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SEACOR Marine Holdings Inc. - Quarter Report: 2023 March (Form 10-Q)

10-Q

 

 

 

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 March 31, 2023 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 April 28, 2023 was 27,096,812. 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 March 31, 2023 and December 31, 2022

 

1

 

 

 

Condensed Consolidated Statements of Income (Loss) for the Three Months Ended March 31, 2023 and 2022

 

2

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2023 and 2022

 

3

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statements of Changes in Equity for the Three Months Ended March 31, 2023 and 2022

 

4

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2023 and 2022

 

5

 

 

 

 

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements

 

6

 

 

 

 

 

 

 

 

Item 2.

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

 

20

 

 

 

 

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

37

 

 

 

 

 

 

 

 

Item 4.

Controls and Procedures

 

37

 

 

 

 

 

 

Part II.

 

Other Information

 

38

 

 

 

 

 

 

 

 

Item 1.

Legal Proceedings

 

38

 

 

 

 

 

 

 

 

Item 1A.

Risk Factors

 

38

 

 

 

 

 

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

38

 

 

 

 

 

 

 

 

Item 3.

Default Upon Senior Securities

 

38

 

 

 

 

 

 

 

 

Item 4.

Mine Safety Disclosures

 

38

 

 

 

 

 

 

 

 

Item 5.

Other Information

 

38

 

 

 

 

 

 

 

 

Item 6.

Exhibits

 

39

 

i


PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SEACOR MARINE HOLDINGS INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

 

 

 

March 31, 2023

 

 

December 31, 2022

 

ASSETS

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

40,570

 

 

$

39,963

 

Restricted cash

 

 

3,082

 

 

 

3,082

 

Receivables:

 

 

 

 

 

 

Trade, net of allowance for credit loss accounts of $1,546 and $1,650 as of March 31, 2023 and December 31, 2022, respectively

 

 

60,114

 

 

 

54,388

 

Other

 

 

11,913

 

 

 

7,638

 

Note receivable

 

 

10,000

 

 

 

15,000

 

Tax receivable

 

 

445

 

 

 

578

 

Inventories

 

 

2,207

 

 

 

2,123

 

Prepaid expenses and other

 

 

3,233

 

 

 

3,054

 

Assets held for sale

 

 

 

 

 

6,750

 

Total current assets

 

 

131,564

 

 

 

132,576

 

Property and Equipment:

 

 

 

 

 

 

Historical cost

 

 

969,328

 

 

 

967,683

 

Accumulated depreciation

 

 

(324,197

)

 

 

(310,778

)

 

 

645,131

 

 

 

656,905

 

Construction in progress

 

 

8,540

 

 

 

8,111

 

Net property and equipment

 

 

653,671

 

 

 

665,016

 

Right-of-use asset - operating leases

 

 

5,984

 

 

 

6,206

 

Right-of-use asset - finance leases

 

 

6,654

 

 

 

6,813

 

Investments, at equity, and advances to 50% or less owned companies

 

 

3,594

 

 

 

3,024

 

Other assets

 

 

2,079

 

 

 

1,995

 

Total assets

 

$

803,546

 

 

$

815,630

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Current portion of operating lease liabilities

 

$

1,764

 

 

$

2,358

 

Current portion of finance lease liabilities

 

 

563

 

 

 

468

 

Current portion of long-term debt:

 

 

 

 

 

 

Recourse

 

 

60,523

 

 

 

61,512

 

Accounts payable and accrued expenses

 

 

44,255

 

 

 

37,954

 

Due to SEACOR Holdings

 

 

264

 

 

 

264

 

Accrued wages and benefits

 

 

5,025

 

 

 

4,361

 

Accrued interest

 

 

4,675

 

 

 

2,305

 

Deferred revenue and unearned revenue

 

 

1,487

 

 

 

2,333

 

Accrued capital, repair, and maintenance expenditures

 

 

1,327

 

 

 

2,748

 

Accrued insurance deductibles and premiums

 

 

2,837

 

 

 

2,428

 

Accrued professional fees

 

 

873

 

 

 

1,114

 

Other current liabilities

 

 

3,961

 

 

 

3,580

 

Total current liabilities

 

 

127,554

 

 

 

121,425

 

Long-term operating lease liabilities

 

 

4,474

 

 

 

4,739

 

Long-term finance lease liabilities

 

 

6,644

 

 

 

6,781

 

Long-term Debt:

 

 

 

 

 

 

Recourse

 

 

248,974

 

 

 

254,653

 

Non-recourse

 

 

5,476

 

 

 

5,466

 

Deferred income taxes

 

 

39,120

 

 

 

40,779

 

Deferred gains and other liabilities

 

 

2,264

 

 

 

2,641

 

Total liabilities

 

 

434,506

 

 

 

436,484

 

Equity:

 

 

 

 

 

 

SEACOR Marine Holdings Inc. stockholders’ equity:

 

 

 

 

 

 

Common stock, $.01 par value, 60,000,000 shares authorized; 27,574,544 and 26,950,799 shares issued as of March 31, 2023 and December 31, 2022, respectively

 

 

279

 

 

 

272

 

Additional paid-in capital

 

 

467,896

 

 

 

466,669

 

Accumulated deficit

 

 

(102,700

)

 

 

(93,111

)

Shares held in treasury of 468,966 and 248,638 as of March 31, 2023 and December 31, 2022, respectively, at cost

 

 

(4,119

)

 

 

(1,852

)

Accumulated other comprehensive income, net of tax

 

 

7,363

 

 

 

6,847

 

 

 

368,719

 

 

 

378,825

 

Noncontrolling interests in subsidiaries

 

 

321

 

 

 

321

 

Total equity

 

 

369,040

 

 

 

379,146

 

Total liabilities and equity

 

$

803,546

 

 

$

815,630

 

 

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 INCOME (LOSS)

(in thousands, except share data)

 

 

 

Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Operating Revenues

 

$

59,973

 

 

$

45,591

 

Costs and Expenses:

 

 

 

 

 

 

Operating

 

 

37,273

 

 

 

39,496

 

Administrative and general

 

 

11,632

 

 

 

9,924

 

Lease expense

 

 

720

 

 

 

1,060

 

Depreciation and amortization

 

 

13,762

 

 

 

14,371

 

 

 

63,387

 

 

 

64,851

 

Gains on Asset Dispositions and Impairments, Net

 

 

3,599

 

 

 

2,139

 

Operating Income (Loss)

 

 

185

 

 

 

(17,121

)

Other Income (Expense):

 

 

 

 

 

 

Interest income

 

 

460

 

 

 

29

 

Interest expense

 

 

(8,788

)

 

 

(6,627

)

Derivative losses, net

 

 

 

 

 

(34

)

Foreign currency (losses) gains, net

 

 

(825

)

 

 

821

 

 

 

(9,153

)

 

 

(5,811

)

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

 

 

(8,968

)

 

 

(22,932

)

Income Tax Expense (Benefit)

 

 

1,157

 

 

 

(2,421

)

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

 

 

(10,125

)

 

 

(20,511

)

Equity in Earnings of 50% or Less Owned Companies

 

 

536

 

 

 

5,674

 

Net Loss attributable to SEACOR Marine Holdings Inc.

 

$

(9,589

)

 

$

(14,837

)

 

 

 

 

 

 

Net Loss Per Share:

 

 

 

 

 

 

Basic

 

$

(0.36

)

 

$

(0.56

)

Diluted

 

 

(0.36

)

 

 

(0.56

)

Weighted Average Common Stock and Warrants Outstanding:

 

 

 

 

 

 

Basic

 

 

26,822,391

 

 

 

26,379,293

 

Diluted

 

 

26,822,391

 

 

 

26,379,293

 

 

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 INCOME (LOSS)

(in thousands)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2023

 

 

2022

 

Net Loss

 

$

(9,589

)

 

$

(14,837

)

Other Comprehensive Income:

 

 

 

 

 

 

Foreign currency translation gains (losses), net

 

 

668

 

 

 

(714

)

Derivative gains on cash flow hedges

 

 

14

 

 

 

805

 

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

 

 

(166

)

 

 

370

 

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

 

 

 

 

 

337

 

 

 

516

 

 

 

798

 

Income Tax Benefit

 

 

 

 

 

 

 

 

516

 

 

 

798

 

Comprehensive Loss Attributable to SEACOR Marine Holdings Inc.

 

$

(9,073

)

 

$

(14,039

)

 

 

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 STATEMENTS OF CHANGES IN EQUITY

(in thousands, except share data)

 

 

 

Shares of
Common
Stock
Outstanding

 

 

Common
Stock

 

 

Additional
Paid-In
Capital

 

 

Shares
Held in
Treasury

 

 

Treasury
Stock

 

 

Accumulated Deficit

 

 

Accumulated
Other
Comprehensive
Income

 

 

Non-
Controlling
Interests In
Subsidiaries

 

 

Total
Equity

 

For the Three Months Ended March 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2022

 

 

26,702,161

 

 

$

272

 

 

$

466,669

 

 

 

248,638

 

 

$

(1,852

)

 

$

(93,111

)

 

$

6,847

 

 

$

321

 

 

$

379,146

 

Restricted stock grants

 

 

520,396

 

 

 

6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6

 

Amortization of share awards

 

 

 

 

 

 

 

 

1,221

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,221

 

Exercise of options

 

 

834

 

 

 

 

 

 

6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6

 

Exercise of warrants

 

 

117,394

 

 

 

1

 

 

 

 

 

 

121

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

 

 

 

Restricted stock vesting

 

 

(220,207

)

 

 

 

 

 

 

 

 

220,207

 

 

 

(2,266

)

 

 

 

 

 

 

 

 

 

 

 

(2,266

)

Forfeiture of employee share awards

 

 

(15,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(9,589

)

 

 

 

 

 

 

 

 

(9,589

)

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

516

 

 

 

 

 

 

516

 

March 31, 2023

 

 

27,105,578

 

 

$

279

 

 

$

467,896

 

 

 

468,966

 

 

$

(4,119

)

 

$

(102,700

)

 

$

7,363

 

 

$

321

 

 

$

369,040

 

 

 

 

Shares of
Common
Stock
Outstanding

 

 

Common
Stock

 

 

Additional
Paid-In
Capital

 

 

Shares
Held in
Treasury

 

 

Treasury
Stock

 

 

Accumulated Deficit

 

 

Accumulated
Other
Comprehensive
Income

 

 

Non-
Controlling
Interests In
Subsidiaries

 

 

Total
Equity

 

For the Three Months Ended March 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2021

 

 

25,992,237

 

 

$

262

 

 

$

461,931

 

 

 

127,887

 

 

$

(1,120

)

 

$

(22,907

)

 

$

8,055

 

 

$

320

 

 

$

446,541

 

Restricted stock grants

 

 

733,895

 

 

 

7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7

 

Amortization of share awards

 

 

 

 

 

 

 

 

1,067

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,067

 

Exercise of options

 

 

31,992

 

 

 

 

 

 

140

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

140

 

Restricted stock vesting

 

 

(114,251

)

 

 

 

 

 

 

 

 

114,251

 

 

 

(672

)

 

 

 

 

 

 

 

 

 

 

 

(672

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(14,837

)

 

 

 

 

 

 

 

 

(14,837

)

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

798

 

 

 

 

 

 

798

 

March 31, 2022

 

 

26,643,873

 

 

$

269

 

 

$

463,138

 

 

 

242,138

 

 

$

(1,792

)

 

$

(37,744

)

 

$

8,853

 

 

$

320

 

 

$

433,044

 

 

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

 

4


SEACOR MARINE HOLDINGS INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

 

 

Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

Net Loss

 

$

(9,589

)

 

$

(14,837

)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

13,762

 

 

 

14,371

 

Deferred financing costs amortization

 

 

418

 

 

 

291

 

Stock-based compensation expense

 

 

1,227

 

 

 

1,074

 

Debt discount amortization

 

 

1,558

 

 

 

1,691

 

Allowance for credit losses

 

 

(104

)

 

 

(170

)

Gain from equipment sales, retirements or impairments

 

 

(3,599

)

 

 

(2,139

)

Derivative losses

 

 

 

 

 

34

 

Interest on finance leases

 

 

72

 

 

 

25

 

Settlements on derivative transactions, net

 

 

154

 

 

 

(373

)

Currency losses (gains)

 

 

825

 

 

 

(821

)

Deferred income taxes

 

 

(1,659

)

 

 

(3,529

)

Equity earnings

 

 

(536

)

 

 

(5,674

)

Dividends received from equity investees

 

 

 

 

 

725

 

Changes in Operating Assets and Liabilities:

 

 

 

 

 

 

Accounts receivables

 

 

(9,857

)

 

 

3,904

 

Other assets

 

 

45

 

 

 

(164

)

Accounts payable and accrued liabilities

 

 

6,731

 

 

 

6,707

 

Net cash (used in) provided by operating activities

 

 

(552

)

 

 

1,115

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(470

)

 

 

(20

)

Proceeds from disposition of property and equipment

 

 

7,611

 

 

 

5,310

 

Principal payments on notes due from equity investees

 

 

 

 

 

176

 

Principal payments on notes due from others

 

 

5,000

 

 

 

 

Net cash provided by investing activities

 

 

12,141

 

 

 

5,466

 

Cash Flows from Financing Activities:

 

 

 

 

 

 

Payments on long-term debt

 

 

(8,608

)

 

 

(7,348

)

Payments on finance leases

 

 

(114

)

 

 

(9

)

Proceeds from exercise of stock options

 

 

6

 

 

 

140

 

Tax withholdings on restricted stock vesting

 

 

(2,266

)

 

 

(672

)

Net cash used in financing activities

 

 

(10,982

)

 

 

(7,889

)

Effects of Exchange Rate Changes on Cash and Cash Equivalents

 

 

 

 

 

(1

)

Net Change in Cash, Restricted Cash and Cash Equivalents

 

 

607

 

 

 

(1,309

)

Cash, Restricted Cash and Cash Equivalents, Beginning of Period

 

 

43,045

 

 

 

41,220

 

Cash, Restricted Cash and Cash Equivalents, End of Period

 

$

43,652

 

 

$

39,911

 

Supplemental disclosures:

 

 

 

 

 

 

Cash paid for interest, excluding capitalized interest

 

$

5,955

 

 

$

3,099

 

Income taxes paid, net

 

 

446

 

 

 

 

Noncash Investing and Financing Activities:

 

 

 

 

 

 

Increase in capital expenditures in accounts payable and accrued liabilities

 

 

51

 

 

 

 

Recognition of a new right-of-use asset - operating leases

 

 

196

 

 

 

163

 

Recognition of a new right-of-use asset - financing leases

 

 

 

 

 

7,248

 

 

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

 

5


SEACOR MARINE HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1.
BASIS OF PRESENTATION AND ACCOUNTING POLICIES

The condensed consolidated financial statements include the accounts of SEACOR Marine Holdings Inc. and its consolidated subsidiaries (the “Company”). In the opinion of management, all adjustments (consisting of normal recurring adjustments) have been made to fairly present the unaudited condensed consolidated financial statements for the periods indicated. Results of operations for the interim periods presented are not necessarily indicative of operating results for the full year or any future periods.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the Company’s financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Annual Report”).

