SOURCE: Trico Marine Services, Inc.

October 31, 2007 20:02 ET

Trico Marine Services Reports Third Quarter 2007 Earnings With Record Charter Hire Revenues

HOUSTON, TX--(Marketwire - October 31, 2007) - Trico Marine Services, Inc. (NASDAQ: TRMA) (the "Company" or "Trico") today announced its financial results for the quarter ended September 30, 2007 reporting quarterly net income of $13.2 million or $0.87 per share (diluted) significantly higher than the second quarter 2007 net income of $4.4 million or $0.29 per share (diluted). Charter hire revenues for the third quarter of 2007 were $68.5 million, a record high for the Company, up 18% from $57.9 million in the prior quarter.

Summary Results

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


                                              For the three
                                              months ended   For the three
                                              September 30,  months ended
                                                  2007       June 30, 2007
                                              -------------  -------------
Charter hire revenues                         $      68,525  $      57,899
Operating income                                     22,310          5,291
Net income                                           13,177          4,434
Diluted EPS                                   $        0.87  $        0.29

Day Rates:
Supply / Anchor Handling (North Sea class)    $      27,747  $      23,885
Supply Vessels (Gulf class) (1)                       9,723          9,724

Utilization:
Supply / Anchor Handling (North Sea class)               94%            86%
Supply Vessels (Gulf class) (1)                          84%            74%


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

Third Quarter Results

Charter hire revenues increased by $10.6 million compared to the second quarter of 2007, primarily due to higher day rates for Trico's North Sea class vessels, and also higher utilization for those vessels as a result of less time completing maintenance and classification (M & C) requirements. Rates for AHTS vessels in the third quarter continued to be robust at an average rate of $39,986 per day.

Direct vessel operating expenses decreased $7.6 million in the third quarter of 2007, down over 20% compared with the prior quarter primarily due to reduced M & C costs on North Sea class vessels. In the third quarter, M&C work was completed on two North Sea class vessels, compared to four in the prior quarter.

In addition, general and administrative (G&A) expenses increased in comparison to the second quarter by $2.2 million primarily due to changes to the Company's executive management team.

Joseph S. Compofelice, Trico's Chairman and CEO, commented, "Trico's quarterly results were in line with our expectations and reflect significant improvements in utilization and cost control over the second quarter of this year during which the higher number of dry dockings increased vessel operating expenses and reduced utilization in the North Sea market."

Mr. Compofelice continued, "Looking ahead, activity levels remain strong in the North Sea, West Africa and Mexico. In our U.S. Gulf of Mexico market, rates and activity levels started to weaken late in the third quarter and the Company announced the redeployment of four Gulf class vessels to international markets, where prospects for long term contracts and predictable cash flows are in line with our strategic objectives. This move reflects our philosophy of pursuing longer term cash flows in higher growth markets whenever possible. We will continue to focus on expanding our international footprint while managing our operating and overhead costs. Our strong balance sheet provides us the opportunity to pursue strategic opportunities that involve long term contracts for service offerings reflective of higher growth markets such as subsea and other specialized markets as well as other opportunities that will bring long term value to all Trico shareholders."

For the period October 1 through October 26, 2007, day rates for North Sea class vessels averaged $31,092 with utilization of 89% while day rates for our Gulf class supply vessels averaged $9,396 with utilization of 73%, or 75% for actively marketed vessels.

Stock Repurchase Program

In July 2007, the Company's Board of Directors authorized the repurchase of up to $100 million of the company's common stock in open-market transactions including block purchases or in privately negotiated transactions.

During the third quarter the Company repurchased approximately 570,000 shares of its common stock for $17.6 million at an average price of $30.87 per share. Of this amount, pursuant to our agreement with the Company's largest shareholder, Kistefos AS, the Company repurchased a total of 114,000 shares of its common stock during this period from Kistefos.

Conference Call Information

Trico has scheduled a conference call to review third quarter 2007 results on November 1, 2007 at 8:30 a.m. eastern time. To participate in the conference call, callers in the United States and Canada can dial (877) 502-9272 and international callers can dial (913) 981-5581. The Conference I.D. for callers is 1936094.

The call will be available for replay approximately one hour after the call is completed until November 14, 2007. For callers in the United States and Canada, the toll-free number for the replay is (888) 203-1112. For international callers the number is (719) 457-0820. The Conference I.D. for all callers to access the replay is 1936094.

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. 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.

TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In thousands, except share and per share amounts)

                                              Three months
                                                  ended      Three months
                                              September 30,      ended
                                                  2007       June 30, 2007
                                              -------------  -------------
Revenues:
Charter hire                                  $      68,525  $      57,899
Other vessel income                                   1,921            811
                                              -------------  -------------
Total revenues                                       70,446         58,710

Operating expenses:
Direct vessel operating expenses and other           29,367         36,975
General and administrative                           12,561         10,350
Depreciation and amortization expense                 6,209          6,114
Gain on sales of assets                                  (1)           (20)
                                              -------------  -------------
Total operating expenses                             48,136         53,419

Operating income                                     22,310          5,291

Interest expense                                     (1,106)        (1,040)
Amortization of deferred financing costs               (208)          (206)
Interest income                                       4,127          3,981
Other income (loss), net                             (2,091)          (618)
                                              -------------  -------------
Income before income taxes and noncontrolling
 interest in loss of consolidated subsidiary         23,032          7,408

Income tax expense                                    9,906          3,472
                                              -------------  -------------

Income before noncontrolling interest in loss
 of consolidated subsidiary                          13,126          3,936
                                              -------------  -------------

Noncontrolling interest in loss of
 consolidated subsidiary                                 51            498
                                              -------------  -------------

Net income                                    $      13,177  $       4,434
                                              =============  =============

Basic income per common share:
   Net income                                 $        0.90  $        0.30
                                              =============  =============
   Average common shares outstanding             14,561,711     14,714,433
                                              =============  =============
Diluted income per common share:
   Net income                                 $        0.87  $        0.29
                                              =============  =============
   Average common shares outstanding             15,133,175     15,436,810
                                              =============  =============



TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In thousands)

                                               Nine months
                                                  ended       Nine months
                                              September 30,      ended
                                                  2007       June 30, 2007
                                              -------------  -------------
Revenues:
Charter hire                                  $     187,091  $     177,421
Other vessel income                                   4,034          4,404
                                              -------------  -------------
Total revenues                                      191,125        181,825

Operating expenses:
Direct vessel operating expenses and other           97,751         78,352
General and administrative                           30,059         19,688
Depreciation and amortization expense                17,789         18,774
Insurance recovery from a loss on assets held
 for sale                                                 -           (605)
Loss on assets held for sale                              -          3,185
Gain on sales of assets                              (2,858)        (1,332)
                                              -------------  -------------
Total operating expenses                            142,741        118,062

Operating income                                     48,384         63,763

Interest expense                                     (2,929)        (1,163)
Amortization of deferred financing costs               (564)          (133)
Interest income                                      10,827          2,653
Other income (loss), net                             (3,403)         1,340
                                              -------------  -------------
Income before income taxes and noncontrolling
 interest in loss of consolidated subsidiary         52,315         66,460

Income tax expense                                   22,322         24,927
                                              -------------  -------------

Income before noncontrolling interest in loss
 of consolidated subsidiary                          29,993         41,533
                                              =============  =============

Noncontrolling interest in loss of
 consolidated subsidiary                              2,200            805
                                              -------------  -------------

Net income                                    $      32,193  $      42,338
                                              =============  =============


Basic income per common share:
   Net income                                 $        2.19  $        2.90
                                              -------------  -------------
   Average common shares outstanding             14,719,163     14,614,919
                                              -------------  -------------

Diluted income per common share:
   Net income                                 $        2.10  $        2.79
                                              -------------  -------------
   Average common shares outstanding             15,346,571     15,174,006
                                              -------------  -------------





                          For the
                        Period from
                        October 1,  Three months ended  Nine months ended
                       2007 through ------------------  ------------------
                        October 26,  Sept 30,   June 30, Sept 30,  Sept 30,
Average Day Rates:        2007       2007      2007      2007      2006
                          --------  --------  --------  --------  --------
  PSV/AHTS (North Sea
   class)(1)              $ 31,092  $ 27,747  $ 23,885  $ 25,426  $ 19,177
  Supply (Gulf class)(2)     9,396     9,723     9,724     9,722    11,189
  Crew/line handling         5,904     5,885     5,996     5,727     4,557

Utilization:
  PSV/AHTS (North Sea
   class)                       89%       94%       86%       91%       93%
  Supply (Gulf
   class)(2)(3)                 73%       84%       74%       76%       66%
  Crew/line handling            80%       81%       75%       80%       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      36.0      38.5      38.6      44.4
  Crew/line handling           7.0       7.0       7.0       7.3       9.0


(1) Anchor handling, towing and supply vessels.
(2) Effective May 2007, five of our Gulf class supply vessels entered into
    bareboat contracts which decreased average supply vessel day rates.
    Including the five vessels under bareboat agreements, our average day
    rates were $7,985, $8,429, $8,976, $8,994 and $11,189 with utilization
    of 76%, 86%, 75%, 77% and 66% for the period from October 1, 2007
    through October 26, 2007 and the three month period ended September 30,
    2007, the three month period ending June 30, 2007, and the nine month
    periods ended September 30, 2007 and 2006, respectively.
(3) Stacked vessels for the Gulf supply vessel class are included in
    the average number of vessels and the calculation of utilization.
    Excluding stacked vessels, our utilization was 75%, 87%, 81%, 83% and
    89%, for the period from October 1, 2007 through October 26, 2007 and
    the three month period ended September 30, 2007, the three month period
    ended June 30, 2007, and the nine month periods ended September 30,
    2007 and 2006, respectively.




TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)


                                               (UNAUDITED)
                                              September 30,  December 31,
ASSETS                                            2007           2006
                                              -------------  -------------
Current assets:
  Cash and cash equivalents                   $     271,598  $     114,173
  Available for sale securities                      46,326          2,475
  Restricted cash                                     4,186            716
  Accounts receivable, net                           64,961         58,787
  Prepaid expenses and other current assets           3,575          4,036
  Assets held for sale                                2,224          3,048
                                              -------------  -------------
    Total current assets                            392,870        183,235

Property and equipment:
  Land and buildings                                  2,010          1,995
  Marine vessels                                    285,445        256,125
  Construction-in-progress                           28,192         15,876
  Transportation and other                            3,851          2,328
                                              -------------  -------------
                                                    319,498        276,324
Less accumulated depreciation and
 amortization                                        65,526         44,476
                                              -------------  -------------
  Net property and equipment                        253,972        231,848

Restricted cash - noncurrent                          3,770         11,842
Other assets                                         14,966          8,397
                                              -------------  -------------
  Total assets                                $     665,578  $     435,322
                                              =============  =============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Short-term and current maturities of debt   $       3,258  $       1,258
  Accounts payable                                   14,128         11,055
  Accrued expenses                                   19,958         14,590
  Accrued insurance reserve                           2,678          3,062
  Accrued interest                                    1,160            110
  Income taxes payable                                1,916          2,092
                                              -------------  -------------
    Total current liabilities                        43,098         32,167

Long-term debt, including premiums                  157,931          8,605
Deferred income taxes                                84,330         63,327
Other liabilities                                     3,624          2,199
                                              -------------  -------------
  Total liabilities                                 288,983        107,674

Noncontrolling interest                              13,110         15,310

Commitments and contingencies                             -              -
Stockholders' equity:
Preferred stock, $.01 par value                           -              -
Common stock, $.01 par value                            150            148
Warrants - Series A                                   1,646          1,646
Warrants - Series B                                     633            634
Additional paid-in capital                          245,166        231,218
Retained earnings                                   110,875         78,824
Treasury Stock, at cost                             (17,604)             -
Pension and postretirement, net of taxes of
 $0.3 million                                          (769)          (708)
Cumulative foreign currency translation
 adjustment                                          23,388            576
                                              -------------  -------------
Total stockholders' equity                          363,485        312,338
                                              -------------  -------------

Total liabilities and stockholders' equity    $     665,578  $     435,322
                                              =============  =============




TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands)

                                              Nine months    Nine months
                                                 ended          ended
                                              September 30,  September 30,
                                                  2007           2006
                                              -------------  -------------
Net income                                    $      32,193  $      42,338
  Adjustments to reconcile net income to net
   cash provided by operating activities:
    Depreciation and amortization                    18,273         18,884
    Amortization of deferred revenues                  (663)        (3,709)
    Deferred income taxes                            19,264         22,961
    Gain on sales of assets                          (2,858)        (1,332)
    Impairment on assets held for sale                    -          3,185
    Provision for doubtful accounts                     424          1,204
    Stock compensation expense                        3,191          1,558
    Noncontrolling interest in loss of
     consolidated subsidiary                         (2,200)          (805)
    Change in operating assets and liabilities:
      Accounts receivable                            (2,679)       (13,574)
      Prepaid expenses and other current
       assets                                           581           (449)
      Accounts payable and accrued expenses           6,774          6,564
      Other, net                                     (1,971)        (1,728)
                                              -------------  -------------
      Net cash provided by operating
       activities                                    70,329         75,097
                                              -------------  -------------

Cash flows from investing activities:
  Purchases of property and equipment               (18,573)       (12,179)
  Proceeds from sales of assets                       4,554          2,795
  Sales of available-for-sale securities            (67,530)             -
  Purchase of available-for-sale securities          23,679              -
  Increase (decrease) in restricted cash              4,713         (4,324)
                                              -------------  -------------
    Net cash used in investing activities           (53,157)       (13,708)
                                              -------------  -------------

Cash flows from financing activities:
  Net proceeds from issuance of common stock          1,810            608
  Proceeds from issuance of debt                    152,000         15,878
  Debt issuance cost                                 (4,804)             -
  Repayment of debt                                    (629)       (47,405)
  Purchases of treasury stock, at cost              (17,604)             -
  Contributions from non-controlling interest             -         20,910
                                              -------------  -------------
    Net cash provided by financing activities       130,773        (10,009)
                                              -------------  -------------

Effect of exchange rate changes on cash and
 cash equivalents                                     9,480         (1,780)
                                              -------------  -------------

Net increase  in cash and cash equivalents          157,425         49,600
Cash and cash equivalents at beginning of
 period                                             114,173         51,218
                                              -------------  -------------
Cash and cash equivalents at end of period    $     271,598  $     100,818
                                              =============  =============

Contact Information

  • Contact info:
    Geoff Jones
    VP & Chief Financial Officer
    (713) 780-9926