's ongoing liquidity requirements arise primarily from its
need to service debt, fund working capital requirements, acquire or improve
equipment, and make other investments. Management believes that cash flow from
operations will provide sufficient working capital to fund the Company's
operating needs. The Company may, from time to time, issue shares of common
stock, debt, or a combination thereof, or sell vessels to finance the
acquisition of equipment and businesses or improvements to existing equipment.
The Company's cash flow levels and operating revenues are determined
primarily by vessels' rates per day worked, overall vessel utilization, the size
of the Company's fleet, and the level of oil spill response activity. Factors
relating to the marine business segment are affected directly by the volatility
of oil and gas prices, the level of offshore drilling and exploration activity,
and other factors beyond the Company's control.
Net cash provided by operating activities increased $28.7 million in
the nine month period ended September 30, 1997, compared to the nine-month
period ended September 30, 1996. The increase was due primarily to improved
operating profits that resulted from higher rates per day worked, primarily in
the U.S. Gulf of Mexico, and the net addition of vessels to the Company's fleet.
Net cash used in investing activities increased $24.2 million in the
nine month period ended September 30, 1997, compared to the nine month period
ended September 30, 1996. The increase resulted primarily from (i) vessel
construction and acquisition expenditures, (ii) investments in and advances to
unconsolidated subsidiaries, primarily related to a joint venture and strategic
alliance with Chiles (see Note 8 to the Condensed Consolidated Financial
Statements included in this report), and an advance to a Smit Joint Venture for
the acquisition of a vessel, and (iii) restricted cash balances held in escrow,
pursuant to certain exchange and escrow agreements, to be used toward the
purchase of vessels increased between periods. These increases in cash used for
investing activities were partially offset by cash provided from the sale of a
greater number of vessels with higher market values between comparable
<PAGE>
periods.
Net cash provided in financing activities increased $153.6 million in
the nine month period ended September 30, 1997, compared to the nine month
period ended September 30, 1996. The increase resulted primarily from (i)
proceeds from the sale of the Company's 7.2% Senior Notes Due 2009 (the "7.2%
Notes"), (ii) proceeds from the sale of a minority interest to TMM in a joint
venture for the operation of an anchor handling towing supply vessel, and (iii)
a decline in principal repayments under the DnB Facility and other outstanding
indebtedness. These increases were offset by cash used to repurchase 107,200
shares of the Company's common stock pursuant to its Board of Directors
authorization that permits the repurchase, from time to time, of up to $35.0
million of the Company's common stock and/or 5-3/8% Notes. This authorization
may be increased up to $50.0 million under certain circumstances.
On June 30, 1997, the Company entered into an agreement for an
unsecured reducing revolving credit facility (the "Credit Facility") with Den
norske Bank ASA ("DnB"), as agent for itself and other lenders named therein
(the "Lenders"). This facility replaced the prior revolving credit facility with
DnB. Until termination of the Credit Facility, a commitment fee is payable on a
quarterly basis, at rates ranging from 0.15 to 0.45 percent per annum on the
average unfunded portion of the Credit Facility. The commitment fee rate shall
vary based upon the percentage the Company's funded debt bears to earnings
before interest, taxes, depreciation, and amortization ("EBITDA"), as defined.
Under the terms of the Credit Facility, the Company may borrow up to
$100.0 million aggregate principal amount (the "Maximum Committed Amount") of
unsecured reducing revolving credit loans maturing on June 29, 2002. The Maximum
Committed Amount will automatically decrease semiannually by 6-1/4% beginning
June 30, 1998, with the balance payable at maturity. Outstanding borrowings will
bear interest at annual rates ranging from 70 to 160 basis points (the "Margin")
above LIBOR. The Margin shall be determined quarterly and vary based upon the
percentage the Company's funded debt bears to EBITDA, as defined.
The Credit Facility requires the Company, on a consolidated basis, to
maintain a minimum ratio of indebtedness to vessel value, as defined, a minimum
cash and cash equivalent level, a specified interest coverage ratio, specified
debt to capitalization ratios and a minimum net worth. The Credit Facility
limits the amount of secured indebtedness which the Company and its subsidiaries
may incur, provides for a negative pledge with respect to the Company's and its
subsidiaries' assets, and restricts the payment of dividends.
On September 22, 1997, the Company completed the sale of $150.0
million aggregate principal amount of its 7.20% Notes which will mature on
September 15, 2009. The offering was made to qualified institutional buyers and
a limited number of institutional accredited investors and in offshore
transactions exempt from registration under U.S. federal securities laws.