Unless the context otherwise indicates, any reference in this Quarterly Report on Form 10-Q to the “Company” refers to SEACOR Marine Holdings Inc. and its consolidated subsidiaries, and any reference in this Quarterly Report on Form 10-Q to “SEACOR Marine” refers to SEACOR Marine Holdings Inc. without its consolidated subsidiaries.

Recently Adopted Accounting Standards.

On October 29, 2020, the FASB issued ASU 2020-10, Codification Improvements: Amendments that improve the consistency of the Codification by including all disclosure guidance in the appropriate disclosure section. The guidance was effective for annual periods beginning after December 15, 2020, and interim periods within the annual periods beginning after December 15, 2022. The adoption of the standard did not have a material effect on the disclosures included herein.

On August 5, 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021. The Company adopted the new standard on January 1, 2022. The adoption of the standard by the Company did not have a material impact on its consolidated financial position or on its results of operations, cash flows and disclosures.

Critical Accounting Policies.

Basis of Consolidation. The consolidated financial statements include the accounts of SEACOR Marine and its controlled subsidiaries. Control is generally deemed to exist if the Company has greater than 50% of the voting rights of a subsidiary. All significant intercompany accounts and transactions are eliminated in the combination and consolidation.

Noncontrolling interests in consolidated subsidiaries are included in the consolidated balance sheets as a separate component of equity. The Company reports consolidated net income (loss) inclusive of both the Company’s and the noncontrolling interests’ share, as well as the amounts of consolidated net income (loss) attributable to each of the Company and the noncontrolling interests. If a subsidiary is deconsolidated upon a change in control, any retained noncontrolling equity investment in the former controlled subsidiary is measured at fair value and a gain or loss is recognized in net income (loss) based on such fair value. If a subsidiary is consolidated upon the business acquisition of controlling interests by the Company, any previous noncontrolled

 

6


equity investment in the subsidiary is measured at fair value and a gain or loss is recognized in net income (loss) based on such fair value.

The Company employs the equity method of accounting for investments in 50% or less owned companies that it does not control but has the ability to exercise significant influence over the operating and financial policies of the business venture. Significant influence is generally deemed to exist if the Company has between 20% and 50% of the voting rights of a business venture but may exist when the Company’s ownership percentage is less than 20%. In certain circumstances, the Company may have an economic interest in excess of 50% but may not control and consolidate the business venture. Conversely, the Company may have an economic interest less than 50% but may control and consolidate the business venture. The Company reports its investments in and advances to these business ventures in the accompanying consolidated balance sheets as investments, at equity, and advances to 50% or less owned companies. The Company reports its share of earnings from investments in 50% or less owned companies in the accompanying consolidated statements of income (loss) as equity in earnings of 50% or less owned companies, net of tax.

Certain reclassifications were made to previously reported amounts in the consolidated financial statements and notes thereto to make them consistent with the current period presentation.

Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“U.S.”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates include those related to deferred revenues, allowance for credit loss accounts, useful lives of property and equipment, impairments, income tax provisions and certain accrued liabilities. Actual results could differ from estimates and those differences may be material.

Revenue Recognition. Revenue is recognized when (or as) the Company transfers promised goods or services to its customers in amounts that reflect the consideration to which the Company expects to be entitled to in exchange for those goods or services, which occurs when (or as) the Company satisfies its contractual obligations and transfers over control of the promised goods or services to its customers. The Company recognizes revenue, net of sales taxes, based on its estimates of the consideration the Company expects to receive. Costs to obtain or fulfill a contract are expensed as incurred.

The Company earns revenue primarily from the time charter and bareboat charter of vessels to customers. Since the Company charges customers based upon daily rates of hire, vessel revenues are recognized on a daily basis throughout the contract period. Under a time charter, the Company provides a vessel to a customer and is responsible for all operating expenses, typically excluding fuel. Under a bareboat charter, the Company provides a vessel to a customer and the customer assumes responsibility for all operating expenses and assumes all risks of operation. In the U.S. Gulf of Mexico, time charter durations and rates are typically established in the context of master service agreements that govern the terms and conditions of the charter.

In the Company’s operating areas, contract or charters vary in length from several days to multi-year periods. Many of the Company’s contracts and charters include cancellation clauses without early termination penalties. As a result of options and frequent renewals, the stated duration of charters may not correlate with the length of time the vessel is contracted for to provide services to a particular customer.

The Company contracts with various customers to carry out management services for vessels as agents for and on behalf of ship owners. These services include crew management, technical management, commercial management, insurance arrangements, sale and purchase of vessels, provisions and bunkering. As the manager of the vessels, the Company undertakes to use its best endeavors to provide the agreed management services as agents for and on behalf of the owners in accordance with sound ship management practice and to protect and promote the interest of the owners in all matters relating to the provision of services thereunder. The Company also contracts with various customers to carry out management services regarding engineering for vessel construction and vessel conversions. The vast majority of the ship management agreements span one to three

 

7


years and are typically billed on a monthly basis. The Company transfers control of the service to the customer and satisfies its performance obligation over the term of the contract, and therefore recognizes revenue over the term of the contract while related costs are expensed as incurred.

Revenue that does not meet these criteria is deferred until the criteria is met and is considered a contract liability and is recognized as such. Contract liabilities, which are included in deferred revenue and unearned revenue in the accompanying consolidated balance sheets, as of March 31, 2023 and December 31, 2022 were as follows (in thousands):

 

 

2023

 

 

2022

 

Balance at beginning of period

 

$

2,333

 

 

$

1,606

 

Revenues deferred during the period

 

 

740

 

 

 

4,288

 

Revenues recognized and reclassifications during the period

 

 

(1,586

)

 

 

(3,561

)

Balance at end of period

 

$

1,487

 

 

$

2,333

 

As of March 31, 2023, the Company had $1.5 million of unearned revenue primarily related to mobilization of vessels and had no deferred revenues.

Cash and Cash Equivalents. The Company considers all highly liquid investments, with an original maturity of three months or less from the date purchased, to be cash equivalents.

Restricted Cash. Restricted cash primarily relates to banking facility requirements.

Trade and Other Receivables. Customers are primarily major integrated national, international oil companies, large independent oil and natural gas exploration and production companies and established wind farm construction companies. Customers are granted credit on a short-term basis and the related credit risks are minimal. Other receivables consist primarily of operating expenses the Company incurs in relation to vessels it manages for other entities, as well as insurance and income tax receivables, but excludes our short-term note receivable. During the three months ended March 31, 2023, the Company recorded $2.2 million of insurance receivables that offset operating expenses. These insurance receivables related to costs that were recorded as operating expenses in 2022 and were previously disclosed as a gain contingency.

The Company routinely reviews its receivables and makes provisions for the credit losses utilizing the Current Expected Credit Losses model (“CECL”). The CECL model utilizes a lifetime expected credit loss measurement objective for the recognition of credit losses for loans and other receivables at the time the financial asset is originated or acquired. However, those provisions are estimates and actual results may materially differ from those estimates. Trade receivables are deemed uncollectible and are removed from accounts receivable and the allowance for credit losses when collection efforts have been exhausted.

Property and Equipment. Equipment, stated at cost, is depreciated using the straight-line method over the estimated useful life of the asset to an estimated salvage value. With respect to each class of asset, the estimated useful life is based upon a newly built asset being placed into service and represents the time period beyond which it is typically not justifiable for the Company to continue to operate the asset in the same or similar manner. From time to time, the Company may acquire older vessels that have already exceeded the Company’s useful life policy, in which case the Company depreciates such assets based on its best estimate of remaining useful life, typically the next survey or certification date. As of March 31, 2023, the estimated useful life of the Company’s new offshore support vessels was 20 years.

Equipment maintenance and repair costs and the costs of routine overhauls, drydockings and inspections performed on vessels and equipment are charged to operating expense as incurred. Expenditures that extend the useful life or improve the marketing and commercial characteristics of equipment as well as major renewals and improvements to other properties are capitalized.

 

8


Certain interest costs incurred during the construction of equipment are capitalized as part of the assets’ carrying values and are amortized over such assets’ estimated useful lives. There was no capitalized interest recognized during the three months ended March 31, 2023 and 2022.

Impairment of Long-Lived Assets. The Company performs an impairment analysis of long-lived assets used in operations when indicators of impairment are present. These indicators may include a significant decrease in the market price of a long-lived asset or asset group, a significant adverse change in the extent or manner in which a long-lived asset or asset group is being used or in its physical condition, or a current period operating or cash flow loss combined with a history of operating or cash flow losses or a forecast that demonstrates continuing losses associated with the use of a long-lived asset or asset group. If the carrying values of the assets are not recoverable, as determined by their estimated future undiscounted cash flows, the estimated fair value of the assets or asset groups are compared to their current carrying values and impairment charges are recorded if the carrying value exceeds fair value.

For the three months ended March 31, 2023, the Company did not record an impairment on any owned or leased-in vessels. For the three months ended March 31, 2022, the Company recorded impairment charges of $0.9 million for one fast support vessel (“FSV”) classified as held for sale during the first quarter of 2022 and sold during the second quarter of 2022. Estimated fair values for the Company owned vessels were established by independent appraisers based on researched market information, replacement cost information and other data.

For vessel classes and individual vessels with indicators of impairment as of March 31, 2023, the Company estimated that their future undiscounted cash flows exceeded their current carrying values. However, the Company’s estimates of future undiscounted cash flows are highly subjective as utilization and rates per day worked are uncertain, especially in light of the continued volatility in commodity prices as well as the timing and cost of reactivating cold-stacked vessels. If market conditions decline, changes in the Company’s expectations on future cash flows may result in recognizing additional impairment charges related to its long-lived assets in future periods. For any vessel or vessel class that has indicators of impairment and is deemed not recoverable through future operations, the Company determines the fair value of the vessel or vessel class. If the fair value determination is less than the carrying value of the vessel or vessel class, an impairment is recognized to reduce the carrying value to fair value. Fair value determination is primarily accomplished by obtaining independent valuations of vessel or vessel classes from qualified third-party appraisers.

Impairment of 50% or Less Owned Companies. Investments in 50% or less owned companies are reviewed periodically to assess whether there is an other-than-temporary decline in the carrying value of the investment. In its evaluation, the Company considers, among other items, recent and expected financial performance and returns, impairments recorded by the investee and the capital structure of the investee. When the Company determines the estimated fair value of an investment is below carrying value and the decline is other-than-temporary, the investment is written down to its estimated fair value. Actual results may vary from the Company’s estimates due to the uncertainty regarding projected financial performance, the severity and expected duration of declines in value and the available liquidity in the capital markets to support the continuing operations of the investee, among other factors. Although the Company believes its assumptions and estimates are reasonable, the investee’s actual performance compared with the estimates could produce different results and lead to additional impairment charges in future periods. During the three months ended March 31, 2023 and 2022, the Company did not recognize any impairment charges related to its 50% or less owned companies.

Income Taxes. During the three months ended March 31, 2023, the Company’s effective income tax rate of 12.89% was primarily due to foreign taxes paid that are not creditable against U.S. income taxes and foreign losses for which there is no benefit in the U.S.

 

9


Accumulated Other Comprehensive Income (Loss). The components of accumulated other comprehensive income were as follows (in thousands):

 

 

SEACOR Marine Holdings Inc.
Stockholders’ Equity

 

 

 

Foreign
Currency
Translation
Adjustments

 

 

Derivative
Gains (Losses) on
Cash Flow
Hedges, net

 

 

Total Other
Comprehensive
Income

 

December 31, 2022

 

$

6,332

 

 

$

515

 

 

$

6,847

 

Other comprehensive (loss) income

 

 

668

 

 

 

(152

)

 

 

516

 

Balance as of March 31, 2023

 

$

7,000

 

 

$

363

 

 

$

7,363

 

Earnings (Loss) Per Share. Basic earnings/loss per share of Common Stock of the Company is computed based on the weighted average number of shares of Common Stock and warrants to purchase Common Stock at an exercise price of $0.01 per share (“Warrants”) issued and outstanding during the relevant periods. The Warrants are included in the basic earnings/loss per share of Common Stock because the shares issuable upon exercise of the Warrants are issuable for de minimis cash consideration and therefore not anti-dilutive. Diluted earnings/loss per share of Common Stock is computed based on the weighted average number of shares of Common Stock and Warrants issued and outstanding plus the effect of other potentially dilutive securities through the application of the treasury stock method and the if-converted method that assumes all shares of Common Stock have been issued and outstanding during the relevant periods pursuant to the conversion of the Old Convertible Notes and the New Convertible Notes unless anti-dilutive.

