SOURCE: Trico Marine Services, Inc.

November 08, 2006 22:30 ET

Trico Marine Services Reports 2006 Third Quarter Results - Highest Quarterly Financial Results in Company History

HOUSTON, TX -- (MARKET WIRE) -- November 8, 2006 -- Trico Marine Services, Inc. (NASDAQ: TRMA) (the "Company" or "Trico") today announced its financial results for the quarter ended September 30, 2006 reporting net income of $17.8 million, or $1.17 per share (diluted).

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

                                       Three months        Three months
                                           ended              ended
                                     September 30, 2006    June 30, 2006
                                     ------------------    -------------
Charter hire revenues                           $67,042          $59,897
Operating income                                 23,961           20,249
Net income                                       17,821           12,139
Diluted EPS                                       $1.17            $0.80

Day Rates:
----------
Supply / Anchor Handling
 (North Sea class)                              $22,474          $19,245
Supply Vessels (Gulf class)                      11,639           11,665

Utilization:
------------
Supply / Anchor Handling
 (North Sea class)                                   92%              93%
Supply Vessels (Gulf class)                          71%              65%
Highlights for the Quarter
--  Achieved quarterly records for the following financial metrics -
    charter hire revenues, operating income and net income:
    --  Charter hire revenues of $67.0 million for the third quarter,
        representing a 12% increase over charter hire revenues of $59.9
        million for the second quarter of 2006.
    --  Operating income increased $3.7 million or 18% compared to the
        second quarter of 2006.
    --  Net income of $17.8 million, $1.17 per diluted share, for the third
        quarter, representing a 47% increase over net income of $12.1
        million for the second quarter of 2006.
--  Newbuild program augmented with the announcement of contracts to build
    two GPA 640 design platform supply vessels scheduled to be delivered
    during the first and third quarters of 2008.
Summary Results

Charter hire revenues for the quarter ended September 30, 2006 were $67.0 million and increased $7.1 million compared to the second quarter of 2006 primarily due to (i) increased average day rates for our North Sea vessels, bolstered by two of our anchor handling vessels operating in the spot market in a quarter that experienced record-setting day rates, and (ii) increased utilization for our Gulf class supply vessels.

During the third quarter of 2006, maintenance and classification (M&C) work was completed on two North Sea class vessels and six Gulf class supply vessels for a total cost of $6.1 million. In the second quarter of 2006, the Company completed M&C work on five North Sea class vessels and four Gulf class supply vessels, for a total cost of $7.2 million. M&C costs decreased $1.1 million as a result of the change in mix and volume of vessels undergoing M&C work.

President and Chief Executive Officer, Trevor Turbidy, commented, "Our net income growth and improved operating margins reflect increased charter hire revenues and a continued focus on controlling operating expenses. The North Sea market was extremely strong in both anchor handling and PSV class vessel day rates and utilization due to the lack of available equipment in the region and operators' ability to garner attractive contract terms in other markets. With regard to the Gulf of Mexico, we were delighted that our active vessels in the region earned substantial returns due to very attractive day rates and improved utilization, but we recognize the volatility of revenue drivers in this region and therefore, we remain focused on our long-term strategy of deploying vessels to growing international markets such as West Africa and Southeast Asia. In addition, our newbuild program progresses as we announced the construction of two platform supply vessels during the quarter and we will continue to evaluate strategic opportunities to renew our fleet that satisfy our global customers' requirements."

In October 2006, North Sea day rates averaged $22,735 with utilization of 96% while day rates for our Gulf class supply vessels averaged $11,077 with utilization of 70%, or 88% for all actively marketed vessels.

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, Mexico and Brazil. 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 has its principal office in Houston, Texas.

For more information about Trico Marine Services, Inc. visit us on the web at www.tricomarine.com.

