SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-Q
X Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 1997
Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period ________________ to ____________________
Commission File Number 0-28316
TRICO MARINE SERVICES, INC.
(Exact name of registrant as specified in its charter)
Delaware 72-1252405
(State or other jurisdiction of (I.R.S. Employer
incorporation or organiztion) Identification No.)
610 Palm Street
Houma, LA 70364
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (504) 851-3833
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, and (2) has been subject
to such filing requirements for the past 90 days.
Yes X No
---------- -----------
As of May 9, 1997 there were 7,785,573 shares outstanding of the
Registrant's Common Stock, par value $.01 per share.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
March 31, December 31,
1997 1996
----------- ------------
ASSETS
Current assets:
Cash and cash equivalents $ 4,791 $ 1,047
Accounts receivable, net 18,156 17,409
Prepaid expenses and other current assets 665 591
---------- ----------
Total current assets 23,612 19,047
---------- ----------
Property and equipment, at cost:
Land and buildings 1,795 1,565
Marine vessels 151,289 120,403
Construction-in-progress 7,746 7,135
Transportation and other 1,007 853
---------- ----------
161,837 129,956
Less accumulated depreciation and amortization 13,060 10,814
---------- ----------
Net property and equipment 148,777 119,142
---------- ----------
Other assets, net 6,650 5,166
---------- ----------
$ 179,039 $ 143,355
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 6,006 $ 5,162
Accrued expenses 3,870 3,812
---------- ----------
Total current liabilities 9,876 8,974
---------- ----------
Long-term debt 45,500 21,000
Deferred income taxes, net 12,993 9,401
---------- ----------
Total liabilities 68,369 39,375
---------- ----------
Commitments and contingencies
Stockholders' equity:
Common stock, $.01 par value, 15,000,000
shares authorized, issued 7,840,896 and
7,836,996 shares, outstanding 7,768,864
and 7,764,964 shares at March 31, 1997
and December 31, 1996, respectively 78 78
Additional paid-in capital 93,915 93,896
Retained earnings 16,678 10,007
Treasury stock, at par value, 72,032 shares (1) (1)
---------- ----------
Total stockholders' equity 110,670 103,980
---------- ----------
$ 179,039 $ 143,355
========== ==========
The accompanying notes are an integral part of these consolidated
financial statements.
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)
Three Months Ended
March 31,
------------------------
1997 1996
---------- ----------
Revenues:
Charter hire $ 23,488 $ 8,376
Other vessel income 4 8
---------- ----------
Total revenues 23,492 8,384
---------- ----------
Operating expenses:
Direct labor and other operating expenses 8,147 4,687
General and administrative 1,418 661
Amortization of marine inspection costs 582 430
Other 71 104
---------- ----------
Total operating expenses 10,218 5,882
Depreciation and amortization expense 2,282 824
---------- ----------
Operating income 10,992 1,678
Interest expense 726 1,036
Amortization of deferred financing costs 17 102
Other income, net (14) (12)
---------- ----------
Income before income taxes 10,263 552
Income tax expense 3,592 188
---------- ----------
Net income $ 6,671 $ 364
========== ==========
Weighted average common shares outstanding 8,432,365 3,051,339
========== ==========
Net income per common share outstanding $ 0.79 $ 0.12
========== ==========
The accompanying notes are an integral part of these consolidated
financial statements.
