smhi-10q_20190930.htm

 

 

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 September 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, par value $0.01 per share

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 (“Common Stock”), outstanding as of October 31, 2019 was 21,855,014. The Registrant has no other class of common stock outstanding.

i


SEACOR MARINE HOLDINGS INC.

Table of Contents

 

 

 

Part I.

 

Financial Information

 

1

 

 

 

 

 

 

 

 

Item 1.

Financial Statements (Unaudited)

 

1

 

 

 

 

 

 

 

 

 

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

 

1

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statements of Loss for the Three and Nine Months Ended September 30, 2019 and 2018

 

2

 

 

 

 

 

 

 

 

 

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

 

3

 

 

 

 

 

 

 

 

 

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

 

4

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 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

 

27

 

 

 

 

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

49

 

 

 

 

 

 

 

 

Item 4.

Controls and Procedures

 

50

 

 

 

 

 

 

Part II.

 

Other Information

 

51

 

 

 

 

 

 

 

 

Item 1.

Legal Proceedings

 

51

 

 

 

 

 

 

 

 

Item 1A.

Risk Factors

 

51

 

 

 

 

 

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

51

 

 

 

 

 

 

 

 

Item 3.

Default Upon Senior Securities

 

51

 

 

 

 

 

 

 

 

Item 4.

Mine Safety Disclosures

 

51

 

 

 

 

 

 

 

 

Item 5.

Other Information

 

51

 

 

 

 

 

 

 

 

Item 6.

Exhibits

 

53

 

 

i


PART I—FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

 

SEACOR MARINE HOLDINGS INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

 

 

 

September 30, 2019

 

 

December 31, 2018

 

ASSETS

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

38,155

 

 

$

91,597

 

Restricted cash

 

 

4,016

 

 

 

1,657

 

Receivables:

 

 

 

 

 

 

 

 

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

 

 

58,954

 

 

 

55,048

 

Other

 

 

6,835

 

 

 

11,292

 

Inventories

 

 

1,408

 

 

 

1,977

 

Prepaid expenses and other

 

 

3,146

 

 

 

2,239

 

Assets held for sale

 

 

13,127

 

 

 

15,222

 

Total current assets

 

 

125,641

 

 

 

179,032

 

Property and Equipment:

 

 

 

 

 

 

 

 

Historical cost

 

 

1,070,374

 

 

 

1,116,583

 

Accumulated depreciation

 

 

(400,628

)

 

 

(461,399

)

 

 

 

669,746

 

 

 

655,184

 

Construction in progress

 

 

70,275

 

 

 

88,918

 

Net property and equipment

 

 

740,021

 

 

 

744,102

 

Right-of-Use Asset - Operating Leases

 

 

18,774

 

 

 

 

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

 

 

118,222

 

 

 

121,773

 

Construction Reserve Funds

 

 

18,161

 

 

 

28,061

 

Other Assets

 

 

3,422

 

 

 

3,690

 

Assets Held for Sale

 

 

16,265

 

 

 

26,280

 

 

 

$

1,040,506

 

 

$

1,102,938

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Current portion of operating lease liabilities

 

$

15,182

 

 

$

 

Current portion of long-term debt

 

 

23,446

 

 

 

16,812

 

Accounts payable and accrued expenses

 

 

26,507

 

 

 

18,089

 

Due to SEACOR Holdings

 

 

77

 

 

 

452

 

Accrued wages and benefits

 

 

3,289

 

 

 

4,122

 

Accrued income taxes

 

 

3,231

 

 

 

1,918

 

Deferred revenue

 

 

3,303

 

 

 

1,327

 

Accrued capital, repair and maintenance expenditures

 

 

15,992

 

 

 

18,757

 

Other current liabilities

 

 

16,557

 

 

 

19,614

 

Liabilities associated with assets held for sale

 

 

3,813

 

 

 

2,526

 

Total current liabilities

 

 

111,397

 

 

 

83,617

 

Long-Term Operating Lease Liabilities

 

 

12,878

 

 

 

 

Long-Term Debt

 

 

375,772

 

 

 

387,854

 

Conversion Option Liability on Convertible Senior Notes

 

 

4,543

 

 

 

5,276

 

Deferred Income Taxes

 

 

36,921

 

 

 

44,685

 

Deferred Gains and Other Liabilities

 

 

4,848

 

 

 

26,571

 

Total liabilities

 

 

546,359

 

 

 

548,003

 

Equity:

 

 

 

 

 

 

 

 