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 OPERATIONS
(UNAUDITED)
(In thousands, except share and per share amounts)


                                                      Three       Three
                                                      months      months
                                                      ended       ended
                                                    September    June 30,
                                                     30, 2006      2006
                                                    ----------  ----------
Revenues:
Charter hire                                        $   67,042  $   59,897
Amortization of non-cash deferred revenues               1,127       1,313
Other vessel income                                        368         246
                                                    ----------  ----------
Total revenues                                          68,537      61,456

Operating expenses:
Direct vessel operating expenses and other              28,131      29,019
General and administrative                               7,229       6,717
Depreciation and amortization expense                    6,246       6,426
Insurance recovery from a loss on assets held for
 sale                                                        -        (605)
Loss on assets held for sale                             3,185           -
Gain on sales of assets                                   (215)       (350)
                                                    ----------  ----------
Total operating expenses                                44,576      41,207

Operating income                                        23,961      20,249

Interest expense                                          (279)       (403)
Amortization of deferred financing costs                   (37)        (46)
Foreign exchange gain (loss)                             2,246        (233)
Interest income                                          1,227         816
Other gains (loss)                                        (139)       (157)
                                                    ----------  ----------
Income before income taxes and noncontrolling
 interest in loss of consolidated subsidiary            26,979      20,226

Income tax expense                                       9,963       8,087
                                                    ----------  ----------

Income before noncontrolling interest in loss of
 consolidated subsidiary                                17,016      12,139
                                                    ----------  ----------

Noncontrolling interest in loss of consolidated
 subsidiary                                                805           -

Net income                                          $   17,821  $   12,139
                                                    ==========  ==========

Basic income per common share:
 Net income                                         $     1.22  $     0.83
                                                    ----------  ----------
 Average common shares outstanding                  14,634,937  14,600,247
                                                    ==========  ==========

Diluted income per common share:
 Net income                                         $     1.17  $     0.80
                                                    ----------  ----------
 Average common shares outstanding                  15,254,877  15,170,537
                                                    ==========  ==========



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


                                                  Predecessor  (Non-GAAP)
                            Successor Company       Company     Combined
                        ========================  ===========
                                     Period from  Period from    Results
                                      March 15,   January 1,     for the
                        Nine months      2005         2005     Nine months
                           ended       through      through       ended
                         September    September    March 14,    September
                          30, 2006     30, 2005       2005       30, 2005
                        -----------
Revenues:
Charter hire            $   177,421  $    91,347  $    29,869  $   121,216
Amortization of
 non-cash deferred
 revenues                     3,709        7,072            -        7,072
Other vessel income             695           74           17           91
                        -----------  -----------  -----------  -----------
Total revenues              181,825       98,493       29,886      128,379

Operating expenses:
Direct vessel operating
 expenses and other          78,352       46,848       16,217       63,065
General and
 administrative              19,688       13,226        4,030       17,256
Amortization of marine
 inspection costs                 -            -        2,055        2,055
Depreciation and
 amortization expense        18,774       13,744        6,703       20,447
Loss on assets held for
 sale                         3,185            -            -            -
Insurance recovery from
 a loss on assets held
 for sale                      (605)           -            -            -
Gain on sales of assets      (1,332)        (707)           2         (705)
                        -----------  -----------  -----------  -----------
Total operating
 expenses                   118,062       73,111       29,007      102,118

Operating income             63,763       25,382          879       26,261

Reorganization costs              -            -       (6,659)      (6,659)
Gain on debt discharge            -            -      166,459      166,459
Fresh-start adjustments           -            -     (219,008)    (219,008)
Interest expense             (1,163)      (4,935)      (1,940)      (6,875)
Amortization of
 deferred financing
 costs                         (133)        (209)         (50)        (259)
Foreign exchange gain         1,823          (99)          23          (76)
Interest income               2,653          192            -          192
Other gain (loss), net         (483)        (368)         (18)        (386)
                        -----------  -----------  -----------  -----------
Income before income
 taxes                       66,460       19,963      (60,314)     (40,351)