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
Three Months Ended
March 31,
------------------------
1997 1996
---------- ----------
Net income $ 6,671 $ 364
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 2,882 1,372
Deferred income taxes 3,592 188
Interest on subordinated debt - 298
Gain on sale of assets 7 -
Provision for doubtful accounts 30 40
Changes in operating assets and liabilities:
Accounts receivable (777) (191)
Prepaid expenses and other current assets (74) (379)
Accounts payable and accrued expenses 901 (615)
Other, net (275) (63)
---------- ----------
Net cash provided by operating activities 12,957 1,014
---------- ----------
Cash flows from investing activities:
Purchases of property and equipment (31,911) (4,115)
Deferred USCG expenses (1,781) (304)
Proceeds from sales of assets 5 -
Investment in and advances to unconsolidated
company 3 (635)
---------- ----------
Net cash used in investing activities (33,684) (5,054)
---------- ----------
Cash flows from financing activities:
Proceeds from issuance of common stock, net
of registration expenses 19 (97)
Proceeds from issuance of long-term debt 25,500 6,169
Repayment of long-term debt (1,000) (964)
Deferred financing costs and other (48) (322)
---------- ----------
Net cash provided by financing activities 24,471 4,786
---------- ----------
Net increase in cash 3,744 746
Cash and cash equivalents at beginning of period 1,047 1,117
---------- ----------
Cash and cash equivalents at end of period $ 4,791 $ 1,863
========== ==========
Supplemental information:
Income taxes paid $ 450 $ 2
========== ==========
Interest paid $ 419 $ 1,217
========== ==========
The accompanying notes are an integral part of these consolidated
financial statements.
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Financial Statement Presentation:
The consolidated financial statements for Trico Marine Services, Inc. (the
"Company") included herein are unaudited but reflect, in management's
opinion, all adjustments, consisting only of normal recurring adjustments,
that are necessary for a fair presentation of the nature of the Company's
business. The results of operations for the three months ended March 31,
1997 are not necessarily indicative of the results that may be expected for
the full fiscal year or any future periods. The financial statements
included herein should be read in conjunction with the financial statements
and notes thereto included in the Company's consolidated financial
statements for the year ended December 31, 1996.
Certain prior period amounts have been reclassified to conform with the
presentation shown in the interim consolidated financial statements. These
reclassifications had no effect on net income, total stockholders' equity
or cash flows.
2. Bank Credit Agreements:
Effective February 7, 1997, the Company increased its agreement with its
bank lenders (the "Bank Credit Facility") to $65,000,000.
3. Acquisitions:
In January 1997, the Company entered into agreements with two companies to
acquire seven supply vessels and one utility vessel for $36,200,000. The
first transaction for the acquisition of five of the supply vessels and the
utility vessel was completed on January 31, 1997, with the Company
borrowing $22,000,000 under the Bank Credit Facility to fund a portion of
the purchase price. The Company expects the acquisition of the other two
supply vessels to be completed in the second quarter of 1997. The Company
will borrow under its Bank Credit Facility to fund a portion of the
purchase price.
4. Earnings Per Share and Capital Stucture Disclosure:
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards "SFAS No. 128 Earnings Per Share"
effective for financial statements issued for periods ending after December
15, 1997. The board has also issued Statement No. 129 "Disclosure of
Information About Capital Structure" also effective the same date. The
Company does not believe that effect of adopting these statements will have
a material impact on the Company.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
This discussion and analysis of financial condition and results of
operations should be read in conjunction with the unaudited consolidated
financial statements and the related disclosures included elsewhere herein.
RESULTS OF OPERATIONS
Revenues for the first quarter ended March 31, 1997 were $23.5 million, an
increase of 180.2% compared to the $8.4 million in revenues for the first
quarter of 1996. This increase was principally due to the growth in the
Company's vessel fleet, both in the Gulf of Mexico ("Gulf") and Brazil, and
the increase in average vessel day rates, principally for supply boats and
lift boats in the Gulf. The table below sets forth by vessel class, the
average day rates and utilization of the Company's vessels and the average
number of vessels owned during the periods indicated.