Interest on the 7.2% Notes will be payable semiannually on March 15 and
September 15 of each year commencing March 15, 1998. The 7.2% Notes may be
redeemed at any time at the option of the Company, in whole or from time to time
in part, at a price equal to 100% of the principal amount thereof plus accrued
and unpaid interest, if any, to the date of redemption plus a Make-Whole
Premium, if any, relating to the then prevailing Treasury Yield and the
remaining life of the 7.2% Notes. On November 5, 1997, the Company commenced an
exchange offer through which it has offered to exchange all of the 7.2% Notes
for a series of 7.20% Senior Notes (the "Exchange Notes") which are identical
in all matieral respects to the 7.2% Notes, except that the Exchange Notes
are registred under the Securities Act of 1933, as amended.
The 7.2% Notes were issued under an indenture (the "Indenture")
between the Company and First Trust National Association, as Trustee. The
Indenture contains covenants
<PAGE>
including, among others, limitations on liens and sale and leasebacks of certain
Principal Properties, as defined in the Indenture, and certain restrictions on
the Company consolidating with or merging into any other Person, as defined in
the Indenture.
The Company anticipates net proceeds from the sale of the 7.2% Notes
will be used to fund anticipated capital expenditures, to pay certain
contractual obligations and to finance potential acquisitions and joint
ventures.
In connection with certain of the Company's vessel sales during 1997,
the Company has directed the sale proceeds to be deposited into escrow accounts
pursuant to certain exchange and escrow agreements. Under the terms of those
agreements, for a period of six months, the funds held in escrow are restricted
to be used toward the purchase of replacement vessels. At September 30, 1997,
the Company's restricted cash balances totaled $32.3 million.
On December 19, 1996, in connection with the acquisition of all of
the offshore vessel assets, vessel spare parts, and certain related joint
venture interests owned by Smit, the Company agreed to the payment to Smit of up
to $47.2 million of additional consideration in cash and non-convertible notes
based upon the earnings performance during 1997 and 1998 by certain of those
assets. Based upon operations since the date of acquisition and estimated future
rates per day worked, management believes it is probable that additional
purchase consideration will be payable to Smit in 1999 and future years.
CAPITAL EXPENDITURES
The Company may make selective acquisitions of marine vessels or
fleets of marine vessels and oil spill response equipment and/or expand the
scope and nature of its environmental services. The Company also may upgrade or
enhance its marine vessels to remain competitive in the marketplace. Management
anticipates that such expenditures would be funded through a combination of cash
flow provided by operations, existing cash balances, and may, from time to time,
issue additional shares of common stock, debt, or sell existing equipment.
At October 31, 1997, the Company has committed to build marine
vessels over the next two years for an aggregate capital expenditure of
approximately $206.0 million. Of this amount, $37.3 million has been funded and
approximately $6.3 million is committed to be paid by TMM, pursuant to a
Memorandum of Understanding, dated September 25, 1996, between TMM and the
Company relating to the construction of two marine vessels.
On August 5, 1997, SEACOR Offshore Rigs Inc. ("SEACOR Rigs"), a
wholly owned subsidiary of SEACOR, invested $8.85 million in cash in Chiles for
a 50% membership interest in such entity. Through September 30, 1997, SEACOR
Rigs has also advanced to Chiles short term loans in the principal amount of
$12.6 million. SEACOR Rigs has committed up to $35.0 million of capital
in the aggregate (including the amounts already advanced as described above) to
partially fund the construction of these two rigs which are expected to cost
approximately $177.0 million. In connection with the rig construction contract,
Chiles obtained an option to purchase one additional premium jackup drilling
rig. It is anticipated that SEACOR Rigs will initially own 80% of the equity in
this venture; however, the Company anticipates that this ownership interest will
be reduced as a result of the construction of additional rigs and through the
sale of additional equity interests to third parties. See Note 8 to the
Condensed Consolidated Financial Statements included in this report.
Expenditures for environmental compliance to modify marine segment
vessels have not
<PAGE>
been a significant component of the Company's capital budget.
NEW ACCOUNTING STANDARDS
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128 (SFAS 128), "Earnings Per Share," that simplifies the
computation of earnings per share. SFAS 128 is effective for financial
statements issued for periods ending after December 15, 1997 and requires
restatement for all prior period earnings per share data presented. Earnings per
share calculated in accordance with SFAS 128 would be unchanged for the periods
presented.
In June 1997, the Financial Accounting Standards Board issued
Statement No. 130 (SFAS 130), "Reporting Comprehensive Income" and Statement No.
131 (SFAS 131), "Disclosures About Segments of an Enterprise and Related
Information." SFAS 130 establishes standards for reporting comprehensive income
(defined as net income and all other non-owner changes in equity) in the
financial statements. SFAS 131 requires companies to disclose segment data based
on how management makes decisions about allocating resources to segments and
measuring their performance. SFAS 130 and 131 are effective for 1998, and
adoption of these standards is expected to result in additional disclosure but
will not have any effect on the Company's reported financial position or results
of operations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
A. Exhibits:
11.1 Computation of Per Share Earnings for the Three
and Nine Months Ended September 30,
1997 and 1996.