Income tax expense           24,927        7,742        1,047        8,789
                        -----------  -----------  -----------  -----------

Income before
 noncontrolling
 interest in loss of
 consolidated
 subsidiary                  41,533       12,221      (61,361)     (49,140)
                        -----------  -----------  -----------  -----------

Noncontrolling
 interest's loss in
 subsidiary                     805            -            -            -

Net income (loss)       $    42,338  $    12,221  $   (61,361) $   (49,140)
                        ===========  ===========  ===========  ===========

Basis income (loss) per
 common share:
 Net income (loss)      $      2.90  $      1.19  $     (1.66)
                        -----------  -----------  -----------
 Average common shares
  outstanding            14,614,919   10,247,469   36,908,505
                        ===========  ===========  ===========

Diluted income (loss)
 per common share:
 Net income (loss)      $      2.79  $      1.17  $     (1.66)
                        -----------  -----------  -----------
 Average common shares
  outstanding            15,174,006   10,416,505   36,908,505
                        ===========  ===========  ===========


                                 Three months ended     Nine months ended
                                ====================  ====================
                     Month of   September    June     September  September
                      October      30,        30,        30,        30,
                       2006       2006       2006       2006       2005
 Average Day Rates:  ---------  ---------  ---------  ---------  ---------
  PSV/AHTS (North
   Sea class)        $  22,735  $  22,474  $  19,245  $  19,177     16,199
  Supply (Gulf
   class)               11,077     11,639     11,665     11,189      5,801
  Crew/line handling     5,550      5,512      5,217      4,557      2,305

 Utilization:
  PSV/AHTS (North
   Sea class)               96%        92%        93%        93%        90%
  Supply (Gulf
   class)(1)                70%        71%        65%        66%        57%
  Crew/line handling        88%        87%        88%        87%        90%

 Average Number of
  Vessels:
  PSV/AHTS (North
   Sea class)             16.0       16.0       16.0       16.0       17.1
  Supply (Gulf
   class)                 44.0       44.0       44.2       44.4       48.0
  Crew/line handling       8.0        8.0        8.0        9.0       17.0

(1) Stacked vessels are included in the calculation of utilization.
Excluding stacked vessels, our supply vessel utilization was 88% during the
one month period ending October 31, 2006, 91% during the three month
periods ended September 30, 2006, 87% during the three month period ending
June 30, 2006, 89% and 91% during the nine months ended September 30, 2006
and 2005, respectively.



TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In thousands, except share and per share amounts)


                                           September 30,     December 31,
ASSETS                                          2006             2005
                                           --------------   --------------
Current assets:
 Cash and cash equivalents                 $      100,818   $       51,218
 Restricted cash                                      441              570
 Accounts receivable, net                          55,766           42,986
 Prepaid expenses and other current assets          3,992            3,484
 Assets held for sale                               1,500            5,853
                                           --------------   --------------
 Total current assets                             162,517          104,111

Property and equipment:
 Land and buildings                                 1,940            1,844
 Marine vessels                                   250,542          241,360
 Construction-in-progress                           9,703              235
 Transportation and other                           2,094            1,566
                                           --------------   --------------
                                                  264,279          245,005
Less accumulated depreciation and
 amortization                                      38,409           19,359
                                           --------------   --------------
 Net property and equipment                       225,870          225,646

Restricted cash - noncurrent                       11,732            7,253
Other assets                                        8,532            7,212
                                           --------------   --------------
 Total assets                              $      408,651   $      344,222
                                           ==============   ==============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
 Short-term and current maturities of debt $        7,407   $       36,610
 Accounts payable                                  10,963            6,295
 Accrued expenses                                  12,829           10,715
 Accrued insurance reserve                          3,029            3,426
 Accrued interest                                     273              288
 Income taxes payable                               1,075              518
                                           --------------   --------------
 Total current liabilities                         35,576           57,852