Three months ended March 31,
----------------------------
1997 1996
---- ----
Average Day Rates:
Supply $6,582 $3,415
Lift 5,536 4,840
Crew/Line Handling 1,771 1,530
Utilization:
Supply 88% 88%
Lift 66% 58%
Crew/Line Handling 94% 96%
Average Number of Vessels:
Supply 35.8 16.0
Lift 6.0 6.0
Crew/Line Handling 24.7 18.3
All classes of vessels in the Company's fleet reported higher dayrates
during the first quarter of 1997 compared to the first quarter of 1996 due
to the improved market conditions in the Gulf. Supply boat day rates for
the quarter rose 92.7% to $6,582, compared to $3,415 for the first quarter
of 1996. Lift boat day rates averaged $5,536 for the quarter, an increase
of 14.4% compared to $4,840 last year. Utilization for the supply boats
was unchanged from the 1996 first quarter at 88%. While the Company's
supply boats were effectively at full utilization, the 88% utilization rate
reflects a large number of scheduled vessel drydockings during the quarter
compared to the year ago period. Utilization for the lift boats increased
to 66% from 58% for the first quarter of 1996 including the impact in the
first quarter of 1997 of one of the six lift boats being unavailable for
service during the entire quarter due to drydocking and repairs. The
improvement in day rates and utilization for the lift boats during the
first quarter of 1997 is due to improved market conditions in the Gulf for
offshore platform repair and maintenance and well-servicing activities.
Dayrates for crewboats and line handling vessels increased 15.7% for the
first quarter to $1,771, from $1,530 for the first quarter of 1996, due to
the increase in dayrates for crewboats in the Gulf. Utilization for the
crew boats and line handling vessels decreased to 94% for the first quarter
of 1997, compared to 96% for the comparable 1996 period.
During the first quarter of 1997, direct labor and other operating expenses
increased to $8.1 million (34.7% of revenues), compared to $4.7 million
(55.9% of revenues) for the first quarter of 1996 due to the expanded
vessel fleet and increased labor and maintenance and repair costs. Direct
labor and other operating expenses decreased as a percentage of revenues
due to the increase in revenues during the first quarter of 1997.
Depreciation and amortization expense increased to $2.3 million for the
first quarter of 1997, up from $824,000 for the year-ago quarter due to the
expanded vessel fleet. Amortization of marine inspection costs increased
to $582,000 for the first quarter of 1997, from $430,000 in the comparable
1996 period, due to the amortization of increased drydocking and marine
inspection costs associated with the larger vessel fleet.
General and administrative expenses increased to $1.4 million (6.0% of
revenues) in the 1997 first quarter, from $661,000 (7.9% of revenues) for
the 1996 period due to additions of personnel in connection with the growth
in the Company's vessel fleet and additional financial reporting and other
expenses associated with being a public company this year versus the year
ago quarter. General and administrative expenses, as a percentage of
revenues, decreased in the first quarter as the increase in revenues and
additions to the vessel fleet did not require proportionate increases in
administrative expenses.
Interest expense decreased to $726,000 for the first quarter of 1997 from
$1.0 million for the first quarter of 1996. The decrease in interest
expense was due to a decrease in average borrowings during the quarter and
lower interest costs for the Company compared to the first quarter of 1996.
Average bank debt outstanding increased to $38.0 million in the first
quarter of 1997, compared to $27.4 million for the year-ago period. This
increase was more than offset by a decrease in average outstanding
subordinated debt during the quarter compared to the first quarter of 1996.
Average outstanding subordinated debt in the first quarter of 1996 was
$13.1 million. There was no outstanding subordinated debt in the first
quarter of 1997 because concurrent with the Company's initial public
offering in May 1996, the Company converted a portion of its 9%
subordinated debt into common stock and the remaining portion was retired
with proceeds from the initial public offering.
In the first quarter of 1997, the Company had income tax expense of $3.6
million, compared to income tax expense of $188,000 in the 1996 period.
LIQUIDITY AND CAPITAL RESOURCES
Funds during the first three months of 1997 were provided by $24.5 million
in net borrowings under the Company's Bank Credit Facility and $13.0
million in funds from operating activities. During the period, the Company
made capital expenditures totaling $33.7 million, consisting principally of
$25.0 million for the acquisition of five supply vessels and one utility
vessel in the Gulf completed at the end of January 1997. Other
expenditures consisted of U.S. Coast Guard drydocking costs and several
vessel construction and vessel upgrade projects.