For the three months ended March 31, 2023, diluted loss per share of Common Stock excluded 2,978,274 shares of Common Stock issuable upon conversion of the New Convertible Notes as the effect of their inclusion in the computation would be anti-dilutive.

For the three months ended March 31, 2022, diluted loss per share of Common Stock excluded 2,907,500 shares of Common Stock issuable upon conversion of the Old Convertible Notes as the effect of their inclusion in the computation would be anti-dilutive.

In addition, for the three months ended March 31, 2023 and 2022 diluted loss per share of Common Stock excluded 1,672,932 and 1,469,647 shares of restricted stock, respectively, and 1,026,031 and 1,029,365 shares of Common Stock, respectively, issuable upon exercise of outstanding stock options as the effect of their inclusion in the computation would be anti-dilutive.

2.
NOTE RECEIVABLE

In connection with the closing of the framework agreement transactions (the “Framework Agreement Transactions”), on September 29, 2022, SEACOR Marine Capital Inc., a wholly-owned subsidiary of SEACOR Marine (“SEACOR Marine Capital”) purchased all of the outstanding loans under the MexMar Original Facility Agreement for an aggregate amount of $28.8 million, representing par value of the loan using proceeds received from the Framework Agreement Transactions. On the same date, the MexMar Original Facility Agreement was amended and restated in the MexMar Third A&R Facility Agreement pursuant to which, among other things, Mantenimiento Express Marítimo, S.A.P.I. de C.V. (“MexMar”) repaid approximately $8.8 million of the outstanding loan amount and agreed to repay the $20.0 million of the loan that remained outstanding by September 30, 2023 through four quarterly installments of $5.0 million. As of March 31, 2023, the loan balance due from MexMar was $10.0 million.

3.
EQUIPMENT ACQUISITIONS AND DISPOSITIONS

During the three months ended March 31, 2023, capital expenditures were $0.5 million and there were no equipment deliveries. During the three months ended March 31, 2023, the Company sold three liftboats and other equipment, previously classified as held for sale, as well as other equipment not previously classified as such, for

 

10


net cash proceeds of $7.6 million, after transaction costs, and a gain of $2.6 million. During the three months ended March 31, 2022, the Company sold one liftboat, previously removed from service, and office space for net cash proceeds of $5.3 million, after transaction costs, and a gain of $3.1 million.

4.
INVESTMENTS, AT EQUITY AND ADVANCES TO 50% OR LESS OWNED COMPANIES

Investments, at equity, and advances to 50% or less owned companies as of March 31, 2023 and December 31, 2022 were as follows (in thousands):

 

 

Ownership

 

 

2023

 

 

2022

 

Seabulk Angola

 

 

49.0

%

 

 

2,017

 

 

 

1,683

 

SEACOR Arabia

 

 

45.0

%

 

 

1,501

 

 

 

1,265

 

Other

 

20.0% - 50.0%

 

 

 

76

 

 

 

76

 

 

 

 

 

 

$

3,594

 

 

$

3,024

 

 

5.
LONG-TERM DEBT

The Company’s long-term debt obligations as of March 31, 2023 and December 31, 2022 were as follows (in thousands):

 

 

March 31, 2023

 

 

December 31, 2022

 

Recourse long-term debt(1):

 

 

 

 

 

 

Guaranteed Notes

 

$

90,000

 

 

$

90,000

 

New Convertible Notes

 

 

35,000

 

 

 

35,000

 

SEACOR Marine Foreign Holdings Credit Facility

 

 

64,507

 

 

 

67,910

 

Sea-Cat Crewzer III Term Loan Facility

 

 

15,465

 

 

 

16,703

 

SEACOR Offshore Delta (f/k/a SEACOSCO) Acquisition Debt

 

 

16,205

 

 

 

16,205

 

SEACOR Delta (f/k/a SEACOSCO) Shipyard Financing

 

 

75,314

 

 

 

77,537

 

SEACOR Alpine Shipyard Financing

 

 

27,087

 

 

 

27,790

 

SEACOR 88/888 Term Loan

 

 

5,500

 

 

 

5,500

 

Tarahumara Shipyard Financing

 

 

5,056

 

 

 

5,597

 

SEACOR Offshore OSV

 

 

15,552

 

 

 

16,052

 

Total recourse long-term debt

 

 

349,686

 

 

 

358,294

 

Non-recourse long-term debt(2):

 

 

 

 

 

 

SEACOR 88/888 Term Loan

 

 

5,500

 

 

 

5,500

 

Total non-recourse long-term debt

 

 

5,500

 

 

 

5,500

 

Total principal due for long-term debt

 

 

355,186

 

 

 

363,794

 

Current portion due within one year

 

 

(60,523

)

 

 

(61,512

)

Unamortized debt discount

 

 

(35,950

)

 

 

(37,511

)

Deferred financing costs

 

 

(4,263

)

 

 

(4,652

)

Long-term debt, less current portion

 

$

254,450

 

 

$

260,119

 

 

(1)
Recourse debt represents debt issued by SEACOR Marine and/or its subsidiaries and guaranteed by SEACOR Marine or one of its operating subsidiaries as provided in the relevant debt agreements.
(2)
Non-recourse debt represents debt issued by one of the Company’s consolidated subsidiaries with no recourse to SEACOR Marine or its other non-debtor operating subsidiaries with respect to the applicable instrument, other than certain limited support obligations as provided in the respective debt agreements, which in aggregate are not considered to be material to the Company’s business and financial condition.

As of March 31, 2023, the Company was in compliance with all debt covenants and lender requirements.

SEACOR Marine Foreign Holdings Credit Facility. On March 2, 2023, the Company and SEACOR Marine Foreign Holdings Inc., a wholly-owned subsidiary of SEACOR Marine (“SMFH”) entered into Amendment No. 7 (“SMFH Amendment No. 7”) to that certain Second Amended and Restated Guaranty, dated as of September 29, 2022, issued by the Company in favor of DNB Bank ASA, New York Branch, as security trustee (the “Second A&R SMFH Credit Facility Guaranty”) in connection with that certain senior secured loan facility with a syndicate of lenders administered by DNB Bank ASA, New York Branch, dated as of September 26, 2018 and as amended from time to time (the “SMFH Credit Facility”). SMFH Amendment No. 7 extends the date through which the Company is required to maintain an interest coverage ratio of 1.50:1.00 (as calculated in accordance with the Second A&R SMFH Credit Facility Guaranty) from December 31, 2022 to June 30, 2023. As of the last day of each fiscal quarter thereafter, the interest coverage ratio is required to be at least 2.00:1.00.

 

11


Letters of Credit. As of March 31, 2023, the Company had outstanding letters of credit of $1.1 million securing lease obligations, labor and performance guaranties.

6.
LEASES

As of March 31, 2023, the Company leased-in one anchor handling towing supply vessel (“AHTS”), one FSV, and certain facilities and other equipment. The leases typically contain purchase and renewal options or rights of first refusal with respect to the sale or lease of the equipment. As of March 31, 2023, the remaining lease terms of the vessels had a duration ranging from 18 to 48 months. The lease terms of certain facilities and other equipment had a duration ranging from three to 285 months.

As of March 31, 2023, future minimum payments for leases for the remainder of 2023 and the years ended December 31, noted below, were as follows (in thousands):

 

 

Operating Leases

 

 

Finance Leases

 

Remainder of 2023

 

$

1,597

 

 

$

612

 

2024

 

 

1,721

 

 

 

946

 

2025

 

 

645

 

 

 

959

 

2026

 

 

459

 

 

 

953

 

2027

 

 

400

 

 

 

4,659

 

Years subsequent to 2027

 

 

3,214

 

 

 

 

 

 

8,036

 

 

 

8,129

 

Interest component

 

 

(1,798

)

 

 

(922

)

 

 

6,238

 

 

 

7,207

 

Current portion of long-term lease liabilities

 

 

1,764

 

 

 

563

 

Long-term lease liabilities

 

$

4,474

 

 

$

6,644

 

For the three months ended March 31, 2023 and 2022 the components of lease expense were as follows (in thousands):

 

 

Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Operating lease cost

 

$

546

 

 

$

908

 

Finance lease cost:

 

 

 

 

 

 

Amortization of finance lease assets (1)

 

 

160

 

 

 

59

 

Interest on finance lease liabilities (2)

 

 

72

 

 

 

25

 

Short-term lease costs

 

 

174

 

 

 

152

 

 

$

952

 

 

$

1,144

 

 

(1)
Included in amortization costs in the consolidated statements of income (loss).
(2)
Included in interest expense in the consolidated statements of income (loss).

For the three months ended March 31, 2023 supplemental cash flow information related to leases was as follows (in thousands):

 

 

2023

 

Operating cash outflows from operating leases

 

$

641

 

Financing cash outflows from finance leases

 

 

114

 

Right-of-use assets obtained for operating lease liabilities

 

 

196

 

Right-of-use assets obtained for finance lease liabilities

 

 

 

For the three months ended March 31, 2023 other information related to leases was as follows:

 

 

2023

 

Weighted average remaining lease term, in years - operating leases

 

 

9.8

 

Weighted average remaining lease term, in years - finance leases

 

 

4.0

 

Weighted average discount rate - operating leases

 

 

6.8

%

Weighted average discount rate - finance leases

 

 

4.0

%

 

 

12


7.
INCOME TAXES

The following table reconciles the difference between the statutory federal income tax rate for the Company and the effective income tax rate for the three months ended March 31, 2023:

Statutory rate

 

 

(21.00

)%

Exclusion of foreign subsidiaries with current year losses and withholding tax

 

 

31.80

%

Other

 

 

2.09

%

Effective income tax rate

 

 

12.89

%

 

8.
DERIVATIVE INSTRUMENTS AND HEDGING STRATEGIES

Derivative instruments are classified as either assets, which are included in other receivables in the accompanying consolidated balance sheets, or liabilities based on their individual fair values. The fair values of the Company’s derivative instruments were as follows (in thousands):

 

 

March 31, 2023

 

 

December 31, 2022

 

 

 

Derivative
Asset

 

 

Derivative
Liability

 

 

Derivative
Asset

 

 

Derivative
Liability

 

Derivatives designated as hedging instruments:

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swap agreements (cash flow hedges)

 

$

387

 

 

$

 

 

$

526

 

 

$

 

Economic Hedges. The Company enters and settles forward currency exchange, option and future contracts with respect to various foreign currencies. These contracts enable the Company to buy currencies in the future at fixed exchange rates, which could offset possible consequences of changes in currency exchange rates with respect to the Company’s business conducted outside of the U.S. The Company generally does not enter into contracts with forward settlement dates beyond 12 to 18 months. As of March 31, 2023, the Company had no open forward currency exchange contracts.

Cash Flow Hedges. The Company has interest rate swap agreements designated as cash flow hedges. By entering into these interest rate swap agreements, the Company has converted the variable LIBOR component of certain of their outstanding borrowings to a fixed interest rate. The Company recognized losses on derivative instruments designated as cash flow hedges of $0.2 million for the three months ended March 31, 2023 and gains of $1.2 million for the three months ended March 31, 2022, respectively, as a component of other comprehensive income (loss). As of March 31, 2023, the interest rate swaps held by the Company were as follows:

SMFH has an interest rate swap agreement maturing in 2023 that calls for SMFH to pay a fixed rate of interest of 3.32% per annum on the amortized notional value of $5.6 million and receive a variable interest rate based on LIBOR on the amortized notional value;
SMFH has an interest rate swap agreement maturing in 2023 that calls for SMFH to pay a fixed rate of interest of 3.195% per annum on the amortized notional value of $30.5 million and receive a variable interest rate based on LIBOR on the amortized notional value; and
SEACOR 88 LLC and SEACOR 888 LLC, both indirect wholly-owned subsidiaries of SEACOR Marine (collectively, “SEACOR 88/888”), have an interest rate swap agreement maturing in 2023 that calls for SEACOR 88/888 to pay a fixed rate of interest of 3.175% per annum on the amortized notional value of $5.5 million and receive a variable interest rate based on LIBOR on the amortized notional value.

 

13


Other Derivative Instruments. The Company had no derivative instruments not designated as hedging instruments for the three months ended March 31, 2023 and recognized losses on derivative instruments not designated as hedging instruments for the three months ended March 31, 2022 as follows (in thousands):

 

 

Three Months Ended March 31,

 

 

 

 

2023

 

 

2022

 

 

Conversion option liability on Old Convertible Notes

 

$

 

 

$

(34

)

 

The conversion option liability related to the bifurcated embedded conversion option in the Old Convertible Notes, issued to investment funds managed and controlled by The Carlyle Group, were exchanged for the New Convertible Notes during the fourth quarter of 2022.

9.
FAIR VALUE MEASUREMENTS

The fair value of an asset or liability is the price that would be received to sell an asset or transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company utilizes a fair value hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value and defines three levels of inputs that may be used to measure fair value. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs are observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, or inputs derived from observable market data. Level 3 inputs are unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities.