Long-term debt, including premiums                  9,249            9,928
Deferred income taxes                              56,850           46,055
Deferred revenues on unfavorable contracts          1,920            5,379
Other liabilities                                   2,165            2,576
                                           --------------   --------------
 Total liabilities                                105,760          121,790

Commitments and contingencies                           -                -
Non-controlling Interest                           16,490                -
                                           --------------   --------------

Stockholders' equity:
Preferred stock, $.01 par value                         -                -
Common stock, $.01 par value                          148              146
Warrants - Series A                                 1,649            1,649
Warrants - Series B                                   634              634
Additional paid-in capital                        227,636          208,143
Retained earnings                                  62,438           20,100
Cumulative foreign currency translation
 adjustment                                        (6,104)          (8,240)
                                           --------------   --------------
Total stockholders' equity                        286,401          222,432
                                           --------------   --------------

Total liabilities and stockholders' equity $      408,651   $      344,222
                                           ==============   ==============



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


                                         Successor            Predecessor
                                          Company               Company
                                ===========================   ============
                                               Period from    Period from
                                                 March 15,     January 1,
                                 Nine months       2005          2005
                                    ended        through        through
                                September 30,  September 30,   March 14,
                                    2006           2005           2005
                                ------------   ------------   ------------
Net income (loss)               $     42,338   $     12,221   $    (61,361)
 Adjustments to reconcile net
  income (loss) to net cash
  provided by operating
  activities:
  Depreciation and amortization       18,884         13,918          8,808
  Amortization of non-cash
   deferred revenues (see Note
   4)                                 (3,709)        (7,072)             -
  Deferred marine inspection
   costs                                   -              -         (1,277)
  Deferred income taxes               22,961          6,480          1,397
  Gain on debt discharge                   -              -       (166,459)
  Fresh-start adjustments                  -              -        219,008
  Loss (gain) on sales of
   assets                             (1,332)          (707)             2
  Loss on assets held for sale         3,185              -              -
  Provision for doubtful
   accounts                            1,204            100             40
  Stock-based compensation             1,558          1,809              9
  Noncontrolling interest in
   loss of consolidated
   subsidiary                           (805)             -              -
  Change in operating assets
   and liabilities:
   Accounts receivable               (13,574)        (9,410)         2,404
   Prepaid expenses and other
    current assets                      (449)          (762)          (630)
   Accounts payable and accrued
    expenses                           6,564         (5,815)         7,676
   Other, net                         (1,728)        (1,294)          (449)
                                ------------   ------------   ------------
   Net cash provided by
    operating activities              75,097          9,468          9,168
                                ------------   ------------   ------------

Cash flows from investing
 activities:
 Purchases of property and
  equipment                          (12,179)        (1,264)          (947)
 Proceeds from sales of assets         2,795          3,324              -
 Increase in restricted cash          (4,324)          (685)           508
 Other, net                                -              -           (211)
                                ------------   ------------   ------------
   Net cash provided by (used
    in) investing activities         (13,708)         1,375           (650)
                                ------------   ------------   ------------

Cash flows from financing
 activities:
 Net proceeds from issuance of
  common stock                           608          1,801              -
 Proceeds from issuance of debt       15,878         60,550         54,550
 Repayment of debt                   (47,405)       (77,339)       (56,771)
 Contribution from
  non-controlling interest            20,910              -              -
 Deferred financing costs and
  other                                    -              -           (375)
                                ------------   ------------   ------------
   Net cash used in financing
    activities                       (10,009)       (14,988)        (2,596)
                                ------------   ------------   ------------

Effect of exchange rate changes
 on cash and cash equivalents         (1,780)          (518)            62

Net increase (decrease) in cash
 and cash equivalents                 49,600         (4,663)         5,984
Cash and cash equivalents at
 beginning of period                  51,218         19,154         13,170
                                ------------   ------------   ------------
Cash and cash equivalents at
 end of period                  $    100,818   $     14,491   $     19,154
                                ============   ============   ============

Contact Information

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