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SEACOR Holdings Announces Results For The Second Quarter Ended June 30, 2019

SEACOR Holdings Announces Results For The Second Quarter Ended June 30, 2019

FORT LAUDERDALE, Fla., July 24, 2019 (GLOBE NEWSWIRE) -- SEACOR Holdings Inc. (CKH) (the “Company”) today announced its results for the quarter ended June 30, 2019:

  • Net income attributable to stockholders was $14.6 million ($0.76 per diluted share) compared with $45.1 million ($2.14 per diluted share) for the quarter ended June 30, 2018, which benefited from a net gain of $42.6 million ($1.89 per diluted share) related to the sale of the Company's interest in Hawker Pacific Airservices.

  • Operating income, excluding gains on asset dispositions, was $10.4 million, a $1.1 million decrease compared with the quarter ended June 30, 2018.

  • “Cash Earnings” were $32.9 million compared with $2.3 million for the quarter ended June 30, 2018.

The Company uses the non-GAAP financial measures "Cash Earnings" and OIBDA in this release; a reconciliation to their closest U.S. GAAP measure is included in "Use of non-GAAP Financial Measures" in this release.

Charles Fabrikant, Executive Chairman, commented:

"The flooding on the U.S. Inland Waterways in the second quarter was historic in both duration and breadth of the river system that was affected. The lower Mississippi River at Baton Rouge, LA has been above flood stage since January and likely won't fall below flood stage until late August exceeding a record that dates to the 1920's. The immediate impact from the high water was a 26% reduction of exports through the center Gulf in the second quarter compared with a year ago. The effects will continue as corn production is expected to decline due to the delay in planting the current year crop. We have already seen a spike in corn and bean prices, which negatively impacts the export market further. The flooding also significantly impacted the upper Mississippi, Illinois and Arkansas rivers, as well as the St. Louis harbor, which was closed for 45 days. Our terminal and fleeting locations in St. Louis lost business and incurred additional costs to prepare and secure our facilities and assets to prevent damage or loss. At present, certain portions of our operations are beginning to return to "normal," however, I suspect we will be feeling the effects of the flooding for some time to come."

Operating Discussion

Ocean Transportation & Logistics Services - Operating income and OIBDA attributable to SEACOR (excluding our partner’s noncontrolling interests in SEA-Vista) were $16.1 million and $23.2 million in the current year quarter compared with $6.5 million and $14.9 million in the prior year quarter, respectively.

Operating income in the current year quarter benefited from an increase in harbor towing activities, container and project cargo activity between the U.S., the Bahamas and the Caribbean and lower dry-docking costs.

Inland Transportation & Logistics Services - Operating income (loss) and OIBDA were $(1.5) million and $4.2 million in the current year quarter compared with $2.1 million and $8.3 million in the prior year quarter, respectively. Operating income (loss) and OIBDA included gains on asset dispositions of $0.3 million and $0.5 million in the current year quarter and prior year quarter, respectively.

Operating results in the current year quarter were impacted by prolonged flooding throughout the U.S. Inland Waterways resulting in a severe disruption to bulk transportation activities. Dry-cargo barge pool revenues declined year over year but were offset by lower operating expenses, primarily towing costs. Flooding closed the St. Louis harbor for 45 days during the current year quarter and restricted activity at the Company's terminal and fleeting locations; the volumes handled by the Company's terminals in the St. Louis area were approximately 60% lower in the current year quarter compared with the prior year quarter.

Witt O’Brien’s - Operating income and OIBDA were $1.0 million and $1.2 million in the current year quarter compared with $4.6 million and $4.8 million in the preceding quarter, and $7.3 million and $7.8 million in the prior year quarter, respectively. Operating income in the current year quarter was impacted by lower revenues following the successful completion of certain major task orders related to long-term recovery programs in Texas and the U.S. Virgin Islands, and the conclusion of disaster response work for multiple city and county governments. Results were also impacted by a bad debt charge. The quarter also included increased administrative and general expenses necessary to support the significant growth following the 2017 hurricanes and development of a broader range of post-disaster services.

Capital Commitments - The Company’s capital commitments as of June 30, 2019 were $28.9 million, including the Company's interest in two foreign-flag rail ferries, two inland river towboats, other equipment and vessel and terminal improvements.

Liquidity and Debt - During the current year quarter, the Company repurchased $13.3 million in principal amount of its 3.0% Convertible Senior Notes for $13.1 million resulting in debt extinguishment losses of $0.5 million.

