Table of Contents

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2019              or             

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from              to

Commission file number 1-37966

SEACOR Marine Holdings Inc.

(Exact Name of Registrant as Specified in Its Charter)

 

 

Delaware

 

47-2564547

(State or Other Jurisdiction of

Incorporation or Organization)

 

(IRS Employer

Identification No.)

 

 

 

12121 Wickchester Suite 500

 

 

Houston, TX

 

77079

(Address of Principal Executive Offices)

 

(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: (346) 980-1700

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock

SMHI

New York Stock Exchange (“NYSE”)

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 for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes       No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer  

 

Accelerated filer  

 

Non-accelerated filer 

 

 

Smaller reporting company  

 

Emerging growth company  

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes      No  

 

  

 

The total number of shares of common stock, par value $.01 per share, outstanding as of July 31, 2019 was 21,765,331. The Registrant has no other class of common stock outstanding.

 

 


Table of Contents

 

 

i


Table of Contents

 

SEACOR MARINE HOLDINGS INC.

Table of Contents

 

 

 

Part I.

 

Financial Information

 

1

 

 

 

 

 

 

 

 

Item 1.

Financial Statements (Unaudited)

 

1

 

 

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets as of June 30, 2019 and December 31, 2018

 

1

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statements of Loss for the Three and Six Months Ended June 30, 2019 and 2018

 

2

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended June 30, 2019 and 2018

 

3

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statement of Changes in Equity for the Three and Six Months Ended June 30, 2019 and 2018

 

4

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2019 and 2018

 

6

 

 

 

 

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements

 

7

 

 

 

 

 

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

24

 

 

 

 

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

48

 

 

 

 

 

 

 

 

Item 4.

Controls and Procedures

 

48

 

 

 

 

 

 

Part II.

 

Other Information

 

50

 

 

 

 

 

 

 

 

Item 1.

Legal Proceedings

 

50

 

 

 

 

 

 

 

 

Item 1A.

Risk Factors

 

50

 

 

 

 

 

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

50

 

 

 

 

 

 

 

 

Item 3.

Default Upon Senior Securities

 

50

 

 

 

 

 

 

 

 

Item 4.

Mine Safety Disclosures

 

50

 

 

 

 

 

 

 

 

Item 5.

Other Information

 

51

 

 

 

 

 

 

 

 

Item 6.

Exhibits

 

52

 

 

i


Table of Contents

 

PART I—FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

 

SEACOR MARINE HOLDINGS INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

 

 

 

June 30, 2019

 

 

December 31, 2018

 

ASSETS

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

58,772

 

 

$

95,195

 

Restricted cash

 

 

2,240

 

 

 

1,657

 

Receivables:

 

 

 

 

 

 

 

 

Trade, net of allowance for doubtful accounts of $455 and $860 in 2019 and 2018, respectively

 

 

69,117

 

 

 

64,125

 

Other

 

 

10,410

 

 

 

12,082

 

Inventories

 

 

2,995

 

 

 

3,443

 

Prepaid expenses and other

 

 

4,123

 

 

 

2,530

 

Total current assets

 

 

147,657

 

 

 

179,032

 

Property and Equipment:

 

 

 

 

 

 

 

 

Historical cost

 

 

1,222,820

 

 

 

1,242,733

 

Accumulated depreciation

 

 

(525,556

)

 

 

(561,272

)

 

 

 

697,264

 

 

 

681,461

 

Construction in progress

 

 

68,228

 

 

 

88,918

 

Net property and equipment

 

 

765,492

 

 

 

770,379

 

Right-of-Use Asset - Operating Leases

 

 

27,390

 

 

 

 

Investments, at Equity, and Advances to 50% or Less Owned Companies

 

 

112,418

 

 

 

121,773

 

Construction Reserve Funds

 

 

20,112

 

 

 

28,061

 

Other Assets

 

 

3,627

 

 

 

3,690

 

 

 

$

1,076,696

 

 

$

1,102,935

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Current portion of operating lease liabilities

 

$

16,552

 

 

