EX-99 2 ex991.htm EXHIBIT 99.1 - PRESS RELEASE TRICO MARINE SERVICES REPORTS 2007 SECOND QUARTER RESULTS –

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For immediate release





TRICO ANNOUNCES PLANS TO REPURCHASE UP TO $100 MILLION OF ITS COMMON STOCK AND REPORTS 2007 SECOND QUARTER RESULTS


HOUSTON, July 30, 2007 /Marketwire/ -- Trico Marine Services, Inc. (NASDAQ: TRMA - News) (the “Company” or “Trico”) today announced its financial results for the quarter ended June 30, 2007 reporting quarterly net income of $4.4 million or $0.29 per share (diluted) compared with first quarter 2007 net income of $14.6 million or $0.95 per share (diluted). Charter hire revenues for the second quarter of 2007 were $57.9 million compared with $60.7 million in the prior quarter.  


Separately, Trico announced that its Board of Directors has authorized a program for the Company to repurchase up to $100 million of its common stock.


Summary Results


(In thousands, except per share data and day rates)

 

 

For the three months

For the three months

 

ended

ended

 

June 30, 2007

March 31, 2007

Charter hire revenues

 $                   57,899

 $                   60,667

Operating income

5,291

                      20,783

Net income

                      4,434

                      14,584

Diluted EPS

 $                       0.29

 $                       0.95

 

 

 

Day Rates:

 

 

Supply / Anchor Handling (North Sea class)

 $                   23,885

 $                   24,466

Supply Vessels (Gulf class) (1)

9,724

                        9,720

 

 

 

Utilization:

 

 

Supply / Anchor Handling (North Sea class)

86%

92%

Supply Vessels (Gulf class) (1)

74%

70%


(1)

Excludes five vessels transferred to EMSL Joint Venture that are on bareboat charters.


Second Quarter Results


Charter hire revenues decreased primarily due to lower utilization for Trico’s North Sea class vessels as a result of time spent by vessels in dry dock and mobilization of one vessel from West Africa to the North Sea. Spot rates for AHTS vessels in the second quarter continued to be robust.  For the Company’s Gulf class vessels, day rates and utilization remained steady from the first to second quarters of 2007, excluding the impact of vessels under bareboat agreements.




 

Direct operating expense increased $5.6 million in the second quarter of 2007 compared with the prior quarter primarily due to maintenance and classification (M&C) costs on four North Sea class vessels compared to one North Sea class vessel in the prior quarter. To satisfy customer requirements, one dry docking was delayed from the first quarter to the second quarter and another was accelerated from the third quarter to the second quarter. Additionally, a third North Sea class vessel was dry docked due to a customer request to upgrade the vessel and resulted in a new five year contract at attractive day rates.  These dry docks were all a result of regulatory class work.  A combination of strong customer demand, higher shipyard and labor costs and a lack of availability within shipyards led to higher average dry docking costs on these vessels than had been incurred on previous dry dockings. Second quarter M&C expenses included over half of the North Sea class vessels that were scheduled for dry docking in 2007.    


In addition, general and administrative (G&A) expenses increased in comparison to the first quarter by $3.2 million primarily due to an increase in legal and consulting fees related to a recently completed proxy contest and pursuit of an acquisition opportunity that did not lead to a completed transaction.


For the period from July 1 through July 27, 2007, day rates for North Sea class vessels averaged $23,724 with utilization of 90% while day rates for our Gulf class supply vessels averaged $9,556 with utilization of 88%, or 91% for all actively marketed vessels.


Joseph S. Compofelice, Trico’s Chairman, and CEO commented, “Our quarterly results were in line with our recently issued guidance, and reflected the higher levels of dry docking expense incurred when we dry docked a larger than expected number of North Sea class vessels in the quarter.  We are pleased to have 21 of 27 of our scheduled dry dockings for 2007 behind us.  The acceleration of our dry docking calendar was the result of strong customer demand for our vessels going forward and underscores the strength that we continue to see in our important North Sea market.”  


Mr. Compofelice continued, “Looking ahead, we are optimistic about rates and utilization for the second half of 2007. Activity levels are robust in the North Sea and in West Africa.  In our Gulf of Mexico market, day rates and utilization remain steady. We will focus on growing these core markets and managing our operating and overhead costs.  At the same time we expect to execute our strategy of rejuvenating our fleet, expanding into growing markets internationally and seeking attractive opportunities that allow us to grow our earnings and increase value for our shareholders.”  