The Company’s financial assets and liabilities as of March 31, 2023 and December 31, 2022 that are measured at fair value on a recurring basis were as follows (in thousands):

March 31, 2023

 

Level 1

 

 

Level 2

 

 

Level 3

 

ASSETS

 

 

 

 

 

 

 

 

 

Derivative instruments

 

$

 

 

$

387

 

 

$

 

December 31, 2022

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

Derivative instruments

 

$

 

 

$

526

 

 

$

 

The estimated fair values of the Company’s other financial assets and liabilities as of March 31, 2023 and December 31, 2022 were as follows (in thousands):

 

 

 

 

 

Estimated Fair Value

 

March 31, 2023

 

Carrying
Amount

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Cash, cash equivalents and restricted cash

 

$

43,652

 

 

$

43,652

 

 

$

 

 

$

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

Long-term debt, including current portion

 

 

314,973

 

 

 

 

 

 

310,090

 

 

 

 

December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Cash, cash equivalents and restricted cash

 

$

43,045

 

 

$

43,045

 

 

$

 

 

$

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

Long-term debt, including current portion

 

 

321,631

 

 

 

 

 

 

314,979

 

 

 

 

The carrying value of cash, cash equivalents and restricted cash approximates fair value. The fair value of the Company’s long-term debt was estimated based upon quoted market prices or by using discounted cash flow analysis based on estimated current rates for similar types of arrangements. Considerable judgment was required in developing certain of the estimates of fair value, and, accordingly, the estimates presented herein are not necessarily indicative of the amounts that the Company could realize in a current market exchange.

 

14


Property and equipment. During the three months ended March 31, 2023, the Company recognized no impairment charges. During the year ended December 31, 2022, the Company recognized impairment charges totaling $2.9 million. The Company recorded impairment charges of $0.9 million for one FSV classified as held for sale and sold during 2022. In addition, the Company recorded impairment charges of $0.7 million for one leased-in AHTS as it is not expected to return to active service during its remaining lease term. Additionally, the Company recorded impairment charges of $1.3 million for other equipment and classified such equipment as assets held for sale, which was subsequently sold in the first quarter of 2023.

10.
WARRANTS

In connection with various transactions, the Company issued 2,560,456 warrants to purchase shares of Common Stock at an exercise price of $0.01 per share (“Warrants”). On January 17, 2023, 117,515 Warrants were exercised, resulting in 1,321,968 Warrants outstanding as of March 31, 2023, which are comprised entirely of the remaining Carlyle Warrants. In connection with the exercise of Warrants on January 17, 2023, 121 shares of Common Stock were withheld as payment for the exercise price of the exercised Warrants.

11.
COMMITMENTS AND CONTINGENCIES

As of March 31, 2023, the Company had unfunded capital commitments of $1.7 million for miscellaneous vessel equipment payable during the remainder of 2023. The Company has indefinitely deferred an additional $9.3 million of orders with respect to one FSV that the Company had previously reported as unfunded capital commitments.

In December 2015, the Brazilian Federal Revenue Office issued a tax-deficiency notice to Seabulk Offshore do Brasil Ltda, an indirect wholly-owned subsidiary of SEACOR Marine (“Seabulk Offshore do Brasil”), with respect to certain profit participation contributions (also known as “PIS”) and social security financing contributions (also known as “COFINS”) requirements alleged to be due from Seabulk Offshore do Brasil (“Deficiency Notice”) in respect of the period of January 2011 until December 2012. In January 2016, the Company administratively appealed the Deficiency Notice on the basis that, among other arguments, (i) such contributions were not applicable in the circumstances of a 70%/30% cost allocation structure, and (ii) the tax inspector had incorrectly determined that values received from outside of Brazil could not be classified as expense refunds. The initial appeal was dismissed by the Brazilian Federal Revenue Office and the Company appealed such dismissal and is currently awaiting an administrative trial. A local Brazilian law has been enacted that supports the Company’s position that such contribution requirements are not applicable, but it is uncertain whether such law will be taken into consideration with respect to administrative proceedings commenced prior to the enactment of the law. Accordingly, the success of Seabulk Offshore do Brasil in the administrative proceedings cannot be assured and the matter may need to be addressed through judicial court proceedings. The potential levy arising from the Deficiency Notice is R$21.3 million based on a historical potential levy of R$12.87 million (USD $4.2 million and USD $2.5 million, respectively, based on the exchange rate as of March 31, 2023).

On April 13, 2021, the SEACOR Power, a liftboat owned by a subsidiary of the Company with nineteen individuals on board, capsized off the coast of Port Fourchon, Louisiana. The incident resulted in the death of several crew members, including the captain of the vessel and five other employees of the Company. The incident also resulted in the constructive total loss of the SEACOR Power. The Company is responsible for the salvage operations related to the vessel in coordination with the U.S. Coast Guard (“USCG”). The salvage operations are substantially complete and the Company expects salvage costs to be covered by insurance proceeds.

The capsizing of the SEACOR Power garnered significant attention from the media as well as local, state and federal stakeholders. The National Transportation Safety Board (“NTSB”) and the USCG have each conducted an investigation to determine the cause of the incident. The Company has and will continue to fully cooperate with the investigations in all respects. On November 3, 2022, the NTSB publicly released its final report, as adopted on October 18, 2022, which determined that the probable cause of the capsizing of the SEACOR Power was a loss of stability that occurred when the vessel was struck by severe thunderstorm winds, which

 

15


exceeded the vessel’s operation wind speed limits. The NTSB further determined that contributing to the loss of life on the vessel were the speed at which the vessel capsized and the angle at which it came to rest, which made egress difficult, and the high winds and seas in the aftermath of the capsizing, which hampered rescue efforts. The USCG is also expected to release a report on its investigation although the timing of such release is uncertain.

Numerous civil lawsuits have been filed against the Company and other third parties by the family members of deceased crew members and the surviving crew members employed by the Company or by third parties. On June 2, 2021, the Company filed a Limitation of Liability Act complaint in federal court in the Eastern District of Louisiana (“Limitation Action”), which had the effect of enjoining all existing civil lawsuits and requiring the plaintiffs to file their claims relating to the capsizing of the SEACOR Power in the Limitation Action. Nearly all injury and death claims in the Limitation Action for which the Company has financial exposure have been resolved, and the remaining claims are those for which the Company is owed contractual defense and indemnity or will be covered by insurance. There is significant uncertainty regarding the impact the incident will have on the Company’s reputation and the resulting possible impact on the Company’s business.

In the normal course of its business, the Company becomes involved in various other litigation matters including, among others, claims by third parties for alleged property damages and personal injuries. Management has used estimates in determining the Company’s potential exposure to these matters and has recorded reserves in its financial statements related thereto where appropriate. It is possible that a change in the Company’s estimates of that exposure could occur, but the Company does not expect that such changes in estimated costs would have a material effect on the Company’s consolidated financial position, results of operations or cash flows.

Certain of the Company’s subsidiaries are participating employers in two industry-wide, multi-employer, defined benefit pension funds in the United Kingdom: the U.K Merchant Navy Officers Pension Fund (“MNOPF”) and the U.K. Merchant Navy Ratings Pension Fund (“MNRPF”). The Company’s participation in the MNOPF began with the acquisition of the Stirling group of companies (the “Stirling Group”) in 2001 and relates to certain officers employed between 1978 and 2002 by the Stirling Group and/or its predecessors. The Company’s participation in the MNRPF also began with the acquisition of the Stirling Group in 2001 and relates to ratings employed by the Stirling Group and/or its predecessors through today. Both of these plans are in deficit positions and, depending upon the results of future actuarial valuations, it is possible that the plans could experience funding deficits that will require the Company to recognize payroll related operating expenses in the periods invoices are received. As of March 31, 2023, all invoices related to MNOPF and MNRPF have been settled in full.

On October 19, 2021, the Company was informed by the MNRPF that two issues had been identified during a review of the MNRPF by the applicable trustee that would potentially give rise to material additional liabilities for the MNRPF. The MNRPF has indicated that the investigations into these issues remain ongoing, and that further updates will be provided as significant developments arise. Should such additional liabilities require the MNRPF to collect additional funds from participating employers, it is possible that the Company will be invoiced for a portion of such funds and recognize payroll related operating expenses in the periods invoices are received.

 

16


12.
STOCK BASED COMPENSATION

Transactions in connection with the Company’s Equity Incentive Plans during the three months ended March 31, 2023 were as follows:

Restricted Stock Activity:

 

 

 

Outstanding as of December 31, 2022

 

 

1,682,193

 

Granted

 

 

594,368

 

Vested

 

 

(588,629

)

Forfeited

 

 

(15,000

)

Outstanding as of March 31, 2023 (1)

 

 

1,672,932

 

 

 

 

Stock Option Activity:

 

 

 

Outstanding as of December 31, 2022

 

 

1,026,865

 

Granted

 

 

 

Exercised

 

 

(834

)

Forfeited

 

 

 

Outstanding as of March 31, 2023

 

 

1,026,031

 

 

(1)
Excludes 156,620 grants of performance-based stock units that are not considered outstanding until such time that they become probable to vest.

For the three months ended March 31, 2023, the Company acquired for treasury 220,207 shares of Common Stock from its directors and/or employees to cover their tax withholding obligations upon the lapsing of restrictions on share awards for an aggregate purchase price of $2.3 million. These shares were purchased in accordance with the terms of the Company’s 2017 Equity Incentive Plan, 2020 Equity Incentive Plan and 2022 Equity Incentive Plan, as applicable.

 

17


13.
SEGMENT INFORMATION

The Company’s segment presentation and basis of measurement of segment profit or loss are as previously described in the 2022 Annual Report. The following tables summarize the operating results, capital expenditures and assets of the Company’s reportable segments for the periods indicated (in thousands):

 

 

United
States
(primarily
Gulf of
Mexico)

 

 

Africa
and Europe

 

 

Middle
East
and Asia

 

 

Latin
America

 

 

Total

 

For the Three Months Ended March 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Time charter

 

$

6,564

 

 

$

18,996

 

 

$

16,028

 

 

$

13,827

 

 

$

55,415

 

Bareboat charter

 

 

 

 

 

 

 

 

 

 

 

360

 

 

 

360

 

Other marine services

 

 

3,842

 

 

 

(834

)

 

 

(142

)

 

 

1,332

 

 

 

4,198

 

 

 

10,406

 

 

 

18,162

 

 

 

15,886

 

 

 

15,519

 

 

 

59,973

 

Direct Costs and Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personnel

 

 

6,535

 

 

 

4,505

 

 

 

4,841

 

 

 

3,922

 

 

 

19,803

 

Repairs and maintenance

 

 

1,194

 

 

 

2,553

 

 

 

677

 

 

 

1,587

 

 

 

6,011

 

Drydocking

 

 

43

 

 

 

1,184

 

 

 

(1,095

)

 

 

(119

)

 

 

13

 

Insurance and loss reserves

 

 

1,041

 

 

 

318

 

 

 

1,185

 

 

 

245

 

 

 

2,789

 

Fuel, lubes and supplies

 

 

783

 

 

 

2,215

 

 

 

1,142

 

 

 

679

 

 

 

4,819

 

Other

 

 

223

 

 

 

1,690

 

 

 

1,327

 

 

 

598

 

 

 

3,838

 

 

 

9,819

 

 

 

12,465

 

 

 

8,077

 

 

 

6,912

 

 

 

37,273

 

Direct Vessel Profit

 

$

587

 

 

$

5,697

 

 

$

7,809

 

 

$

8,607

 

 

 

22,700

 

Other Costs and Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease expense

 

$

136

 

 

$

429

 

 

$

76

 

 

$

79

 

 

 

720

 

Administrative and general

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11,632

 

Depreciation and amortization

 

 

3,535

 

 

 

3,925

 

 

 

3,688

 

 

 

2,614

 

 

 

13,762

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

26,114

 

Gains on asset dispositions and impairments, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,599

 

Operating income

 

 

 

 

 

 

 

 

 

 

 

 

 

$

185

 

As of March 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property and Equipment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Historical Cost

 

$

208,241

 

 

$

287,168

 

 

$

286,795

 

 

$

187,124

 

 

$

969,328

 

Accumulated Depreciation

 

 

(99,165

)

 

 

(96,086

)

 

 

(93,132

)

 

 

(35,814

)

 

 

(324,197

)

 

 

$

109,076

 

 

$

191,082

 

 

$

193,663

 

 

$

151,310

 

 

$

645,131

 

Total Assets (1)

 

$

146,209

 

 

$

216,899

 

 

$

213,461

 

 

$

172,575

 

 

$

749,144

 

 

(1)
Total assets by region does not include corporate assets of $54.4 million as of March 31, 2023.