$

 

Current portion of long-term debt

 

 

20,651

 

 

 

16,812

 

Accounts payable and accrued expenses

 

 

33,909

 

 

 

19,370

 

Due to SEACOR Holdings

 

 

74

 

 

 

452

 

Accrued wages and benefits

 

 

4,625

 

 

 

5,025

 

Accrued income taxes

 

 

3,216

 

 

 

1,917

 

Deferred revenue

 

 

3,171

 

 

 

1,327

 

Accrued capital, repair and maintenance expenditures

 

 

21,805

 

 

 

18,886

 

Other current liabilities

 

 

15,776

 

 

 

19,828

 

Total current liabilities

 

 

119,779

 

 

 

83,617

 

Long-Term Operating Lease Liabilities

 

 

16,775

 

 

 

 

Long-Term Debt

 

 

379,075

 

 

 

387,854

 

Conversion Option Liability on Convertible Senior Notes

 

 

7,599

 

 

 

5,276

 

Deferred Income Taxes

 

 

37,063

 

 

 

44,682

 

Deferred Gains and Other Liabilities

 

 

5,165

 

 

 

26,571

 

Total liabilities

 

 

565,456

 

 

 

548,000

 

Equity:

 

 

 

 

 

 

 

 

SEACOR Marine Holdings Inc. stockholders’ equity:

 

 

 

 

 

 

 

 

Common stock, $.01 par value, 60,000,000 shares authorized; 21,790,974 and 20,443,215 shares issued in 2019 and 2018, respectively

 

 

218

 

 

 

204

 

Additional paid-in capital

 

 

424,549

 

 

 

415,372

 

Retained earnings

 

 

83,312

 

 

 

126,834

 

Shares held in treasury of 25,643 and 4,007, respectively, at cost

 

 

(374

)

 

 

(91

)

Accumulated other comprehensive loss, net of tax

 

 

(19,156

)

 

 

(16,788

)

 

 

 

488,549

 

 

 

525,531

 

Noncontrolling interests in subsidiaries

 

 

22,691

 

 

 

29,404

 

Total equity

 

 

511,240

 

 

 

554,935

 

 

 

$

1,076,696

 

 

$

1,102,935

 

 

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements and should be read in conjunction herewith.

1


Table of Contents

 

SEACOR MARINE HOLDINGS INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF LOSS

(in thousands, except share data)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Operating Revenues

 

$

64,345

 

 

$

60,701

 

 

$

120,594

 

 

$

112,422

 

Costs and Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating

 

 

43,525

 

 

 

46,001

 

 

 

87,802

 

 

 

84,349

 

Administrative and general

 

 

11,639

 

 

 

15,041

 

 

 

23,639

 

 

 

27,415

 

Lease expense

 

 

4,317

 

 

 

3,310

 

 

 

8,465

 

 

 

6,568

 

Depreciation and amortization

 

 

17,494

 

 

 

18,406

 

 

 

34,687

 

 

 

37,918

 

 

 

 

76,975

 

 

 

82,758

 

 

 

154,593

 

 

 

156,250

 

(Losses) Gains on Asset Dispositions and Impairments, Net

 

 

(3,848

)

 

 

1,055

 

 

 

(3,489

)

 

 

(1,588

)

Operating Loss

 

 

(16,478

)

 

 

(21,002

)

 

 

(37,488

)

 

 

(45,416

)

Other Income (Expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

222

 

 

 

352

 

 

 

579

 

 

 

568

 

Interest expense

 

 

(7,691

)

 

 

(6,489

)

 

 

(15,426

)

 

 

(12,622

)

SEACOR Holdings guarantee fees

 

 

(32

)

 

 

(7

)

 

 

(61

)

 

 

(19

)

Derivative losses, net

 

 

(1,398

)

 

 

(2,668

)

 

 

(2,323

)

 

 

(14,184

)

Foreign currency gains, net

 

 

(929

)

 

 

(818

)

 

 

(294

)

 

 

(679

)

 

 

 

(9,828

)

 

 

(9,630

)