Stock Repurchase Program


Trico also announced today that its Board of Directors has authorized a program for the repurchase of up to $100 million of aggregate purchase price of its common stock from time to time in open market transactions, including block purchases, or in privately negotiated transactions.  The stock may be purchased on a discretionary basis as determined by management, subject to market conditions, applicable legal requirements, available cash on hand and other factors. At current market prices, approximately 20% of the Company’s 14.9 million outstanding shares could be repurchased under this program. Trico expects that such repurchases may be made at any time during the next 12 to 18 months.


Trico stated that the repurchase program does not include specific price targets or timetables and may be modified or suspended at any time and could be terminated prior to completion. The repurchase program is subject to compliance with federal law limiting foreign ownership of Trico shares. Repurchased shares will be added to Trico’s treasury stock, and could be used for employee benefit plans, future acquisitions or other corporate purposes.


Trico said that its largest stockholder, Kistefos AS, supports the repurchase program and has agreed in principle to participate in it both to assure compliance with the Federal law referred to above and in order to maintain its approximately 20.2% ownership interest in the Company. The terms of Kistefos’s participation in the program are being finalized by Kistefos and the Company, and the Company is evaluating the need for similar arrangements with other foreign stockholders.





Mr. Compofelice added: “This repurchase program underscores our Board’s confidence that the Company’s strategy will continue to generate strong levels of cash flow.  We remain committed to our refleeting plan as the market for our services remains strong. However, in light of current equity market conditions, the Board of Directors has concluded that a stock repurchase program is consistent with our commitment to creating and delivering shareholder value. Our current financial position allows us to undertake this program, while retaining the financial flexibility necessary to invest in our growth strategy, whether through the newbuild market or by pursuing appropriate acquisition opportunities. Our goal remains to effectively balance the use of our cash, on one hand by returning capital, and on the other, by growing our business.”

 

About Trico


Trico provides a broad range of marine support services to the oil and gas industry, primarily in the North Sea, Gulf of Mexico, West Africa and Southeast Asia (through its partnership).  The services provided by the Company’s diversified fleet of vessels include the transportation of drilling materials, supplies and crews to drilling rigs and other offshore facilities; towing drilling rigs and equipment from one location to another; and support for the construction, installation, repair and maintenance of offshore facilities.  Trico is headquartered in Houston, Texas.


Please visit the Company’s website at http://www.tricomarine.com for additional information.


Certain statements in this press release that are not historical fact may be "forward looking statements." Actual events may differ materially from those projected in any forward-looking statement. There are a number of important factors involving risks and uncertainties beyond the control of the Company that could cause actual events to differ materially from those expressed or implied by such forward-looking statements. A description of risks and uncertainties relating to Trico Marine Services, Inc. and its industry and other factors, which could affect the Company's results of operations or financial condition, are included in the Company's Securities and Exchange Commission filings. Trico undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this report.


Contact info:

Geoff Jones

VP & Chief Financial Officer

(713) 780-9926




TRICO MARINE SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(In thousands, except share and per share amounts)

 

 

 

 

 

Three months

 

Three months

 

ended

 

ended

 

June 30, 2007

 

March 31, 2007

Revenues:

 

 

 

Charter hire

 $                  57,899 

 

 $                  60,667 

Amortization of non-cash deferred revenues

                          221 

 

                          208 

Other vessel income

                          590 

 

                       1,094 

Total revenues

                     58,710 

 

                     61,969 

Operating expenses:

 

 

 

Direct vessel operating expenses and other

                     36,975 

 

                     31,409 

General and administrative

                     10,350 

 

                       7,148 

Depreciation and amortization expense

                       6,114 

 

                       5,466 

Gain on sales of assets

                          (20)

 

                     (2,837)

Total operating expenses

                     53,419 

 

                     41,186 

Operating income

                       5,291 

 

                     20,783 

Interest expense

                     (1,040)

 

                        (783)

Amortization of deferred financing costs

                        (206)

 

                        (150)

Interest income

                       3,981 

 

                       2,718 

Other income (loss), net

                        (618)

 

                        (691)

Income before income taxes and noncontrolling

 

 

 

interest in loss of consolidated subsidiary

                       7,408 

 

                     21,877 

Income tax expense

                       3,472 

 

                       8,944 

Income before noncontrolling interest in loss of

 

 

 

consolidated subsidiary

                       3,936 

 

                     12,933 

Noncontrolling interest in loss of consolidated subsidiary

                          498 

 

                       1,651 

Net income

 $                    4,434 

 

 $                  14,584 

Basic income per common share:

 

 

 

Net income

 $                      0.30 

 

 $                      0.99 

Average common shares outstanding

              14,714,433 

 

          14,692,560 

Diluted income per common share:

 

 

 

Net income

 $                      0.29 

 

 $                      0.95 

Average common shares outstanding

              15,436,810 

 