 

18


 

 

United
States
(primarily
Gulf of
Mexico)

 

 

Africa
and Europe

 

 

Middle
East
and Asia

 

 

Latin
America

 

 

Total

 

For the Three Months Ended March 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Time charter

 

$

7,864

 

 

$

12,280

 

 

$

13,660

 

 

$

8,937

 

 

$

42,741

 

Bareboat charter

 

 

 

 

 

 

 

 

 

 

 

618

 

 

 

618

 

Other

 

 

2,052

 

 

 

(616

)

 

 

49

 

 

 

747

 

 

 

2,232

 

 

 

9,916

 

 

 

11,664

 

 

 

13,709

 

 

 

10,302

 

 

 

45,591

 

Direct Costs and Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personnel

 

 

4,923

 

 

 

3,536

 

 

 

6,031

 

 

 

3,945

 

 

 

18,435

 

Repairs and maintenance

 

 

1,101

 

 

 

1,579

 

 

 

1,832

 

 

 

2,279

 

 

 

6,791

 

Drydocking

 

 

2,867

 

 

 

1,144

 

 

 

962

 

 

 

 

 

 

4,973

 

Insurance and loss reserves

 

 

229

 

 

 

124

 

 

 

507

 

 

 

326

 

 

 

1,186

 

Fuel, lubes and supplies

 

 

662

 

 

 

1,473

 

 

 

1,010

 

 

 

584

 

 

 

3,729

 

Other

 

 

224

 

 

 

1,828

 

 

 

1,627

 

 

 

703

 

 

 

4,382

 

 

 

10,006

 

 

 

9,684

 

 

 

11,969

 

 

 

7,837

 

 

 

39,496

 

Direct Vessel (Loss) Profit

 

$

(90

)

 

$

1,980

 

 

$

1,740

 

 

$

2,465

 

 

 

6,095

 

Other Costs and Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease expense

 

$

287

 

 

$

402

 

 

$

31

 

 

$

340

 

 

 

1,060

 

Administrative and general

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9,924

 

Depreciation and amortization

 

 

4,638

 

 

 

3,258

 

 

 

4,345

 

 

 

2,130

 

 

 

14,371

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

25,355

 

Gains on asset dispositions and impairments, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,139

 

Operating loss

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(17,121

)

As of March 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property and Equipment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Historical Cost

 

$

280,472

 

 

$

241,607

 

 

$

335,121

 

 

$

149,673

 

 

$

1,006,873

 

Accumulated Depreciation

 

 

(130,455

)

 

 

(77,502

)

 

 

(86,682

)

 

 

(21,805

)

 

 

(316,444

)

 

 

$

150,017

 

 

$

164,105

 

 

$

248,439

 

 

$

127,868

 

 

$

690,429

 

Total Assets (1)

 

$

173,269

 

 

$

181,526

 

 

$

254,749

 

 

$

208,711

 

 

$

818,255

 

 

(1)
Total assets by region does not include corporate assets of $84.4 million as of March 31, 2022.

The Company’s investments in 50% or less owned companies, which are accounted for under the equity method, also contribute to its consolidated results of operations. As of March 31, 2023, and 2022, the Company’s investments, at equity and advances to 50% or less owned companies in its other 50% or less owned companies were $3.6 million and $76.9 million, respectively. The significant decrease is the result of the sale of the Company’s interests in MexMar and Offshore Vessels Holding, S.A.P.I. de C.V. (“OVH”). Equity in earnings of 50% or less owned companies for the three months ended March 31, 2023 and 2022 were $0.5 million and $5.7 million, respectively.

14.
SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q and determined that there have been no material events that have occurred that are not properly recognized and/or disclosed in the consolidated financial statements.

 

19


ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Form 10-Q includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements concern management’s expectations, strategic objectives, business prospects, anticipated economic performance and financial condition and other similar matters and involve significant known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of results to differ materially from any future results, performance or achievements discussed or implied by such forward-looking statements. Certain of these risks, uncertainties and other important factors are discussed in the Risk Factors and Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Company’s 2022 Annual Report on Form 10-K and this Quarterly Report on Form 10-Q. However, it should be understood that it is not possible to identify or predict all such risks, uncertainties and factors, and others may arise from time to time. All of these forward-looking statements constitute the Company’s cautionary statements under the Private Securities Litigation Reform Act of 1995. The words “anticipate,” “estimate,” “expect,” “project,” “intend,” “believe,” “plan,” “target,” “forecast” and similar expressions are intended to identify forward-looking statements. Forward looking statements speak only as of the date of the document in which they are made. The Company disclaims any obligation or undertaking to provide any updates or revisions to any forward-looking statement to reflect any change in the Company’s expectations or any change in events, conditions or circumstances on which the forward-looking statement is based. It is advisable, however, to consult any further disclosures the Company makes on related subjects in its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the Securities and Exchange Commission.

The following Management’s Discussion and Analysis (the “MD&A”) is intended to help the reader understand the Company’s financial condition and results of operations. The MD&A is provided as a supplement to and should be read in conjunction with the unaudited consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q, as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in the 2022 Annual Report.

Overview

The Company provides global marine and support transportation services to offshore energy facilities worldwide. As of March 31, 2023, the Company operated a diverse fleet of 59 support vessels, of which 57 were owned or leased-in, and two were managed on behalf of unaffiliated third parties. The primary users of the Company’s services are major integrated national and international oil companies, independent oil and natural gas exploration and production companies, oil field service and construction companies, as well as offshore wind farm operators and offshore wind farm installation and maintenance companies.

The Company operates and manages a diverse fleet of offshore support vessels that (i) deliver cargo and personnel to offshore installations, including offshore wind farms, (ii) assist offshore operations for production and storage facilities, (iii) provide construction, well work-over, offshore wind farm installation and decommissioning support, (iv) carry and launch equipment used underwater in drilling and well installation, maintenance, inspection and repair and (v) handle anchors and mooring equipment for offshore rigs and platforms. Additionally, the Company’s vessels provide emergency response services and accommodations for technicians and specialists.

The Company operates its fleet in four principal geographic regions: the U.S., primarily in the Gulf of Mexico; Africa and Europe; the Middle East and Asia; and Latin America, primarily in Mexico and Guyana. The Company’s vessels are highly mobile and regularly and routinely move between countries within a geographic region. In addition, the Company’s vessels are redeployed among geographic regions, subject to flag restrictions, as changes in market conditions dictate.

Significant items affecting our results of operations

The number and type of vessels operated, their rates per day worked and their utilization levels are the key determinants of the Company’s operating results and cash flows. Unless a vessel is cold-stacked, there is little reduction in daily running costs for the vessels and, consequently, operating margins are most sensitive to changes

 

20


in rates per day worked and utilization. The Company manages its fleet utilizing a global network of shore side support, administrative and finance personnel.

Offshore oil and natural gas market conditions are highly volatile. Prices deteriorated beginning in the second half of 2014 and continued to deteriorate when oil prices hit a 13-year low of less than $27 per barrel (on the New York Mercantile Exchange) in February 2016. Oil prices experienced unprecedented volatility during 2020 due to the COVID-19 pandemic and the related effects on the global economy, with the price per barrel going negative for a short period of time. Oil prices have steadily increased since the lows hit at the beginning of the COVID-19 pandemic and hit a multi-year high of $122 per barrel at points during 2022 primarily as a result of the conflict between Russia and Ukraine as well as the related economic sanctions and economic uncertainty but have recently decreased to the $75 per barrel range.

While the Company has experienced difficult market conditions over the past few years due to low and volatile oil and natural gas prices and the focus of oil and natural gas producing companies on cost and capital spending budget reductions, the increases since the lows experienced during the COVID-19 pandemic in oil and natural gas prices has led to an increase in utilization, day rates and customer inquiries about potential new charters.

Low oil prices and the subsequent decline in offshore exploration have forced many operators in the industry to restructure or liquidate assets. The Company continues to closely monitor the delivery of newly built offshore support vessels to the industry-wide fleet, which in the recent past contributed to an oversaturated market, thereby further lowering the demand for the Company’s existing offshore support vessel fleet. A combination of (i) low customer exploration and drilling activity levels, and (ii) excess supply of offshore support vessels whether from laid up fleets or newly built vessels could, in isolation or together, have a material adverse effect on the Company’s business, financial position, results of operations, cash flows and growth prospects.

Certain macro drivers somewhat independent of oil and natural gas prices may support the Company’s business, including: (i) underspending by oil and natural gas producers during the recent industry downturn leading to pent up demand for maintenance and growth capital expenditures; (ii) improved extraction technologies; and (iii) the need for offshore wind farms support as the industry grows. While the Company expects that alternative forms of energy will continue to grow and add to the world’s energy mix, especially as governments, supranational groups and various other parties focus on climate change causes and concerns, the Company believes that for the foreseeable future demand for gasoline and oil will be sustained, as will demand for electricity from natural gas. Some alternative forms of energy such as offshore wind farms support some of the Company’s businesses and the Company expects such support to increase as development of renewable energy expands.

The Company adheres to a strategy of cold-stacking vessels (removing from active service) during periods of weak utilization in order to reduce the daily running costs of operating the fleet, primarily personnel, repairs and maintenance costs, as well as to defer some drydocking costs into future periods. The Company considers various factors in determining which vessels to cold-stack, including upcoming dates for regulatory vessel inspections and related docking requirements. The Company may maintain class certification on certain cold-stacked vessels, thereby incurring some drydocking costs while cold-stacked. Cold-stacked vessels are returned to active service when market conditions improve, or management anticipates improvement, typically leading to increased costs for drydocking, personnel, repair and maintenance in the periods immediately preceding the vessels’ return to active service. Depending on market conditions, vessels with similar characteristics and capabilities may be rotated between active service and cold-stack. On an ongoing basis, the Company reviews its cold-stacked vessels to determine if any should be designated as retired and removed from service based on the vessel’s physical condition, the expected costs to reactivate and restore class certification, if any, and its viability to operate within current and projected market conditions. As of March 31, 2023, two of the Company’s 57 owned and leased-in vessels were cold-stacked worldwide.

 

21


Recent Developments

SEACOR Marine Foreign Holdings Credit Facility. On March 2, 2023, the Company and SMFH entered into Amendment No. 7 (“SMFH Amendment No. 7”) to that certain Second Amended and Restated Guaranty, dated as of September 29, 2022, issued by the Company in favor of DNB Bank ASA, New York Branch, as security trustee (the “Second A&R SMFH Credit Facility Guaranty”) in connection with that certain senior secured loan facility with a syndicate of lenders administered by DNB Bank ASA, New York Branch, dated as of September 26, 2018 and as amended from time to time (the “SMFH Credit Facility”). SMFH Amendment No. 7 extends the date through which the Company is required to maintain an interest coverage ratio of 1.50:1.00 (as calculated in accordance with the Second A&R SMFH Credit Facility Guaranty) from December 31, 2022 to June 30, 2023. As of the last day of each fiscal quarter thereafter, the interest coverage ratio is required to be at least 2.00:1.00.

SEACOR Offshore OSV. On December 22, 2022, SEACOR Offshore OSV LLC (“SEACOR Offshore OSV”), a wholly owned subsidiary of SEACOR Marine, and certain vessel-owning subsidiaries of SEACOR Offshore OSV, entered into Amendment No. 8 (“Amendment No. 8”) to that certain second amended and restated credit facility agreement with DNB Capital LLC and Comerica Bank, as lenders, and administered by DNB Bank ASA, New York Branch, dated as of December 31, 2021 (as amended from time to time, the “SEACOR OSV Credit Facility”), and in connection with which SEACOR Marine previously entered into a Guaranty, dated as of December 31, 2021, in favor of DNB Bank ASA, New York Branch, as security trustee.

Amendment No. 8 provides for, among other things, the division of the loans under the SEACOR OSV Credit Facility into two tranches of debt, Class A Debt (as defined in the SEACOR OSV Credit Facility) deemed loaned under the SEACOR OSV Credit Facility by DNB Capital LLC in an amount of approximately $10.9 million as of the date of the amendment, and Class B Debt (as defined in the SEACOR OSV Credit Facility) deemed loaned under the SEACOR OSV Credit Facility by Comerica Bank in an amount of approximately $5.6 million as of the date of the amendment. In addition, pursuant to Amendment No. 8, (a) the Final Payment Date (as defined in the SEACOR OSV Credit Facility) of the Class A Debt was extended from December 31, 2023 to March 31, 2026, (b) the Margin (as defined in the SEACOR OSV Credit Facility) of the Class A Debt was increased from 4.68% per annum to 4.75% per annum, and (c) the amortization profile of the Credit Facility was amended such that the borrowers thereunder are required to pay $500,000 per quarter up to and including the quarter ending on December 31, 2023 (at which point all amounts outstanding under the Class B Debt shall become due and payable), and $330,450 per quarter thereafter up to and including March 31, 2026. The Class B Debt maintains substantially the same terms and conditions under the SEACOR OSV Credit Facility as it had prior to Amendment No. 8.