 

 

(17,525

)

 

 

(26,936

)

Loss Before Income Tax Benefit and Equity in Earnings of 50% or Less Owned Companies

 

 

(26,306

)

 

 

(30,632

)

 

 

(55,013

)

 

 

(72,352

)

Income Tax Benefit

 

 

(3,048

)

 

 

(4,724

)

 

 

(6,879

)

 

 

(14,548

)

Loss Before Equity in Earnings of 50% or Less Owned Companies

 

 

(23,258

)

 

 

(25,908

)

 

 

(48,134

)

 

 

(57,804

)

Equity in Losses of 50% or Less Owned Companies

 

 

(7,006

)

 

 

(721

)

 

 

(10,403

)

 

 

(513

)

Net Loss

 

 

(30,264

)

 

 

(26,629

)

 

 

(58,537

)

 

 

(58,317

)

Net Loss attributable to Noncontrolling Interests in Subsidiaries

 

 

(1,875

)

 

 

(1,605

)

 

 

(4,599

)

 

 

(4,460

)

Net Loss attributable to SEACOR Marine Holdings Inc.

 

$

(28,389

)

 

$

(25,024

)

 

 

(53,938

)

 

$

(53,857

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted Loss Per Common Share and Warrants of SEACOR Marine Holdings Inc.

 

$

(1.21

)

 

$

(1.19

)

 

$

(2.32

)

 

$

(2.79

)

Weighted Average Common Shares and Warrants Outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted

 

 

23,382,272

 

 

 

21,035,214

 

 

 

23,237,012

 

 

$

19,312,923

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements and should be read in conjunction herewith.

2


Table of Contents

 

SEACOR MARINE HOLDINGS INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

Net Loss

 

$

(30,264

)

 

$

(26,629

)

 

$

(58,537

)

 

$

(58,317

)

 

Other Comprehensive Loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation losses

 

 

(1,151

)

 

 

(2,785

)

 

 

(276

)

 

 

(873

)

 

Derivative (losses) gains on cash flow hedges

 

 

(1,224

)

 

 

(63

)

 

 

(1,934

)

 

 

68

 

 

Reclassification of derivative gains (losses) on cash flow hedges to interest expense

 

 

128

 

 

 

(1

)

 

 

199

 

 

 

 

 

Reclassification of derivative (losses) gains on cash flow hedges to equity in earnings of 50% or less owned companies

 

 

(270

)

 

 

42

 

 

 

(530

)

 

 

171

 

 

 

 

 

(2,517

)

 

 

(2,807

)

 

 

(2,541

)

 

 

(634

)

 

Income tax benefit (expense)

 

 

173

 

 

 

(8

)

 

173

 

 

 

(35

)

 

 

 

 

(2,344

)

 

 

(2,815

)

 

 

(2,368

)

 

 

(669

)

 

Comprehensive Loss

 

 

(32,608

)

 

 

(29,444

)

 

$

(60,905

)

 

 

(58,986

)

 

Comprehensive Loss attributable to Noncontrolling Interests in Subsidiaries

 

 

(1,875

)

 

 

(1,715

)

 

 

(4,599

)

 

 

(4,493

)

 

Comprehensive Loss attributable to SEACOR Marine Holdings Inc.

 

$

(30,733

)

 

$

(27,729

)

 

$

(56,306

)

 

$

(54,493

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements and should be read in conjunction herewith.

 

3


Table of Contents

 

SEACOR MARINE HOLDINGS INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(in thousands)

 

 

 

Shares of

Common

Stock

Outstanding

 

 

Common

Stock

 

 

Additional

Paid-In

Capital

 

 

Shares

Held in

Treasury

 

 

Treasury

Stock

 

 

Retained

Earnings

 

 

Accumulated

Other

Comprehensive

Loss

 

 

Non-

Controlling

Interests In

Subsidiaries

 

 

Total

Equity

 

For the six months ended June 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2018

 

 

20,439,208

 

 

$

204

 

 

$

415,372

 

 

 

4,007

 

 

