SEC Filing | SEACOR Marine Holdings Inc.

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smhi-10q_20200930.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, 2020 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 Lane, 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

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.

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 30, 2020 was 23,435,254. The Registrant has no other class of common stock outstanding.

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, 2020 and December 31, 2019	1
		Condensed Consolidated Statements of Loss for the Three and Nine Months Ended September 30, 2020 and 2019	2

		Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended September 30, 2020 and 2019	3

		Condensed Consolidated Statements of Changes in Equity for the Three and Nine Months Ended September 30, 2020 and 2019	4

		Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2020 and 2019	6

		Notes to Condensed Consolidated Financial Statements	7

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	53

	Item 4.	Controls and Procedures	54

Part II.	Other Information		56

	Item 1.	Legal Proceedings	56

	Item 1A.	Risk Factors	56

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	59

	Item 3.	Default Upon Senior Securities	59

	Item 4.	Mine Safety Disclosures	59

	Item 5.	Other Information	59

	Item 6.	Exhibits	60

PART I—FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS

SEACOR MARINE HOLDINGS INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

	September 30, 2020			December 31, 2019
ASSETS
Current Assets:
Cash and cash equivalents	$	45,179		$	83,943
Restricted cash		3,352			3,104
Receivables:
Trade, net of allowance for credit loss accounts of $850 and $455 in 2020 and 2019, respectively		54,935			49,128
Other		17,914			18,531
Receivable from SEACOR Holdings		18,814			—
Tax Receivable		11,770			—
Inventories		573			1,228
Prepaid expenses and other		3,598			2,612
Total current assets		156,135			158,546
Property and Equipment:
Historical cost		1,078,169			976,978
Accumulated depreciation		(334,387	)		(358,962	)
		743,782			618,016
Construction in progress		56,709			74,344
Net property and equipment		800,491			692,360
Right-of-Use Asset - Operating Leases		8,327			17,313
Right-of-Use Asset - Finance Leases		137			—
Investments, at Equity, and Advances to 50% or Less Owned Companies		88,933			124,680
Construction Reserve Funds		—			12,893
Other Assets		3,152			3,401
	$	1,057,175		$	1,009,193
LIABILITIES AND EQUITY
Current Liabilities:
Current portion of operating lease liabilities		9,632		$	15,099
Current Portion of financing lease liabilities		27			—
Current portion of long-term debt:
Recourse		46,464			17,802
Non-recourse		5,644			—
Accounts payable and accrued expenses		29,542			25,691
Due to SEACOR Holdings		—			74
Accrued wages and benefits		1,551			1,832
Accrued interest		2,887			731
Deferred revenue and unearned revenue		3,131			5,327
Accrued capital, repair and maintenance expenditures		11,164			15,997
Accrued insurance deductibles and premiums		2,315			3,564
Derivatives		4,103			3,009
Other current liabilities		5,027			5,691
Total current liabilities		121,487			94,817
Long-Term Operating Lease Liabilities		5,694			9,822
Long-Term Financing Lease Liabilities		113			—
Long-Term Debt:
Recourse		315,326			239,939
Non-recourse		137,638			140,312
Conversion Option Liability on Convertible Senior Notes		1			5,205
Deferred Income Taxes		36,452			33,905
Deferred Gains and Other Liabilities		3,810			6,269
Total liabilities		620,521			530,269
Equity:
SEACOR Marine Holdings Inc. stockholders’ equity:
Common stock, $.01 par value, 60,000,000 shares authorized; 23,435,234 and 21,928,674 shares issued in 2020 and 2019, respectively		235			219
Additional paid-in capital		450,320			429,318
(Accumulated Deficit) Retained earnings		(13,023	)		27,076
Shares held in treasury of 73,284 and 47,187, respectively, at cost		(848	)		(669	)
Accumulated other comprehensive gain (loss), net of tax		(380	)		1,548
		436,304			457,492
Noncontrolling interests in subsidiaries		350			21,432
Total equity		436,654			478,924
	$	1,057,175		$	1,009,193