 

22


Consolidated Results of Operations

The sections below provide an analysis of the Company’s results of operations for the three months (“Current Year Quarter”) ended March 31, 2023 compared with the three months (“Prior Year Quarter”) ended March 31, 2022. Except as otherwise noted, there have been no material changes since the end of the Company’s fiscal year ended December 31, 2022, in the Company’s results of operations. For the periods indicated, the Company’s consolidated results of operations were as follows (in thousands, except statistics):

 

 

Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Time Charter Statistics:

 

 

 

 

 

 

 

 

 

 

 

 

Average Rates Per Day

 

$

14,314

 

 

 

 

 

$

11,312

 

 

 

 

Fleet Utilization

 

 

76

%

 

 

 

 

 

70

%

 

 

 

Fleet Available Days

 

 

5,071

 

 

 

 

 

 

5,400

 

 

 

 

Operating Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Time charter

 

$

55,415

 

 

 

92

%

 

$

42,741

 

 

 

94

%

Bareboat charter

 

 

360

 

 

 

1

%

 

 

618

 

 

 

1

%

Other marine services

 

 

4,198

 

 

 

7

%

 

 

2,232

 

 

 

5

%

 

 

59,973

 

 

 

100

%

 

 

45,591

 

 

 

100

%

Costs and Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Operating:

 

 

 

 

 

 

 

 

 

 

 

 

Personnel

 

 

19,803

 

 

 

33

%

 

 

18,435

 

 

 

40

%

Repairs and maintenance

 

 

6,011

 

 

 

10

%

 

 

6,791

 

 

 

15

%

Drydocking

 

 

13

 

 

 

0

%

 

 

4,973

 

 

 

11

%

Insurance and loss reserves

 

 

2,789

 

 

 

5

%

 

 

1,186

 

 

 

3

%

Fuel, lubes and supplies

 

 

4,819

 

 

 

8

%

 

 

3,729

 

 

 

8

%

Other

 

 

3,838

 

 

 

6

%

 

 

4,382

 

 

 

10

%

 

 

37,273

 

 

 

62

%

 

 

39,496

 

 

 

87

%

Lease expense - operating

 

 

720

 

 

 

1

%

 

 

1,060

 

 

 

2

%

Administrative and general

 

 

11,632

 

 

 

19

%

 

 

9,924

 

 

 

22

%

Depreciation and amortization

 

 

13,762

 

 

 

23

%

 

 

14,371

 

 

 

32

%

 

 

63,387

 

 

 

106

%

 

 

64,851

 

 

 

142

%

Gains on Asset Dispositions and Impairments, Net

 

 

3,599

 

 

 

6

%

 

 

2,139

 

 

 

5

%

Operating Income (Loss)

 

 

185

 

 

 

0

%

 

 

(17,121

)

 

 

(38

)%

Other Expense, Net

 

 

(9,153

)

 

 

(15

)%

 

 

(5,811

)

 

 

(13

)%

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

 

 

(8,968

)

 

 

(15

)%

 

 

(22,932

)

 

 

(50

)%

Income Tax Expense (Benefit)

 

 

1,157

 

 

 

2

%

 

 

(2,421

)

 

 

(5

)%

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

 

 

(10,125

)

 

 

(17

)%

 

 

(20,511

)

 

 

(45

)%

Equity in Earnings of 50% or Less Owned Companies

 

 

536

 

 

 

1

%

 

 

5,674

 

 

 

12

%

Net Loss attributable to SEACOR Marine Holdings Inc.

 

$

(9,589

)

 

 

(16

)%

 

$

(14,837

)

 

 

(33

)%

Direct Vessel Profit. Direct vessel profit (defined as operating revenues less operating expenses excluding leased-in equipment, “DVP”) is the Company’s measure of segment profitability. DVP is a critical financial measure used by the Company to analyze and compare the operating performance of its regions, without regard to financing decisions (depreciation and interest expense for owned vessels vs. lease expense for leased-in vessels). See “Note 13. Segment Information” to the Unaudited Consolidated Financial Statements included in Part I. Item 1. “Financial Statements” elsewhere in the Quarterly Report on Form 10-Q.

 

23


The following tables summarize the operating results and property and equipment for the Company’s reportable segments for the periods indicated (in thousands, except statistics):

 

 

United
States
(primarily
Gulf of
Mexico)

 

 

Africa
and Europe

 

 

Middle
East
and Asia

 

 

Latin
America

 

 

Total

 

For the Three Months Ended March 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Time Charter Statistics:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Rates Per Day

 

$

18,359

 

 

$

12,835

 

 

$

13,562

 

 

$

16,229

 

 

$

14,314

 

Fleet Utilization

 

 

35

%

 

 

87

%

 

 

82

%

 

 

94

%

 

 

76

%

Fleet Available Days

 

 

1,015

 

 

 

1,710

 

 

 

1,440

 

 

 

906

 

 

 

5,071

 

Operating Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Time charter

 

$

6,564

 

 

$

18,996

 

 

$

16,028

 

 

$

13,827

 

 

$

55,415

 

Bareboat charter

 

 

 

 

 

 

 

 

 

 

 

360

 

 

 

360

 

Other marine services

 

 

3,842

 

 

 

(834

)

 

 

(142

)

 

 

1,332

 

 

 

4,198

 

 

 

10,406

 

 

 

18,162

 

 

 

15,886

 

 

 

15,519

 

 

 

59,973

 

Direct Costs and Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personnel

 

 

6,535

 

 

 

4,505

 

 

 

4,841

 

 

 

3,922

 

 

 

19,803

 

Repairs and maintenance

 

 

1,194

 

 

 

2,553

 

 

 

677

 

 

 

1,587

 

 

 

6,011

 

Drydocking

 

 

43

 

 

 

1,184

 

 

 

(1,095

)

 

 

(119

)

 

 

13

 

Insurance and loss reserves

 

 

1,041

 

 

 

318

 

 

 

1,185

 

 

 

245

 

 

 

2,789

 

Fuel, lubes and supplies

 

 

783

 

 

 

2,215

 

 

 

1,142

 

 

 

679

 

 

 

4,819

 

Other

 

 

223

 

 

 

1,690

 

 

 

1,327

 

 

 

598

 

 

 

3,838

 

 

 

9,819

 

 

 

12,465

 

 

 

8,077

 

 

 

6,912

 

 

 

37,273

 

Direct Vessel Profit

 

$

587

 

 

$

5,697

 

 

$

7,809

 

 

$

8,607

 

 

 

22,700

 

Other Costs and Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease expense

 

$

136

 

 

$

429

 

 

$

76

 

 

$

79

 

 

 

720

 

Administrative and general

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11,632

 

Depreciation and amortization

 

 

3,535

 

 

 

3,925

 

 

 

3,688

 

 

 

2,614

 

 

 

13,762

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

26,114

 

Gains on Asset Dispositions and Impairments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,599

 

Operating Income

 

 

 

 

 

 

 

 

 

 

 

 

 

$

185

 

As of March 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property and Equipment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Historical cost

 

$

208,241

 

 

$

287,168

 

 

$

286,795

 

 

$

187,124

 

 

$

969,328

 

Accumulated depreciation

 

 

(99,165

)

 

 

(96,086

)

 

 

(93,132

)

 

 

(35,814

)

 

 

(324,197

)

 

$

109,076

 

 

$

191,082

 

 

$

193,663

 

 

$

151,310

 

 

$

645,131

 

Total Assets (1)

 

$

146,209

 

 

$

216,899

 

 

$

213,461

 

 

$

172,575

 

 

$

749,144

 

 

(1)
Total assets by region does not include corporate assets of $54.4 million as of March 31, 2023.

 

24


 

 

United
States
(primarily
Gulf of
Mexico)

 

 

Africa
and Europe

 

 

Middle
East
and Asia

 

 

Latin
America

 

 

Total

 

For the Three Months Ended March 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Time Charter Statistics:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Rates Per Day

 

$

15,595

 

 

$

10,006

 

 

$

9,882

 

 

$

13,450

 

 

$

11,312

 

Fleet Utilization

 

 

38

%

 

 

82

%

 

 

77

%

 

 

85

%

 

 

70

%

Fleet Available Days

 

 

1,314

 

 

 

1,499

 

 

 

1,800

 

 

 

787

 

 

 

5,400

 

Operating Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Time charter

 

$

7,864

 

 

$

12,280

 

 

$

13,660

 

 

$

8,937

 

 

$

42,741

 

Bareboat charter

 

 

 

 

 

 

 

 

 

 

 

618

 

 

 

618

 

Other

 

 

2,052

 

 

 

(616

)

 

 

49

 

 

 

747

 

 

 

2,232

 

 

 

9,916

 

 

 

11,664

 

 

 

13,709

 

 

 

10,302

 

 

 

45,591

 

Direct Costs and Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personnel

 

 

4,923

 

 

 

3,536

 

 

 

6,031

 

 

 

3,945

 

 

 

18,435

 

Repairs and maintenance

 

 

1,101

 

 

 

1,579

 

 

 

1,832

 

 

 

2,279

 

 

 

6,791

 

Drydocking

 

 

2,867

 

 

 

1,144

 

 

 

962

 

 

 

 

 

 

4,973

 

Insurance and loss reserves

 

 

229

 

 

 

124

 

 

 

507

 

 

 

326

 

 

 

1,186

 

Fuel, lubes and supplies

 

 

662

 

 

 

1,473

 

 

 

1,010

 

 

 

584

 

 

 

3,729

 

Other

 

 

224

 

 

 

1,828

 

 

 

1,627

 

 

 

703

 

 

 

4,382

 

 

 

10,006

 

 

 

9,684

 

 

 

11,969

 

 

 

7,837

 

 

 

39,496

 

Direct Vessel (Loss) Profit

 

$

(90

)

 

$

1,980

 

 

$

1,740

 

 

$

2,465

 

 

 

6,095

 

Other Costs and Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease expense

 

$

287

 

 

$

402

 

 

$

31

 

 

$

340

 

 

 

1,060

 

Administrative and general

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9,924

 

Depreciation and amortization

 

 

4,638

 

 

 

3,258

 

 

 

4,345

 

 

 

2,130

 

 

 

14,371

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

25,355

 

Gains on Asset Dispositions and Impairments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,139

 

Operating Loss

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(17,121

)

As of March 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property and Equipment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Historical cost

 

$

280,472

 

 

$

241,607

 

 

$

335,121

 

 

$

149,673

 

 

$

1,006,873

 

Accumulated depreciation

 

 

(130,455

)

 

 

(77,502

)

 

 

(86,682

)

 

 

(21,805

)

 

 

(316,444

)

 

 

$

150,017

 

 

$

164,105

 

 

$

248,439

 

 

$

127,868

 

 

$

690,429

 

Total Assets (1)

 

$

173,269

 

 

$

181,526

 

 

$

254,749

 

 

$

208,711

 

 

$

818,255

 

 

(1)
Total assets by region does not include corporate assets of $84.4 million as of March 31, 2022.

 

25


For additional information, the following tables summarize the worldwide operating results and property and equipment for each of the Company’s vessel classes for the periods indicated (in thousands, except statistics):

 

 

AHTS (1)

 

 

FSV (2)

 

 

PSV (3)

 

 

Liftboats

 

 

Other
activity

 

 

Total

 

For the Three Months Ended March 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Time Charter Statistics:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Rates Per Day

 

$

9,244

 

 

$

10,609

 

 

$

14,827

 

 

$

33,936

 

 

$

 

 

$

14,314

 

Fleet Utilization

 

 

81

%

 

 

91

%

 

 

70

%

 

 

50

%

 

 

%

 

 

76

%

Fleet Available Days

 

 

391

 

 

 

2,070

 

 

 

1,800

 

 

 

810

 

 

 

 

 

 

5,071

 

Operating Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Time charter

 

$

2,915

 

 

$

19,988

 

 

$

18,800

 

 

$

13,712

 

 

$

 

 

$

55,415

 

Bareboat charter

 

 

 

 

 

 

 

 

360

 

 

 

 

 

 

 

 

 

360

 

Other marine services

 

 

(152

)

 

 

(377

)

 

 

840

 

 

 

2,776

 

 

 

1,111

 

 

 

4,198

 

 

 

2,763

 

 

 

19,611

 

 

 

20,000

 

 

 

16,488

 

 

 

1,111

 

 

 

59,973

 

Direct Costs and Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personnel

 

 

995

 

 

 

4,861

 

 

 

8,849

 

 

 

5,068

 

 

 

30

 

 

 

19,803

 

Repairs and maintenance

 

 

216

 

 

 

1,867

 

 

 

3,475

 

 

 

499

 

 

 

(46

)

 

 

6,011

 

Drydocking

 

 

420

 

 

 

128

 

 

 

609

 

 

 

(1,141

)

 

 

(3

)

 

 

13

 

Insurance and loss reserves

 

 

68

 

 

 

334

 

 

 

419

 

 

 

1,907

 

 

 

61

 

 

 

2,789

 

Fuel, lubes and supplies

 

 

476

 

 

 

1,382

 

 

 

2,331

 

 

 

619

 

 

 

11

 

 

 

4,819

 

Other

 

 

295

 

 

 

1,236

 

 

 

2,314

 

 

 

(28

)

 

 

21

 

 

 

3,838

 

 

 

2,470

 

 

 

9,808

 

 

 

17,997

 

 

 

6,924

 

 

 

74

 

 

 

37,273

 

Other Costs and Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease expense

 

$

331

 

 

$

 

 

$

 

 

$

 

 

$

389

 

 

 

720

 

Administrative and general

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11,632

 

Depreciation and amortization

 

 

298

 

 

 

4,946

 

 

 

4,262

 

 

 

4,214

 

 

 

42

 

 

 

13,762

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

26,114

 

Gains on Asset Dispositions and Impairments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,599

 

Operating Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

185

 

As of March 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property and Equipment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Historical cost

 

$

27,646

 

 

$

352,889

 

 

$

301,423

 

 

$

265,309

 

 

$

22,061

 

 

$

969,328

 

Accumulated depreciation

 

 

(18,890

)

 

 

(135,192

)

 

 

(40,943

)

 

 

(107,537

)

 

 

(21,635

)

 

 

(324,197

)

 

 

$

8,756

 

 

$

217,697

 

 

$

260,480

 

 

$

157,772

 

 

$

426

 

 

$

645,131

 

 

(1)
Anchor handling towing supply vessels (“AHTS”).
(2)
Fast support vessels (“FSVs”).
(3)
Platform support vessels (“PSVs”).