During the first quarter of 1997, the upgrade of the Stones River was
completed and it began operations under a long-term charter. The Stones
River was a 180-foot supply boat acquired in March 1996 which was
lengthened to 220 feet. In connection with the acquisition completed at
the end of January 1997, the Company also began upgrading one of the
acquired vessels, renamed the Elkhorn River, by lengthening it from 180 to
220 feet and adding a dynamic positioning system. This vessel will begin a
three-year charter contract for a well stimulation company upon completion
of its upgrade in the third quarter of 1997. In the first quarter, the
Company continued construction in Brazil of a 200-foot supply boat which,
once completed, will commence a two year charter contract with Petrobras in
the third quarter of 1997. During the quarter, the Company also continued
construction of the SWATH vessel which is expected to be placed into
operation in the first quarter of 1998 under a five year charter contract
with Petrobras.
As of May 12, 1997, the Company had $43.5 million of outstanding borrowings
under its $65.0 million Bank Credit Facility. The Company believes its
capital expenditures for the remainder of 1997 will total approximately $31
million, including the pending acquisition of two supply boats expected to
be completed at the end of the second quarter, U.S. Coast Guard drydocking
costs and the Company's existing vessel construction and upgrade projects.
The Company believes that cash generated from operations and funds
available under the Bank Credit Facility will be sufficient to fund the
Company's currently planned capital projects and working capital
requirements. The Company's strategy, however, is to make other
acquisitions as part of an effort to expand it presence in the Gulf and
diversify into selected international markets. To the extent the Company
is successful in identifying such acquisition opportunities, it most likely
will require additional debt or equity financing depending on the size of
such acquisitions.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
3.1 Certificate of Incorporation of the Company.(1)
3.2 By Laws of the Company.(2)
10.1 Amendment No. 4 to the Revolving Credit Agreement among Trico
Marine Operators, Inc., Trico Marine Assets, Inc., Trico Marine
Services, Inc. and First National Bank of Boston, Hibernia
National Bank and First National Bank of Commerce, as Banks and
the First National Bank of Boston, as agent dated as of February
7, 1997. (3)
10.2 Vessel Purchase Agreement dated as of January 6, 1997 between
Trico Marine Assets, Inc. and Laborde Marine, L.L.C. (3)
11.1 Computation of Earnings Per Share.
27.1 Financial Date Schedule.
(b) Reports on Form 8-K:
Report on Form 8-K dated January 31, 1997 reporting "Item 2 -
Acquisition or Disposition of Assets and Item 7 - Financial
Statements and Exhibits."
________________________
(1) Incorporated by reference to the Company's Registration Statement on
Form 8-A filed with the Commission on April 25, 1996.
(2) Incorporated by reference to the Company's Registration Statement on
Form S-1 (Registration Statement No. 333-2990)
(3) Incorporated by reference to the Company's Form 8-K dated January 31,
1997.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
TRICO MARINE SERVICES, INC.
(Registrant)
Date: May 15, 1997 /s/ KENNETH W. BOURGEOIS
---------------------------------------
Kenneth W. Bourgeois
Chief Accounting Officer and
duly authorized officer
EXHIBIT 11.1
TRICO MARINE SERVICES, INC.
COMPUTATION OF EARNINGS PER SHARE
(In thousands, except share and per share amounts)
Three Months Ended
March 31,
---------------------
1997 1996
--------- ---------
Net income $ 6,671 $ 364
========= =========
Computation of weighted average
number of shares outstanding:
Issued : 7,840,896
Weighted average shares outstanding 7,766,646 3,051,339
Add: Incremental shares applicable
to stock options based on the
Treasury Stock method using
average market price 665,719 -
--------- ---------
Weighted average common shares
and equivalents outstanding 8,432,365 3,051,339
========= =========
Earnings per common share and
equivalent outstanding:
Net income $ 0.79 $ 0.12
========= =========
<TABLE> <S> <C>
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<LEGEND> The schedule contains summary financial information from consolidated
financial statements for the period ending March 31, 1997 and is
qualified in its entirety by refernece to such financial statements.
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