          15,282,185 





TRICO MARINE SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(In thousands, except share and per share amounts)

 

 

 

 

 

Six months

 

Six months

 

ended

 

ended

 

June 30, 2007

 

June 30, 2006

Revenues:

 

 

 

Charter hire

 $                118,566 

 

 $                110,379 

Amortization of non-cash deferred revenues

                          429 

 

                       2,582 

Other vessel income

                       1,684 

 

                          327 

Total revenues

                   120,679 

 

                   113,288 

Operating expenses:

 

 

 

Direct vessel operating expenses and other

                     68,384 

 

                     50,221 

General and administrative

                     17,498 

 

                     12,459 

Depreciation and amortization expense

                     11,580 

 

                     12,528 

Insurance recovery from a loss on assets held for sale

                            - 

 

                        (605)

Gain on sales of assets

                     (2,857)

 

                     (1,117)

Total operating expenses

                     94,605 

 

                     73,486 

Operating income

                     26,074 

 

                     39,802 

Interest expense

                     (1,823)

 

                        (884)

Amortization of deferred financing costs

                        (356)

 

                          (96)

Interest income

                       6,699 

 

                       1,426 

Other income (loss), net

                     (1,309)

 

                        (767)

Income before income taxes and noncontrolling

 

 

 

interest in loss of consolidated subsidiary

                     29,285 

 

                     39,481 

Income tax expense

                     12,416 

 

                     14,964 

Income before noncontrolling interest in loss of

 

 

 

consolidated subsidiary

                     16,869 

 

                     24,517 

Noncontrolling interest in loss of consolidated subsidiary

                       2,149 

 

                            - 

Net income

 $                  19,018 

 

 $                  24,517 





 

For the Period

 

 

 

 

 

 

 

 

 

from July 1, 2007

 

 

 

 

 

through

 

Three months ended

 

Six months ended

Average Day Rates:

July 27, 2007

 

June 30, 2007

 

March 31, 2007

 

June 30, 2007

 

June 30, 2006

PSV/AHTS (North Sea class)

 $                  23,724 

 

 $                  23,885 

 

 $                  24,466 

 

 $                    24,184 

 

 $                     17,531 

Supply (Gulf class)(1)

                       9,556 

 

                       9,724 

 

                       9,720 

 

                         9,722 

 

                        10,940 

Crew/line handling

                       5,866 

 

                       5,996 

 

                       5,373 

 

                         5,651 

 

                          4,150 

Utilization:

 

 

 

 

 

 

 

 

 

PSV/AHTS (North Sea class)

90%

 

86%

 

92%

 

89%

 

94%

Supply (Gulf class)(1) (2)

88%

 

74%

 

70%

 

72%

 

64%

Crew/line handling

86%

 

75%

 

83%

 

79%

 

87%

Average Number of Vessels:

 

 

 

 

 

 

 

 

 

PSV/AHTS (North Sea class)

16.0 

 

16.0 

 

16.0 

 

16.0 

 

16.0 

Supply (Gulf class)

36.0 

 

38.5 

 

41.5 

 

40.0 

 

44.6 

Crew/line handling

7.0 

 

7.0 

 

8.0 

 

7.5 

 

9.5 


(1) Effective May 2007, five of our GOM Supply vessels entered into bareboat contracts which decreased average GOM Supply vessel day rates. Including the five vessels under bareboat agreements in 2007, our average day rates were $8,349, $8,976, $9,720, and $9,334 with utilization of 90%, 75%, 70% and 73% for the period from July 1, 2007 through July 27, 2007, the three month period ended June 30, 2007, the three months ended March 31, 2007 and the six months ended June 30, 2007, respectively.

(2)Stacked vessels are included in the calculation of utilization. Excluding stacked vessels, our supply vessel utilization was 91% during the period from July 1, 2007 through July 27, 2007, 81% during the three month periods ended June 30, 2007, 82% during the three month period ending March 31, 2007,  and 82% and 87% during the six months ended June 30, 2007 and 2006.