 

26


 

 

AHTS

 

 

FSV

 

 

PSV

 

 

Specialty

 

 

Liftboats

 

 

Other
activity

 

 

Total

 

For the Three Months Ended March 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Time Charter Statistics:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Rates Per Day

 

$

8,908

 

 

$

8,621

 

 

$

12,188

 

 

$

 

 

$

22,416

 

 

$

 

 

$

11,312

 

Fleet Utilization

 

 

66

%

 

 

80

%

 

 

72

%

 

 

%

 

 

49

%

 

 

%

 

 

70

%

Fleet Available Days

 

 

540

 

 

 

2,160

 

 

 

1,800

 

 

 

90

 

 

 

810

 

 

 

 

 

 

5,400

 

Operating Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Time charter

 

$

3,188

 

 

$

14,900

 

 

$

15,823

 

 

$

 

 

$

8,830

 

 

$

 

 

$

42,741

 

Bareboat charter

 

 

 

 

 

 

 

 

618

 

 

 

 

 

 

 

 

 

 

 

 

618

 

Other marine services

 

 

(160

)

 

 

(254

)

 

 

44

 

 

 

 

 

 

1,463

 

 

 

1,139

 

 

 

2,232

 

 

 

3,028

 

 

 

14,646

 

 

 

16,485

 

 

 

 

 

 

10,293

 

 

 

1,139

 

 

 

45,591

 

Direct Costs and Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personnel

 

 

1,136

 

 

 

5,070

 

 

 

8,193

 

 

 

1

 

 

 

4,035

 

 

 

 

 

 

18,435

 

Repairs and maintenance

 

 

293

 

 

 

1,800

 

 

 

3,701

 

 

 

 

 

 

1,012

 

 

 

(15

)

 

 

6,791

 

Drydocking

 

 

(7

)

 

 

1,277

 

 

 

1,302

 

 

 

 

 

 

2,401

 

 

 

 

 

 

4,973

 

Insurance and loss reserves

 

 

(137

)

 

 

260

 

 

 

428

 

 

 

2

 

 

 

1,215

 

 

 

(582

)

 

 

1,186

 

Fuel, lubes and supplies

 

 

144

 

 

 

1,544

 

 

 

1,434

 

 

 

2

 

 

 

605

 

 

 

 

 

 

3,729

 

Other

 

 

439

 

 

 

1,941

 

 

 

1,348

 

 

 

11

 

 

 

644

 

 

 

(1

)

 

 

4,382

 

 

 

1,868

 

 

 

11,892

 

 

 

16,406

 

 

 

16

 

 

 

9,912

 

 

 

(598

)

 

 

39,496

 

Other Costs and Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease expense

 

$

449

 

 

$

 

 

$

291

 

 

$

 

 

$

 

 

$

320

 

 

 

1,060

 

Administrative and general

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9,924

 

Depreciation and amortization

 

 

494

 

 

 

4,945

 

 

 

3,786

 

 

 

 

 

 

4,964

 

 

 

182

 

 

 

14,371

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

25,355

 

Gains on Asset Dispositions and Impairments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,139

 

Operating Loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(17,121

)

As of March 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property and Equipment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Historical cost

 

$

50,189

 

 

$

361,785

 

 

$

282,305

 

 

$

3,163

 

 

$

290,529

 

 

$

18,902

 

 

$

1,006,873

 

Accumulated depreciation

 

 

(34,251

)

 

 

(121,714

)

 

 

(24,441

)

 

 

(3,138

)

 

 

(114,480

)

 

 

(18,420

)

 

 

(316,444

)

 

 

$

15,938

 

 

$

240,071

 

 

$

257,864

 

 

$

25

 

 

$

176,049

 

 

$

482

 

 

$

690,429

 

Fleet Counts. The Company’s fleet count as of March 31, 2023 and December 31, 2022 was as follows:

 

 

Owned

 

 

Leased-in

 

 

Managed

 

 

Total

 

March 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

AHTS

 

 

3

 

 

 

1

 

 

 

 

 

 

4

 

FSV

 

 

22

 

 

 

1

 

 

 

2

 

 

 

25

 

PSV

 

 

21

 

 

 

 

 

 

 

 

 

21

 

Liftboats

 

 

9

 

 

 

 

 

 

 

 

 

9

 

 

 

55

 

 

 

2

 

 

 

2

 

 

 

59

 

December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

AHTS

 

 

3

 

 

 

2

 

 

 

 

 

 

5

 

FSV

 

 

22

 

 

 

1

 

 

 

2

 

 

 

25

 

PSV

 

 

21

 

 

 

 

 

 

 

 

 

21

 

Liftboats

 

 

9

 

 

 

 

 

 

 

 

 

9

 

 

 

55

 

 

 

3

 

 

 

2

 

 

 

60

 

 

 

27


Operating Income (Loss)

United States, primarily Gulf of Mexico. For the three months ended March 31, 2023 and 2022 the Company’s time charter statistics and direct vessel profit in the U.S. were as follows (in thousands, except statistics):

 

 

For the Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Time Charter Statistics:

 

 

 

 

 

 

 

 

 

 

 

 

Rates Per Day Worked:

 

 

 

 

 

 

 

 

 

 

 

 

AHTS

 

$

 

 

 

 

 

$

 

 

 

 

FSV

 

 

9,539

 

 

 

 

 

 

10,836

 

 

 

 

PSV

 

 

15,100

 

 

 

 

 

 

14,789

 

 

 

 

Liftboats

 

 

27,065

 

 

 

 

 

 

18,100

 

 

 

 

Overall

 

 

18,359

 

 

 

 

 

 

15,595

 

 

 

 

Utilization:

 

 

 

 

 

 

 

 

 

 

 

 

AHTS

 

 

 

 

 

%

 

 

 

 

 

%

FSV

 

 

 

 

 

55

%

 

 

 

 

 

36

%

PSV

 

 

 

 

 

24

%

 

 

 

 

 

62

%

Liftboats

 

 

 

 

 

31

%

 

 

 

 

 

40

%

Overall

 

 

 

 

 

35

%

 

 

 

 

 

38

%

Available Days:

 

 

 

 

 

 

 

 

 

 

 

 

AHTS

 

 

31

 

 

 

 

 

 

180

 

 

 

 

FSV

 

 

270

 

 

 

 

 

 

270

 

 

 

 

PSV

 

 

171

 

 

 

 

 

 

270

 

 

 

 

Liftboats

 

 

543

 

 

 

 

 

 

594

 

 

 

 

Overall

 

 

1,015

 

 

 

 

 

 

1,314

 

 

 

 

Operating revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Time charter

 

$

6,564

 

 

 

63

%

 

$

7,864

 

 

 

79

%

Other marine services

 

 

3,842

 

 

 

37

%

 

 

2,052

 

 

 

21

%

 

 

10,406

 

 

 

100

%

 

 

9,916

 

 

 

100

%

Direct operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Personnel

 

 

6,535

 

 

 

63

%

 

 

4,923

 

 

 

50

%

Repairs and maintenance

 

 

1,194

 

 

 

11

%

 

 

1,101

 

 

 

11

%

Drydocking

 

 

43

 

 

 

0

%

 

 

2,867

 

 

 

29

%

Insurance and loss reserves

 

 

1,041

 

 

 

10

%

 

 

229

 

 

 

2

%

Fuel, lubes and supplies

 

 

783

 

 

 

8

%

 

 

662

 

 

 

7

%

Other

 

 

223

 

 

 

2

%

 

 

224

 

 

 

2

%

 

 

9,819

 

 

 

94

%

 

 

10,006

 

 

 

101

%

Direct Vessel Profit (Loss)

 

$

587

 

 

 

6

%

 

$

(90

)

 

 

(1

)%

Current Year Quarter compared with Prior Year Quarter

Operating Revenues. Charter revenues were $1.3 million lower in the Current Year Quarter compared with the Prior Year Quarter. Charter revenues were $1.0 million lower due to the repositioning of vessels between geographic regions and $0.3 million lower due to decreased utilization of the vessels included in the results of this region in both comparative periods (as applicable to each region, the “Regional Core Fleet”). Other marine services were $1.8 million higher primarily due to business interruption insurance revenue and higher mobilization revenues. As of March 31, 2023, the Company had two of ten owned and leased-in vessels (one FSV and one liftboat) cold-stacked in this region compared with four of 15 vessels (two AHTS, one FSV and one liftboat) as of March 31, 2022.

Direct Operating Expenses. Direct operating expenses were $0.2 million lower in the Current Year Quarter compared with the Prior Year Quarter. Direct operating expenses were $1.3 million lower due to the repositioning of vessels between geographic regions partially offset by $1.1 million for the Regional Core Fleet primarily due to the timing of the release of accrued aggregate insurance deductibles for prior years and increased labor costs.

 

28


Africa and Europe. For the three months ended March 31, 2023 and 2022 the Company’s time charter statistics and direct vessel profit in Africa and Europe were as follows (in thousands, except statistics):

 

 

For the Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Time Charter Statistics:

 

 

 

 

 

 

 

 

 

 

 

 

Rates Per Day Worked:

 

 

 

 

 

 

 

 

 

 

 

 

AHTS

 

$

10,121

 

 

 

 

 

$

9,925

 

 

 

 

FSV

 

 

12,553

 

 

 

 

 

 

9,862

 

 

 

 

PSV

 

 

15,176

 

 

 

 

 

 

10,483

 

 

 

 

Overall

 

 

12,835

 

 

 

 

 

 

10,006

 

 

 

 

Utilization:

 

 

 

 

 

 

 

 

 

 

 

 

AHTS

 

 

 

 

 

93

%

 

 

 

 

 

100

%

FSV

 

 

 

 

 

93

%

 

 

 

 

 

78

%

PSV

 

 

 

 

 

73

%

 

 

 

 

 

78

%

Overall

 

 

 

 

 

87

%

 

 

 

 

 

82

%

Available Days:

 

 

 

 

 

 

 

 

 

 

 

 

AHTS

 

 

270

 

 

 

 

 

 

270

 

 

 

 

FSV

 

 

900

 

 

 

 

 

 

900

 

 

 

 

PSV

 

 

540

 

 

 

 

 

 

329

 

 

 

 

Overall

 

 

1,710

 

 

 

 

 

 

1,499

 

 

 

 

Operating revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Time charter

 

$

18,996

 

 

 

105

%

 

$

12,280

 

 

 

105

%

Other marine services

 

 

(834

)

 

 

(5

)%

 

 

(616

)

 

 

(5

)%

 

 

18,162

 

 

 

100

%

 

 

11,664

 

 

 

100

%

Direct operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Personnel

 

 

4,505

 

 

 

25

%

 

 

3,536

 

 

 

30

%

Repairs and maintenance

 

 

2,553

 

 

 

14

%

 

 

1,579

 

 

 

14

%

Drydocking

 

 

1,184

 

 

 

7

%

 

 

1,144

 

 

 

10

%

Insurance and loss reserves

 

 

318

 

 

 

2

%

 

 

124

 

 

 

1

%

Fuel, lubes and supplies

 

 

2,215

 

 

 

12

%

 

 

1,473

 

 

 

13

%

Other

 

 

1,690

 

 

 

9

%

 

 

1,828

 

 

 

15

%

 

 

12,465

 

 

 

69

%

 

 

9,684

 

 

 

83

%

Direct Vessel Profit

 

$

5,697

 

 

 

31

%

 

$

1,980

 

 

 

17

%

Current Year Quarter compared with Prior Year Quarter

Operating Revenues. Charter revenues were $6.7 million higher in the Current Year Quarter compared with the Prior Year Quarter. Charter revenues were $4.6 million higher due to the repositioning of vessels between geographic regions and $2.8 million higher for the Regional Core Fleet as a result of increased day rates and utilization partially offset by a $0.7 million decrease due to net asset dispositions. As of March 31, 2023, the Company had no owned or leased-in vessels cold-stacked in this region.

Direct Operating Expenses. Direct operating expenses were $2.8 million higher in the Current Year Quarter compared with the Prior Year Quarter primarily due to the repositioning of vessels between geographic regions.

 

29


Middle East and Asia. For the three months ended March 31, 2023 and 2022 the Company’s time charter statistics and direct vessel (loss) profit in the Middle East and Asia were as follows (in thousands, except statistics):

 

 

For the Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Time Charter Statistics:

 

 

 

 

 

 

 

 

 

 

 

 

Rates Per Day Worked:

 

 

 

 

 

 

 

 

 

 

 

 

AHTS

 

$

5,804

 

 

 

 

 

$

5,785

 

 

 

 

FSV

 

 

8,687

 

 

 

 

 

 

7,382

 

 

 

 

PSV

 

 

8,654

 

 

 

 

 

 

8,239

 

 

 

 

Liftboats

 

 

42,499

 

 

 

 

 

 

29,000

 

 

 

 

Overall

 

 

13,562

 

 

 

 

 

 

9,882

 

 

 

 

Utilization:

 

 

 

 

 

 

 

 

 

 

 

 

AHTS

 

 

 

 

 

71

%

 

 

 

 

 

98

%

FSV

 

 

 

 

 

100

%

 

 

 

 

 

94

%

PSV

 

 

 

 

 

50

%

 

 

 

 

 

60

%

Liftboats

 

 

 

 

 

98

%

 

 

 

 

 

84

%

Overall

 

 

 

 

 

82

%

 

 

 

 

 

77

%

Available Days:

 

 

 

 

 

 

 

 

 

 

 

 

AHTS

 

 

90

 

 

 

 

 

 

90

 

 

 

 

FSV

 

 

720

 

 

 

 

 

 

810

 

 

 

 

PSV

 

 

450

 

 

 

 

 

 

630

 

 

 

 

Liftboats

 

 

180

 

 

 

 

 

 

180

 

 

 

 

Specialty (1)

 

 

 

 

 

 

 

 

90

 

 

 

 

Overall

 

 

1,440

 

 

 

 

 

 

1,800

 

 

 

 

Operating revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Time charter

 

$

16,028

 

 

 

101

%

 

$

13,660

 

 

 

100

%

Other marine services

 

 

(142

)

 

 

(1

)%

 

 

49

 

 

 

0

%

 

 

15,886

 

 

 

100

%

 

 

13,709

 

 

 

100

%

Direct operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Personnel

 

 

4,841

 

 

 

31

%

 

 

6,031

 

 

 

44

%

Repairs and maintenance

 

 

677

 

 

 

5

%

 

 

1,832

 

 

 

13

%

Drydocking

 

 

(1,095

)

 

 

(7

)%

 

 

962

 

 

 

7

%

Insurance and loss reserves

 

 

1,185

 

 

 

7

%

 

 

507

 

 

 

4

%

Fuel, lubes and supplies

 

 

1,142

 

 

 

7

%

 

 

1,010

 

 

 

7

%

Other

 

 

1,327

 

 

 

8

%

 

 

1,627

 

 

 

12

%

 

 

8,077

 

 

 

51

%

 

 

11,969

 

 

 

87

%

Direct Vessel Profit

 

$

7,809

 

 

 

49

%

 

$

1,740

 

 

 

13

%

 

(1)
In the second quarter of 2022, the Company removed from service one specialty vessel in this region. Specialty statistics reflect the removed from service status of this vessel.