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

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,
	2020			2019			2020			2019
Operating Revenues	$	45,697			54,700		$	129,318		$	152,422
Costs and Expenses:
Operating		29,128			27,211			77,661			97,747
Administrative and general		10,155			11,462			35,480			32,798
Lease expense		1,390			4,153			6,152			12,589
Depreciation and amortization		16,613			16,091			46,927			48,600
		57,286			58,917			166,220			191,734
Losses on Asset Dispositions and Impairments, Net		233			861			(15,792	)		(2,719	)
Operating Loss		(11,356	)		(3,356	)		(52,694	)		(42,031	)
Other Income (Expense):
Interest income		50			317			1,255			886
Interest expense		(8,598	)		(7,362	)		(23,231	)		(22,659	)
SEACOR Holdings guarantee fees		(11	)		(26	)		(36	)		(87	)
Derivative gains, net		5			3,057			5,204			734
Foreign currency losses, net		(853	)		(370	)		(959	)		(624	)
		(9,407	)		(4,384	)		(17,767	)		(21,750	)
Loss from Continuing Operations Before Income Tax Benefit and Equity in Earnings of 50% or Less Owned Companies		(20,763	)		(7,740	)		(70,461	)		(63,781	)
Income Tax Expense (Benefit)		(3,119	)		1,277			(24,868	)		(5,606	)
Loss from Continuing Operations Before Equity in Earnings of 50% or Less Owned Companies		(17,644	)		(9,017	)		(45,593	)		(58,175	)
Equity in Earnings Gains (Losses) of 50% or Less Owned Companies		(433	)		(1,325	)		1,458			(11,879	)
Loss from Continuing Operations		(18,077	)		(10,342	)		(44,135	)		(70,054	)
Loss on Discontinued Operations, Net of Tax (see Note 15)		—			(7,899	)		—			(6,724	)
Net Loss		(18,077	)		(18,241	)		(44,135	)		(76,778	)
Net Income (Loss) Attributable to Noncontrolling Interests in Subsidiaries		4			204			(4,036	)		(4,395	)
Net Loss attributable to SEACOR Marine Holdings Inc.	$	(18,081	)		(18,445	)	$	(40,099	)	$	(72,383	)

Basic and Diluted Loss Per Common Share and Warrants of SEACOR Marine Holdings Inc.
Continuing operations	$	(0.72	)		(0.34	)	$	(1.63	)	$	(2.80	)
Discontinued operations		—			(0.44	)		—		$	(0.29	)
	$	(0.72	)		(0.78	)	$	(1.63	)	$	(3.09	)

Weighted Average Common Stock and Warrants Outstanding:
Basic and diluted shares		24,989,977			23,740,718			24,611,666			23,406,759

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

SEACOR MARINE HOLDINGS INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2020			2019			2020			2019
Net Loss	$	(18,077	)	$	(18,241	)	$	(44,135	)	$	(76,778	)
Other Comprehensive Loss:
Foreign currency translation gains (losses)		2,068			(1,626	)		(385	)		(1,902	)
Derivative losses on cash flow hedges		(82	)		(329	)		(2,028	)		(2,263	)
Reclassification of derivative losses on cash flow hedges to interest expense		457			158			964			357
Reclassification of derivative losses on cash flow hedges to equity in earnings of 50% or less owned companies		(282	)		(152	)		(479	)		(682	)
		2,161			(1,949	)		(1,928	)		(4,490	)
Income Tax Benefit		—			—			—			173
		2,161			(1,949	)		(1,928	)		(4,317	)
Comprehensive Loss		(15,916	)		(20,190	)	$	(46,063	)		(81,095	)
Comprehensive Income (Loss) Attributable to Noncontrolling Interests in Subsidiaries		4			204			(4,036	)		(4,395	)
Comprehensive Loss attributable to SEACOR Marine Holdings Inc.	$	(15,920	)	$	(20,394	)	$	(42,027	)	$	(76,700	)

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

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

Held in

Treasury

Stock

Retained

Earnings

Accumulated

Other