 

(91

)

 

$

126,834

 

 

$

(16,788

)

 

$

29,404

 

 

$

554,935

 

Impact of adoption of new accounting standard for leases

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10,416

 

 

 

 

 

 

 

 

 

10,416

 

December 31, 2018

 

 

20,439,208

 

 

 

204

 

 

 

415,372

 

 

 

4,007

 

 

 

(91

)

 

 

137,250

 

 

 

(16,788

)

 

 

29,404

 

 

 

565,351

 

Issuance of Common Stock

 

 

653,872

 

 

 

7

 

 

 

6,589

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,596

 

Restricted stock grants

 

 

211,500

 

 

 

2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2

 

Amortization of employee share awards

 

 

 

 

 

 

 

 

1,589

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,589

 

Exercise of options

 

 

8,750

 

 

 

 

 

 

108

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

108

 

Exercise of Warrants

 

 

444,391

 

 

 

4

 

 

 

 

 

 

49

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

 

 

3

 

Restricted stock vesting

 

 

(21,587

)

 

 

 

 

 

(2

)

 

 

21,587

 

 

 

(282

)

 

 

 

 

 

 

 

 

 

 

 

(284

)

Director share awards

 

 

30,197

 

 

 

1

 

 

 

893

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

894

 

Cancellation of employee share awards

 

 

(1,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition of consolidated joint venture

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,114

)

 

 

(2,114

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(53,938

)

 

 

 

 

 

(4,599

)

 

 

(58,537

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,368

)

 

 

 

 

 

(2,368

)

June 30, 2019

 

 

21,765,331

 

 

 

218

 

 

 

424,549

 

 

 

25,643

 

 

 

(374

)

 

 

83,312

 

 

 

(19,156

)

 

 

22,691

 

 

 

511,240

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended June 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2019

 

 

21,079,279

 

 

$

211

 

 

$

422,830

 

 

 

25,558

 

 

$

(373

)

 

$

111,701

 

 

$

(16,812

)

 

$

24,566

 

 

$

542,123

 

Restricted stock grants

 

 

211,500

 

 

 

2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2

 

Amortization of employee share awards

 

 

 

 

 

 

 

 

813

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

813

 

Exercise of Warrants

 

 

444,391

 

 

 

4

 

 

 

 

 

 

49

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

 

 

3

 

Restricted stock vesting

 

 

(36

)

 

 

 

 

 

(2

)

 

 

36

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2

)

Director share awards

 

 

30,197

 

 

 

1

 

 

 

893

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

894

 

Cancellation of employee share awards

 

 

 

 

 

 

 

 

15

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(28,389

)

 

 

 

 

 

(1,875

)

 

 

(30,264

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,344

)

 

 

 

 

 

(2,344

)

June 30, 2019

 

 

21,765,331

 

 

 

218

 

 

 

424,549

 

 

 

25,643

 

 

 

(374

)

 

 

83,312

 

 

 

(19,156

)

 

 

22,691

 

 

 

511,240

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements and should be read in conjunction herewith

4


Table of Contents

 

SEACOR MARINE HOLDINGS INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(in thousands)

 

 

 

Shares of

Common

Stock

Outstanding

 

 

Common

Stock

 

 

Additional

Paid-In

Capital

 

 

Shares

Held in

Treasury

 

 

Treasury

Stock

 

 

Retained

Earnings

 

 

Accumulated

Other

Comprehensive

Loss

 

 

Non-

Controlling

Interests In

Subsidiaries

 

 

Total

Equity

 

For the six months ended June 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2017

 

 

17,675,356

 

 

$

177

 

 

$

303,996

 

 

 

 

 

 

 

 

$

216,511

 

 

$

(12,493

)

 

$

14,975

 

 

$

523,166

 

Impact of adoption of new accounting standard for income tax effects

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(12,069

)

 

 

 

 

 

 

 

 

(12,069

)

December 31, 2017

 

 

17,675,356

 

 

 

177

 

 

 

303,996

 

 

 

 

 

 

 

 

 

204,442