27.1 Financial Data Schedule.
B. Reports on Form 8-K:
None.
<PAGE>
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 SMIT Inc.
(Registrant)
DATE: NOVEMBER 14, 1997 By: /s/ Charles Fabrikant
----------------------
Charles Fabrikant
Chairman of the Board,
President and Chief
Executive Officer
(Principal Executive Officer)
DATE: NOVEMBER 14, 1997 By: /s/ Randall Blank
------------------
Randall Blank
Executive Vice President,
Chief Financial Officer and
Secretary
(Principal Financial Officer)
<PAGE>
EXHIBIT INDEX
Item No. Description
- -------- -----------
11.1 Computation of Per Share Earnings for the Three
and Nine Months Ended September 30,
1997 and 1996.
27.1 Financial Data Schedule.
EXHIBIT 11.1
SEACOR SMIT INC. AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------- --------------------------
1997 1996 1997 1996
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
EARNINGS PER COMMON SHARE - ASSUMING NO
DILUTION, AS ADJUSTED FOR COMMON STOCK
EQUIVALENTS (a) $ 1.95 $ 0.71 $ 6.69 $ 2.03
Weighted average shares outstanding 13,824,101 13,074,963 13,867,568 10,923,340
Shares issuable from assumed conversion of common
stock equivalents (a) 243,931 258,598 234,630 243,339
------------ ------------- ------------- ------------
Weighted average shares outstanding, as adjusted 14,068,032 13,333,561 14,102,198 11,166,679
============ ============= ============= ============
EARNINGS PER COMMON SHARE - ASSUMING
FULL DILUTION $ 1.72 $ 0.71 $ 5.86 $ 1.87
Weighted average shares outstanding 13,824,101 13,074,963 13,867,568 10,923,340
Shares issuable from assumed conversion of common
stock equivalents 250,836 268,646 250,836 268,646
Shares issuable from assumed conversion of
6.0% Convertible Subordinated Notes - - - 1,437,384
Shares issuable from assumed conversion of
2.5% Convertible Subordinated Notes - 3,405 - 105,568
Shares issuable from assumed conversion of
5-3/8% Convertible Subordinated Notes 2,844,695 - 2,844,695 -
------------ ------------ ------------ ------------
Weighted average shares outstanding, as adjusted 16,919,632 13,347,014 16,963,099 12,734,938
============ ============ ============ ============
NET INCOME FOR EARNINGS PER COMMON
SHARE COMPUTATION :
Net income for earnings per common share
computation-- assuming no dilution $ 27,453 $ 9,448 $ 94,314 $ 22,687
Interest on 6.0% Convertible Subordinated Notes,
net of income tax effect - - - 1,078
Interest and debt discount on 2.5% Convertible
Subordinated Notes, net of income tax effect - - - 74
Interest on 5-3/8% Convertible Subordinated Notes,
net of income tax effect 1,711 - 5,080 -
Net income for earnings per common share ------------ ------------ ------------- ------------
computation-- assuming full dilution, as adjusted $ 29,164 $ 9,448 $ 99,394 $ 23,839
============ ============ ============= ============
</TABLE>
(a) This computation is submitted in accordance with Regulation S-K item
601(b)(11). For the periods noted, it is contrary to APB Opinion No. 15
as per footnote to paragraph 14 which does not require the inclusion of
common stock equivalents in the earnings per share calculation if the
dilutive effect is less than 3%.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summry financial information extracted
from the financial statements contained in the body of the
accompanying Form 10-Q and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 306,770
<SECURITIES> 0
<RECEIVABLES> 69,699
<ALLOWANCES> 805
<INVENTORY> 2,053
<CURRENT-ASSETS> 383,382
<PP&E> 535,317
<DEPRECIATION> 105,714
<TOTAL-ASSETS> 921,975
<CURRENT-LIABILITIES> 41,833
<BONDS> 366,461
0
0
<COMMON> 140
<OTHER-SE> 445,560
<TOTAL-LIABILITY-AND-EQUITY> 921,975
<SALES> 0
<TOTAL-REVENUES> 252,686
<CGS> 0
<TOTAL-COSTS> 2,913
<OTHER-EXPENSES> 121,051
<LOSS-PROVISION> 329
<INTEREST-EXPENSE> 8,607
<INCOME-PRETAX> 138,992
<INCOME-TAX> 48,466
<INCOME-CONTINUING> 94,639
<DISCONTINUED> 0
<EXTRAORDINARY> (325)
<CHANGES> 0
<NET-INCOME> 94,314
<EPS-PRIMARY> 6.80
<EPS-DILUTED> 5.86
</TABLE>