As of June 30, 2019, the Company’s balances of cash, cash equivalents, restricted cash, restricted cash equivalents, marketable securities and construction reserve funds totaled $183.3 million. Total outstanding debt was $312.7 million, including $77.9 million of SEA-Vista debt that is non-recourse to the Company. SEA-Vista is a consolidated joint venture with $100.0 million of borrowing capacity under its credit facility as of June 30, 2019.

During the preceding quarter ended March 31, 2019, the Company entered into a new $125.0 million revolving credit facility. As of June 30, 2019, the Company had no borrowings outstanding under this facility.

Adoption of New Accounting Standards. On January 1, 2019, the Company adopted Financial Accounting Standards Board (“FASB”) Topic 842, Leases (“Topic 842”). Upon adoption, the Company recorded operating lease right-of-use assets and lease liabilities of $174.6 million for certain of its equipment, office, real property and land leases. In addition, the Company recognized a cumulative-effect adjustment of $25.4 million, net of tax, to the opening balance of retained earnings primarily for previously deferred gains related to sale-leaseback transactions.

SEACOR Holdings Inc. (“SEACOR”) is a diversified holding company with interests in domestic and international transportation and logistics and risk management consultancy. SEACOR is publicly traded on the New York Stock Exchange (NYSE) under the symbol CKH.

Certain statements discussed in this release as well as in other reports, materials and oral statements that the Company releases from time to time to the public constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Generally, words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “believe,” “plan,” “target,” “forecast” and similar expressions are intended to identify forward-looking statements. Such forward-looking statements concern management’s expectations, strategic objectives, business prospects, anticipated economic performance and financial condition and other similar matters. Forward-looking statements are inherently uncertain and subject to a variety of assumptions, risks and uncertainties that could cause actual results to differ materially from those anticipated or expected by management of the Company. These statements are not guarantees of future performance and actual events or results may differ significantly from these statements. Actual events or results are subject to significant known and unknown risks, uncertainties and other important factors, including risks relating to weakening demand for the Company’s services as a result of unplanned customer suspensions, cancellations, rate reductions or non-renewals of vessel charters or failures to finalize commitments to charter vessels, increased government legislation and regulation of the Company’s businesses that could increase the cost of operations, increased competition if the Jones Act is repealed, liability, legal fees and costs in connection with the provision of emergency response services, decreased demand for the Company’s services as a result of declines in the global economy, declines in valuations in the global financial markets and a lack of liquidity in the credit sectors, including, interest rate fluctuations, availability of credit, inflation rates, change in laws, trade barriers, commodity prices and currency exchange fluctuations, activity in foreign countries and changes in foreign political, military and economic conditions, changes in foreign and domestic oil and gas exploration and production activity, safety record requirements related to Ocean Transportation & Logistics Services, decreased demand for Ocean Transportation & Logistics Services due to construction of additional refined petroleum product, natural gas or crude oil pipelines or due to decreased demand for refined petroleum products, crude oil or chemical products or a change in existing methods of delivery, compliance with U.S. and foreign government laws and regulations, including environmental laws and regulations and economic sanctions, the dependence of Ocean Transportation & Logistics Services and Inland Transportation & Logistics Services on several key customers, consolidation of the Company’s customer base, the ongoing need to replace aging vessels, industry fleet capacity, restrictions imposed by the Shipping Acts on the amount of foreign ownership of the Company’s Common Stock, operational risks of Ocean Transportation & Logistics Services and Inland Transportation & Logistics Services, effects of adverse weather conditions and seasonality, the level of grain export volume, the effect of fuel prices on barge towing costs, variability in freight rates for inland river barges, the effect of international economic and political factors on Inland Transportation & Logistics Services’ operations, the ability to realize anticipated benefits from acquisitions and other strategic transactions, adequacy of insurance coverage, the attraction and retention of qualified personnel by the Company, changes in U.S. and international trade policies and various other matters and factors, many of which are beyond the Company’s control as well as those discussed in Item 1A. (Risk Factors) of the Company’s Annual report on Form 10-K and other reports filed by the Company with the Securities and Exchange Commission (“SEC”). It should be understood that it is not possible to predict or identify all such factors. Consequently, the preceding should not be considered to be a complete discussion of all potential risks or uncertainties. Given these risk factors, investors and analysts should not place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of the document in which they are made. The Company disclaims any obligation or undertaking to provide any updates or revisions to any forward-looking statement to reflect any change in the Company’s expectations or any change in events, conditions or circumstances on which the forward-looking statement is based, except as required by law. It is advisable, however, to consult any further disclosures the Company makes on related subjects in its filings with the SEC, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K (if any). These statements constitute the Company’s cautionary statements under the Private Securities Litigation Reform Act of 1995.