SEACOR Marine Holdings Inc. stockholders’ equity:

 

 

 

 

 

 

 

 

Common stock, $.01 par value, 60,000,000 shares authorized; 21,868,718 and 20,443,215 shares issued in 2019 and 2018, respectively

 

 

219

 

 

 

204

 

Additional paid-in capital

 

 

427,823

 

 

 

415,372

 

Retained earnings

 

 

64,929

 

 

 

126,834

 

Shares held in treasury of 42,504 and 4,007, respectively, at cost

 

 

(614

)

 

 

(91

)

Accumulated other comprehensive loss, net of tax

 

 

(21,105

)

 

 

(16,788

)

 

 

 

471,252

 

 

 

525,531

 

Noncontrolling interests in subsidiaries

 

 

22,895

 

 

 

29,404

 

Total equity

 

 

494,147

 

 

 

554,935

 

 

 

$

1,040,506

 

 

$

1,102,938

 

 

 

 

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

1


SEACOR MARINE HOLDINGS INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF LOSS

(in thousands, except share data)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Operating Revenues

 

$

54,700

 

 

$

58,169

 

 

$

152,422

 

 

$

144,670

 

Costs and Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating

 

 

27,211

 

 

 

38,400

 

 

 

97,747

 

 

 

99,839

 

Administrative and general

 

 

12,509

 

 

 

11,767

 

 

 

36,148

 

 

 

39,182

 

Lease expense

 

 

4,171

 

 

 

3,292

 

 

 

12,636

 

 

 

9,881

 

Depreciation and amortization

 

 

16,091

 

 

 

16,397

 

 

 

48,600

 

 

 

52,940

 

 

 

 

59,982

 

 

 

69,856

 

 

 

195,131

 

 

 

201,842

 

Gain (loss) on Asset Dispositions and Impairments, Net

 

 

861

 

 

 

(1,765

)

 

 

(2,719

)

 

 

(3,493

)

Operating Loss

 

 

(4,421

)

 

 

(13,452

)

 

 

(45,428

)

 

 

(60,665

)

Other Income (Expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

317

 

 

 

305

 

 

 

886

 

 

 

869

 

Interest expense

 

 

(7,362

)

 

 

(7,660

)

 

 

(22,659

)

 

 

(20,077

)

SEACOR Holdings guarantee fees

 

 

(26

)

 

 

(5

)

 

 

(87

)

 

 

(24

)

Loss on Debt Extinguishment

 

 

 

 

 

(638

)

 

 

 

 

 

(638

)

Derivative (gains) losses, net

 

 

3,057

 

 

 

4,387

 

 

 

734

 

 

 

(9,797

)

Foreign currency gains, net

 

 

(370

)

 

 

(296

)

 

 

(624

)

 

 

(967

)

Other, net

 

 

 

 

 

678

 

 

 

 

 

 

678

 

 

 

 

(4,384

)

 

 

(3,229

)

 

 

(21,750

)

 

 

(29,956

)

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

 

 

(8,805

)

 

 

(16,681

)

 

 

(67,178

)

 

 

(90,621

)

Income Tax Expense (Benefit)

 

 

1,277

 

 

 

1,248

 

 

 

(5,606

)

 

 

(13,304

)

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

 

 

(10,082

)

 

 

(17,929

)

 

 

(61,572

)

 

 

(77,317

)

Equity in Losses of 50% or Less Owned Companies

 

 

(1,325

)

 

 

(1,022

)

 

 

(11,879

)

 

 

(1,734

)

Loss from Continuing Operations

 

 

(11,407

)

 

 

(18,951

)

 

 

(73,451

)

 

 

(79,051

)

(Loss) Income on Discontinued Operations, Net of Tax

 

 

(6,834

)

 

 

3,185

 

 

 

(3,327

)

 

 

4,968

 

Net Loss

 

 

(18,241

)

 

 

(15,766

)

 

 

(76,778

)

 

 

(74,083

)

Net Income (Loss) attributable to Noncontrolling Interests in Subsidiaries

 

 

204

 

 

 

191

 

 

 

(4,395

)

 

 

(4,269

)

Net Loss attributable to SEACOR Marine Holdings Inc.