TRICO MARINE SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

 

(UNAUDITED)

 

 

 

 June 30,

 

 December 31,

 

2007

 

2006

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

 $                257,377 

 

 $                114,173 

Available for sale securities

                     53,196 

 

                       2,475 

Restricted cash

                       4,139 

 

                          716 

Accounts receivable, net

                     49,006 

 

                     58,787 

Prepaid expenses and other current assets

                       3,687 

 

                       4,036 

Assets held for sale

                       2,224 

 

                       3,048 

Total current assets

                   369,629 

 

                   183,235 

Property and equipment:

 

 

 

Land and buildings

                       2,007 

 

                       1,995 

Marine vessels

                   268,166 

 

                   256,125 

Construction-in-progress

                     18,544 

 

                     15,876 

Transportation and other

                       3,645 

 

                       2,328 

 

                   292,362 

 

                   276,324 

Less accumulated depreciation and amortization

                     56,749 

 

                     44,476 

Net property and equipment

                   235,613 

 

                   231,848 

Restricted cash - noncurrent

                       8,781 

 

                     11,842 

Other assets

                     15,805 

 

                       8,397 

Total assets

 $                629,828 

 

 $                435,322 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

Current liabilities:

 

 

 

Short-term and current maturities of debt

 $                    1,258 

 

 $                    1,258 

Accounts payable

                     13,020 

 

                     11,055 

Accrued expenses

                     15,915 

 

                     14,590 

Accrued insurance reserve

                       2,803 

 

                       3,062 

Accrued interest

                       1,878 

 

                          110 

Income taxes payable

                       1,617 

 

                       2,092 

Total current liabilities

                     36,491 

 

                     32,167 

Long-term debt, including premiums

                   157,946 

 

                       8,605 

Deferred income taxes

                     72,553 

 

                     63,327 

Deferred revenues on unfavorable contracts

                       1,008 

 

                       1,376 

Other liabilities

                       2,627 

 

                       2,199 

Total liabilities

                   270,625 

 

                   107,674 

Noncontrolling interest

                     13,161 

 

                     15,310 

Commitments and contingencies

 

 

 

Stockholders' equity:

 

 

 

Preferred stock, $.01 par value  

                            - 

 

                            - 

 Common stock, $.01 par value

                          149 

 

                          148 

Warrants - Series A

                       1,645 

 

                       1,646 

Warrants - Series B

                          633 

 

                          634 

Additional paid-in capital

                   237,886 

 

                   231,218 

Retained earnings

                     97,698 

 

                     78,824 

Pension and postretirement, net of taxes of $0.3 million

                        (748)

 

                        (708)

Cumulative foreign currency translation adjustment

                       8,779 

 

                          576 

Total stockholders' equity

                   346,042 

 

                   312,338 

Total liabilities and stockholders' equity

 $                629,828 

 

 $                435,322 








TRICO MARINE SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In thousands)

 

Six months

 

Six months

 

ended

 

ended

 

June 30, 2007

 

June 30, 2006

 

 

 

 

Net income

 $                  19,018 

 

 $                  24,517 

Adjustments to reconcile net income to net cash provided by

 

 

 

operating activities:

 

 

 

Depreciation and amortization

                     11,882 

 

                     12,590 

Amortization of deferred revenues

                        (429)

 

                     (2,582)

Deferred income taxes

                     10,228 

 

                     13,319 

Gain on sales of assets

                     (2,857)

 

                     (1,117)

Provision for doubtful accounts

                          285 

 

                       1,094 

Stock compensation expense

                       1,779 

 

                       1,123 

Noncontrolling interest in loss of consolidated subsidiary

                     (2,149)

 

                            - 

Change in operating assets and liabilities:

 

 

 

Accounts receivable

                     10,801 

 

                     (6,528)

Prepaid expenses and other current assets

                          404 

 

                        (574)

Accounts payable and accrued expenses

                       3,418 

 

                          931 

Other, net

                     (2,591)

 

                        (475)

Net cash provided by operating activities

                     49,789 

 

                     42,298 

Cash flows from investing activities:

 

 

 

Purchases of property and equipment

                     (7,821)

 

                     (7,294)

Proceeds from sales of assets

                       4,553 

 

                       2,138 

Sales of available-for-sale securities

                       7,625 

 

                            - 

Purchase of available-for-sale securities

                   (58,346)

 

 

Increase in restricted cash

                        (324)

 

                     (4,272)

Net cash used in investing activities

                   (54,313)

 

                     (9,428)

Cash flows from financing activities:

 

 

 

Net proceeds from issuance of common stock

                            35 

 

                          168 

Proceeds from issuance of debt

                   150,000 

 

                     15,878 

Debt issuance cost

                     (4,804)

 

                            - 

Repayment of debt

                        (629)

 

                   (32,627)

Contributions from non-controlling interest

                            - 

 

                     20,910 

Net cash provided by financing activities

                   144,602 

 

                       4,329 

Effect of exchange rate changes on cash and cash equivalents

                       3,126 

 

                          523 

Net increase  in cash and cash equivalents

                   143,204 

 

                     37,722 

Cash and cash equivalents at beginning of period

                   114,173 

 

                     51,218 

Cash and cash equivalents at end of period

 $                257,377 

 

 $                  88,940