For additional information, contact Investor Relations at (954) 627-5278 or visit SEACOR’s website at www.seacorholdings.com.

SEACOR HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share data, unaudited)

Three Months Ended

Six Months Ended

June 30,

June 30,

2019

2018

2019

2018

Operating Revenues

$

197,023

$

216,831

$

406,547

$

401,655

Costs and Expenses:

Operating

142,871

162,168

289,982

293,945

Administrative and general

26,714

24,311

53,460

50,106

Depreciation and amortization

17,009

18,844

34,145

38,453

186,594

205,323

377,587

382,504

Gains on Asset Dispositions, Net

677

506

1,114

7,551

Operating Income

11,106

12,014

30,074

26,702

Other Income (Expense):

Interest income

1,885

2,179

3,785

4,035

Interest expense

(4,903)

(8,604)

(10,016)

(17,167)

Debt extinguishment losses, net

(503)

(5,407)

(1,296)

(5,449)

Marketable security gains (losses), net

13,284

782

16,352

(3,016)

Foreign currency gains (losses), net

(191)

(1,346)

214

344

Other, net

25

54,311

(619)

54,594

9,597

41,915

8,420

33,341

Income Before Income Tax Expense and Equity in Earnings (Losses) of 50% or Less Owned Companies

20,703

53,929

38,494

60,043

Income Tax Expense

3,390

9,853

5,595

9,572

Income Before Equity in Earnings (Losses) of 50% or Less Owned Companies

17,313

44,076

32,899

50,471

Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax

(312)

1,931

(2,830)

1,094

Net Income

17,001

46,007

30,069

51,565

Net Income Attributable to Noncontrolling Interests in Subsidiaries

2,448

881

7,783

5,798

Net Income Attributable to SEACOR Holdings Inc.

$

14,553

$

45,126

$

22,286

$

45,767

Basic Earnings Per Common Share of SEACOR Holdings Inc.

$

0.80

$

2.50

$

1.22

$

2.54

Diluted Earnings Per Common Share of SEACOR Holdings Inc.

$

0.76

$

2.14

$

1.17

$

2.32

Weighted Average Common Shares Outstanding:

Basic

18,288,879

18,076,944

18,260,876

18,023,752

Diluted

19,633,523

22,587,543

19,599,990

22,462,300

OIBDA(1)

$

28,115

$

30,858

$

64,219

$

65,155

OIBDA Attributable to SEACOR Holdings Inc.(1)

$

21,905

$

25,978

$

48,901

$

53,143

______________________

  1. Non-GAAP Financial Measure. See explanation of use of non-GAAP financial measures included elsewhere in this release.


SEACOR HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(in thousands, except per share data, unaudited)

Three Months Ended

Jun. 30,
2019

Mar. 31,
2019

Dec. 31,
2018

Sep. 30,
2018

Jun. 30,
2018

Operating Revenues

$

197,023

$

209,524

$

213,838

$

220,257

$

216,831

Costs and Expenses:

Operating

142,871

147,111

150,374

147,529

162,168

Administrative and general

26,714

26,746

26,718

26,083

24,311

Depreciation and amortization

17,009

17,136

17,510

18,616

18,844

186,594

190,993

194,602

192,228

205,323

Gains on Asset Dispositions, Net

677

437

6,014

6,018

506

Operating Income

11,106

18,968

25,250

34,047

12,014

Other Income (Expense):

Interest income

1,885

1,900

2,245

2,450

2,179

Interest expense

(4,903)

(5,113)

(6,181)

(8,335)

(8,604)

Debt extinguishment losses, net

(503)

(793)

(6,017)

(160)

(5,407)

Marketable security gains (losses), net

13,284

3,068

(11,128)

1,713

782

Foreign currency gains (losses), net

(191)

405

(2,280)

(328)

(1,346)

Other, net

25

(644)

13

357

54,311

9,597

(1,177)

(23,348)

(4,303)

41,915

Income Before Income Tax Expense (Benefit) and Equity in Earnings (Losses) of 50% or Less Owned Companies

20,703

17,791

1,902

29,744

53,929

Income Tax Expense (Benefit)

3,390

2,205

(4,519)

3,362

9,853

Income Before Equity in Earnings (Losses) of 50% or Less Owned Companies

17,313

15,586

6,421

26,382

44,076

Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax

(312)

(2,518)

(1,987)

821

1,931

Net Income

17,001

13,068

4,434

27,203

46,007

Net Income attributable to Noncontrolling Interests in Subsidiaries

2,448

5,335

9,120

10,136

881

Net Income (Loss) attributable to SEACOR Holdings Inc.