 

$

(18,445

)

 

$

(15,957

)

 

$

(72,383

)

 

$

(69,814

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations (Basic)

 

$

(0.49

)

 

$

(0.85

)

 

$

(2.95

)

 

$

(3.66

)

Discontinued operations (Basic)

 

$

(0.29

)

 

$

0.14

 

 

$

(0.14

)

 

$

0.24

 

 

 

$

(0.78

)

 

$

(0.71

)

 

$

(3.09

)

 

$

(3.42

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations (Diluted)

 

$

(0.49

)

 

$

(0.85

)

 

$

(2.95

)

 

$

(3.66

)

Discontinued operations (Diluted)

 

$

(0.29

)

 

$

0.14

 

 

$

(0.14

)

 

$

0.24

 

 

 

$

(0.78

)

 

$

(0.71

)

 

$

(3.09

)

 

$

(3.42

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Common Shares and Warrants Outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted shares

 

 

23,740,718

 

 

 

22,512,886

 

 

 

23,406,759

 

 

 

20,391,297

 

 

 

 

 

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

2


SEACOR MARINE HOLDINGS INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

 

September 30,

 

 

September 30,

 

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

Net Loss

 

$

(18,241

)

 

$

(15,766

)

 

$

(76,778

)

 

$

(74,083

)

 

Other Comprehensive Loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation losses

 

 

(1,626

)

 

 

(533

)

 

 

(1,902

)

 

 

(1,406

)

 

Derivative (losses) gains on cash flow hedges

 

 

(329

)

 

 

(32

)

 

 

(2,263

)

 

 

36

 

 

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

 

 

158

 

 

 

(305

)

 

 

357

 

 

 

(305

)

 

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

 

 

(152

)

 

 

46

 

 

 

(682

)

 

 

217

 

 

 

 

 

(1,949

)

 

 

(824

)

 

 

(4,490

)

 

 

(1,458

)

 

Income tax benefit (expense)

 

 

 

 

 

(11

)

 

173

 

 

 

(46

)

 

 

 

 

(1,949

)

 

 

(835

)

 

 

(4,317

)

 

 

(1,504

)

 

Comprehensive Loss

 

 

(20,190

)

 

 

(16,601

)

 

$

(81,095

)

 

 

(75,587

)

 

Comprehensive Income (Loss) attributable to Noncontrolling Interests in Subsidiaries

 

 

204

 

 

 

172

 

 

 

(4,395

)

 

 

(4,321

)

 

Comprehensive Loss attributable to SEACOR Marine Holdings Inc.

 

$

(20,394

)

 

$

(16,773

)

 

$

(76,700

)

 

$

(71,266

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

3


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 nine months ended September 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

 

 

 

 

 

 

 

 

3,891

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,891

 

Exercise of options

 

 

86,494

 

 

 

1

 

 

 

1,080

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,081

 

Exercise of Warrants

 

 

444,391

 

 

 

4

 

 

 

 

 

 

49

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

 

 

3

 

Restricted stock vesting

 

 

(38,448

)

 

 

 

 

 

(2

)

 

 

38,448

 

 

 

(522

)

 

 

 

 

 

 

 

 

 

 

 

(524

)

Director share awards

 

 

30,197

 

 

 

1

 

 

 

893

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

894

 

Cancellation of employee share awards

 

 

(1,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition of consolidated joint venture

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,114

)

 

 

(2,114

)

Dissolution of an entity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

62

 

 

 

 

 

 

 

 

 

62

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(72,383

)

 

 

 

 

 

(4,395

)

 

 

(76,778

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,317

)

 

 

 

 

 

(4,317

)

September 30, 2019

 

 

21,826,214

 

 

$

219

 

 

$

427,823

 

 

 

42,504

 

 

$

(614

)

 

$

64,929

 

 

$

(21,105

)

 

$

22,895

 

 

$

494,147

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2019

 

 

21,765,331

 

 

$

218

 

 

$

424,549

 

 

 

25,643

 

 

$

(374

)

 

$

83,312

 

 

$

(19,156

)

 

$

22,691

 

 

$

511,240

 

Amortization of employee share awards

 

 

 

 

 

 

 

 

2,302

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,302

 

Exercise of options

 

 

77,744

 

 

 

1

 

 

 

972

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

973

 

Restricted stock vesting

 

 

(16,861

)

 

 

 

 

 

 

 

 

16,861

 

 

 

(240

)

 

 

 

 

 

 

 

 

 

 

 

(240

)

Dissolution of an entity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

62

 

 

 

 

 

 

 

 

 

62

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18,445

)

 

 

 

 

 

204

 

 

 

(18,241

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,949

)

 

 

 

 

 

(1,949

)

September 30, 2019

 

 

21,826,214

 

 

$

219

 

 

$

427,823

 

 

 

42,504

 

 

$

(614

)