$

14,553

$

7,733

$

(4,686)

$

17,067

$

45,126

Basic Earnings (Loss) Per Common Share of SEACOR Holdings Inc.

$

0.80

$

0.42

$

(0.26)

$

0.94

$

2.50

Diluted Earnings (Loss) Per Common Share of SEACOR Holdings Inc.

$

0.76

$

0.41

$

(0.26)

$

0.88

$

2.14

Weighted Average Common Shares Outstanding:

Basic

18,289

18,233

18,165

18,108

18,077

Diluted

19,634

19,571

18,165

21,193

22,588

Common Shares Outstanding at Period End

18,550

18,528

18,330

18,243

18,224

OIBDA(1)

$

28,115

$

36,104

$

42,760

$

52,663

$

30,858

OIBDA attributable to SEACOR Holdings Inc.(1)

$

21,905

$

26,996

$

29,822

$

38,630

$

25,978

______________________

  1. Non-GAAP Financial Measure. See explanation of use of non-GAAP financial measures included elsewhere in this release.


SEACOR HOLDINGS INC.
SEGMENT INFORMATION
(in thousands, unaudited)

Three Months Ended

Jun. 30,
2019

Mar. 31,
2019

Dec. 31,
2018

Sep. 30,
2018

Jun. 30,
2018

Ocean Transportation & Logistics Services

Operating Revenues

$

109,681

$

109,272

$

97,366

$

109,939

$

105,155

Costs and Expenses:

Operating

71,230

69,932

64,234

64,683

75,044

Administrative and general

9,423

10,198

10,132

9,170

10,328

Depreciation and amortization

10,230

10,337

10,707

11,298

11,620

90,883

90,467

85,073

85,151

96,992

Gains on Asset Dispositions

349

17

5,496

5,505

3

Operating Income

19,147

18,822

17,789

30,293

8,166

Other Income (Expense):

Foreign currency gains (losses), net

1

(47

)

(17

)

(24

)

(76

)

Other, net

28

(651

)

(15

)

(96

)

398

Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax

700

111

(23

)

2,073

1,267

Segment Profit(1)

$

19,876

$

18,235

$

17,734

$

32,246

$

9,755

OIBDA(2)

$

29,377

$

29,159

$

28,496

$

41,591

$

19,786

OIBDA(2) attributable to stockholders

$

23,167

$

20,051

$

15,558

$

27,558

$

14,906

Dry-docking expenditures for U.S.-flag petroleum and chemical
carriers, dry bulk carriers and PCTC’s (included in operating costs and expenses)

$

1,925

$

1,581

$

6,430

$

399

$

5,291

Out-of-service days for dry-dockings of U.S.-flag petroleum and chemical carriers, dry bulk carriers and PCTC’s

30

15

147

47

Dry-docking expenditures for all other equipment

$

1,447

$

1,250

$

269

$

1,489

$

2,139

Inland Transportation & Logistics Services

Operating Revenues

$

61,455

$

65,602

$

77,513

$

78,845

$

73,409

Costs and Expenses:

Operating

54,486

54,245

60,801

65,667

62,361

Administrative and general

3,133

3,356

3,381

3,230

3,216

Depreciation and amortization

5,699

5,725

5,490

6,197

6,243

63,318

63,326

69,672

75,094

71,820

Gains on Asset Dispositions

330

420

481

513

503

Operating Income (Loss)

(1,533

)

2,696

8,322

4,264

2,092

Other Income (Expense):

Foreign currency gains (losses), net

(191

)

459

(2,240

)

(282

)

(1,183

)

Other, net

37

14

Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax

(618

)

(2,472

)

(2,571

)

(1,245

)

584

Segment Profit (Loss)(1)

$

(2,342

)

$

683

$

3,548

$

2,737

$

1,507

OIBDA(2)

$

4,166

$

8,421

$

13,812

$

10,461

$

8,335

SEACOR HOLDINGS INC.
SEGMENT INFORMATION (continued)
(in thousands, unaudited)

Three Months Ended

Jun. 30,
2019

Mar. 31,
2019

Dec. 31,
2018

Sep. 30,
2018

Jun. 30,
2018

Witt O’Brien’s

Operating Revenues

$

23,753

$

32,943

$

37,702

$

30,267

$

37,308

Costs and Expenses:

Operating

15,691

21,772

24,258

16,240

24,399

Administrative and general

6,831

6,402

6,876

7,389

5,140

Depreciation and amortization

209

206

660

492

491

22,731

28,380

31,794

24,121

30,030

Operating Income

1,022

4,563

5,908

6,146

7,278

Other Income (Expense):

Foreign currency losses, net

(1

)

(12

)

(17

)

Other, net

(2

)

(3

)