Current Year Quarter compared with Prior Year Quarter

Operating Revenues. Charter revenues were $2.4 million higher in the Current Year Quarter compared with the Prior Year Quarter. Charter revenues were $4.3 million higher for the Regional Core Fleet as a result of increased day rates and utilization and $1.9 million lower due to the repositioning of vessels between geographic regions. As of March 31, 2023, the Company had no owned or leased-in vessels cold-stacked in this region compared with one of 20 owned and leased-in vessels (one specialty) as of March 31, 2022.

Direct Operating Expenses. Direct operating expenses were $3.9 million lower in the Current Year Quarter compared with the Prior Year Quarter. Direct operating expenses were $2.4 million lower due to the repositioning of vessels between geographic regions and $1.5 million lower for the Regional Core Fleet primarily due to the insurance reimbursement of costs expensed in prior periods.

 

30


Latin America (Brazil, Mexico, Central and South America). For the three months ended March 31, 2023 and 2022 the Company’s time charter statistics and direct vessel profit in Latin America were as follows (in thousands, except statistics):

 

 

For the Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Time Charter Statistics:

 

 

 

 

 

 

 

 

 

 

 

 

Rates Per Day Worked:

 

 

 

 

 

 

 

 

 

 

 

 

FSV

 

$

10,136

 

 

 

 

 

$

7,786

 

 

 

 

PSV

 

 

16,838

 

 

 

 

 

 

15,225

 

 

 

 

Liftboats

 

 

28,025

 

 

 

 

 

 

35,150

 

 

 

 

Overall

 

 

16,229

 

 

 

 

 

 

13,450

 

 

 

 

Utilization:

 

 

 

 

 

 

 

 

 

 

 

 

FSV

 

 

 

 

 

100

%

 

 

 

 

 

93

%

PSV

 

 

 

 

 

96

%

 

 

 

 

 

87

%

Liftboats

 

 

 

 

 

71

%

 

 

 

 

 

8

%

Overall

 

 

 

 

 

94

%

 

 

 

 

 

85

%

Available Days:

 

 

 

 

 

 

 

 

 

 

 

 

FSV

 

 

180

 

 

 

 

 

 

180

 

 

 

 

PSV

 

 

639

 

 

 

 

 

 

571

 

 

 

 

Liftboats

 

 

87

 

 

 

 

 

 

36

 

 

 

 

Overall

 

 

906

 

 

 

 

 

 

787

 

 

 

 

Operating revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Time charter

 

$

13,827

 

 

 

89

%

 

$

8,937

 

 

 

87

%

Bareboat charter

 

 

360

 

 

 

2

%

 

 

618

 

 

 

6

%

Other marine services

 

 

1,332

 

 

 

9

%

 

 

747

 

 

 

7

%

 

 

15,519

 

 

 

100

%

 

 

10,302

 

 

 

100

%

Direct operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Personnel

 

 

3,922

 

 

 

25

%

 

 

3,945

 

 

 

38

%

Repairs and maintenance

 

 

1,587

 

 

 

10

%

 

 

2,279

 

 

 

22

%

Drydocking

 

 

(119

)

 

 

(1

)%

 

 

 

 

 

%

Insurance and loss reserves

 

 

245

 

 

 

2

%

 

 

326

 

 

 

3

%

Fuel, lubes and supplies

 

 

679

 

 

 

5

%

 

 

584

 

 

 

6

%

Other

 

 

598

 

 

 

4

%

 

 

703

 

 

 

7

%

 

 

6,912

 

 

 

45

%

 

 

7,837

 

 

 

76

%

Direct Vessel Profit

 

$

8,607

 

 

 

55

%

 

$

2,465

 

 

 

24

%

Current Year Quarter compared with Prior Year Quarter

Operating Revenues. Charter revenues were $4.6 million higher in the Current Year Quarter compared with the Prior Year Quarter. Charter revenues were $3.4 million higher due to the repositioning of vessels between geographic regions and $1.2 million higher for the Regional Core Fleet as a result of increased day rates and utilization. As of March 31, 2023, the Company had no owned or leased-in vessels cold-stacked in this region.

Direct Operating Expenses. Direct operating expenses were $0.9 million lower in the Current Year Quarter compared with the Prior Year Quarter primarily due to the timing of certain repair expenditures.

Other Operating Expenses

Lease Expense. Leased-in equipment expense for the Current Year Quarter was essentially flat compared with the Prior Year Quarter.

Administrative and general. Administrative and general expenses for the Current Year Quarter were $1.7 million higher compared to the Prior Year Quarter due to increases in salaries and benefits expenses in the Current Year Quarter.

Depreciation and amortization. Depreciation and amortization expense for the Current Year Quarter were $0.6 million lower compared to the Prior Year Quarter primarily due to net fleet changes.

 

 

31


Gains (Losses) on Asset Dispositions and Impairments, Net. During the Current Year Quarter, the Company sold three liftboats and other equipment, previously classified as held for sale, as well as other equipment, for net cash proceeds of $7.6 million, after transaction costs, and a gain of $2.6 million. During the Prior Year Quarter, the Company sold one liftboat, previously removed from service and office space for net cash proceeds of $5.3 million, after transaction costs, and a gain of $2.2 million, which included impairment charges of $0.9 million for the FSV classified as held for sale during the first quarter of 2022 and sold during the second quarter of 2022.

 

Other Income (Expense), Net

For the three months ended March 31, 2023 and 2022, the Company’s other income (expense) was as follows (in thousands):

 

 

Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Other Income (Expense):

 

 

 

 

 

 

Interest income

 

$

460

 

 

$

29

 

Interest expense

 

 

(8,788

)

 

 

(6,627

)

Derivative losses, net

 

 

 

 

 

(34

)

Foreign currency gains (losses), net

 

 

(825

)

 

 

821

 

 

$

(9,153

)

 

$

(5,811

)

Interest income. Interest income for the Current Year Quarter compared with the Prior Year Quarter was higher due to interest received for the loan due from MexMar.

Interest expense. Interest expense was higher in the Current Year Quarter compared with the Prior Year Quarter primarily due to a higher interest rate on the SMFH Credit Facility, a higher interest rate due to the exchange of the Old Convertible Notes for the Guaranteed Notes and the New Convertible Notes and higher interest rates on variable rate debt.

Derivative losses, net. Net derivative losses for the Current Year Quarter compared with the Prior Year Quarter decreased due to the Company no longer having a conversion option liability.

Foreign currency gains (losses), net. Foreign currency gains for the Current Year Quarter compared to foreign currency losses for the Prior Year Quarter was primarily due to various changes in foreign currencies.

Income Tax Expense

During the three months ended March 31, 2023, the Company’s effective income tax rate of 12.89% was primarily due to foreign taxes paid that are not creditable against U.S. income taxes and foreign losses for which there is no benefit in the U.S.

Equity in Earnings of 50% or Less Owned Companies

Equity in earnings of 50% or less owned companies for the Current Year Quarter compared with the Prior Year Quarter were $5.1 million lower due to the following changes in equity earnings (losses) (in thousands):

 

 

Three Months Ended March 31,

 

 

 

 

2023

 

 

2022

 

 

MexMar

 

$

 

 

$

4,233

 

 

SEACOR Arabia

 

 

202

 

 

 

511

 

 

Offshore Vessel Holdings

 

 

 

 

 

615

 

 

Other

 

 

334

 

 

 

315

 

 

 

$

536

 

 

$

5,674

 

 

MexMar, OVH and SEACOR Marlin. On September 29, 2022, each of the Framework Agreement Transactions were consummated. As a result, the Company no longer owns any equity interest in either MexMar

 

32


or in OVH, and the Company owns all of the equity interests in SEACOR Marlin LLC. As a result, the Company expects its equity in earnings of 50% or less owned companies not to be significant in future periods.

Liquidity and Capital Resources

General

The Company’s ongoing liquidity requirements arise primarily from working capital needs, capital commitments and its obligations to service outstanding debt and comply with covenants under its debt facilities. The Company may use its liquidity to fund capital expenditures, make acquisitions or to make other investments. Sources of liquidity are cash balances, construction reserve funds, cash flows from operations and collections of our short-term note receivable. From time to time, the Company may secure additional liquidity through asset sales or the issuance of debt, shares of Common Stock or common stock of its subsidiaries, preferred stock or a combination thereof.

As of March 31, 2023, the Company held balances of cash, cash equivalents and restricted cash totaling $43.7 million. As of March 31, 2022, the Company held balances of cash, cash equivalents and restricted cash totaling $39.9 million. The Company also expects that it will receive $5.0 million for each of the next two quarters as MexMar pays off the remaining $10.0 million under its loan which is held entirely by the Company.

As of March 31, 2023, the Company had outstanding debt of $315.0 million, net of debt discount and issue costs. The Company’s contractual long-term debt maturities as of March 31, 2023, are as follows (in thousands):

 

 

Actual

 

Remainder 2023

 

$

52,904

 

2024

 

$

66,656

 

2025

 

$

23,951

 

2026

 

$

162,897

 

2027

 

$

11,365

 

Years subsequent to 2027

 

$

37,413

 

 

$

355,186

 

As of March 31, 2023, the Company had unfunded capital commitments of $1.7 million for miscellaneous vessel equipment payable during the remainder of 2023. The Company has indefinitely deferred an additional $9.3 million of orders with respect to one FSV that the Company had previously reported as unfunded capital commitments.

Summary of Cash Flows

The following is a summary of the Company’s cash flows for the three months ended March 31, 2023 and 2022 (in thousands):

 

 

Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Cash flows provided by or (used in):

 

 

 

 

 

 

Operating Activities

 

$

(552

)

 

$

1,115

 

Investing Activities

 

 

12,141

 

 

 

5,466

 

Financing Activities

 

 

(10,982

)

 

 

(7,889

)

Effects of Exchange Rate Changes on Cash, Restricted Cash and Cash Equivalents

 

 

 

 

 

(1

)

Net Change in Cash, Restricted Cash and Cash Equivalents

 

$

607

 

 

$

(1,309

)

Operating Activities

Cash flows provided by operating activities decreased by $1.7 million in the Current Year Quarter compared with the Prior Year Quarter primarily due to working capital timing. The components of cash flows

 

33


provided by and/or used in operating activities during the Current Year Quarter and Prior Year Quarter were as follows (in thousands):

 

 

Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

DVP:

 

 

 

 

 

 

United States, primarily Gulf of Mexico

 

$

587

 

 

$

(90

)

Africa and Europe

 

 

5,697

 

 

 

1,980

 

Middle East and Asia

 

 

7,809

 

 

 

1,740

 

Latin America

 

 

8,607

 

 

 

2,465

 

Operating, leased-in equipment

 

 

(641

)

 

 

(543

)

Administrative and general (excluding provisions for bad debts and amortization of share awards)

 

 

(10,509

)

 

 

(9,020

)

Dividends received from 50% or less owned companies

 

 

 

 

 

725

 

 

 

11,550

 

 

 

(2,743

)

Changes in operating assets and liabilities before interest and income taxes

 

 

(6,314

)

 

 

7,301

 

Cash settlements on derivative transactions, net

 

 

154

 

 

 

(373

)

Interest paid, excluding capitalized interest (1)

 

 

(5,956

)

 

 

(3,099

)

Interest received

 

 

460

 

 

 

29

 

Income taxes paid, net

 

 

(446

)

 

 

 

Total cash flows (used in) provided by operating activities

 

$

(552

)

 

$

1,115

 

 

(1)
During the Current Year Quarter and the Prior Year Quarter, the Company paid no capitalized interest.

For a detailed discussion of the Company’s financial results for the reported periods, see “Consolidated Results of Operations” included above. Changes in operating assets and liabilities before interest and income taxes are the result of the Company’s working capital requirements.

Investing Activities

During the Current Year Quarter, net cash provided by investing activities was $12.1 million, primarily as a result of the following:

capital expenditures were $0.5 million;
the Company sold other equipment for net cash proceeds of $7.6 million, after transaction costs, and a gain of $2.6 million; and
the Company received $5.0 million of principal payments under the MexMar Original Facility Agreement.

During the Prior Year Quarter, net cash provided by investing activities was $5.5 million, primarily as a result of the following:

capital expenditures were less than $0.1 million;
the Company sold one liftboat, previously removed from service, and office space for net cash proceeds of $5.3 million, after transaction costs, and a gain of $3.1 million;
the Company received $0.2 million from investments in, and advances to, its 50% or less owned companies for principal payments on notes receivables.

Financing Activities

During the Current Year Quarter, net cash used in financing activities was $11.0 million, primarily as a result of the following:

the Company made scheduled payments on long-term debt and other obligations of $8.6 million;
the Company made payments on finance leases of $0.1 million; and
the Company made payments on tax withholdings for restricted stock vesting of $2.3 million.

 

34


During the Prior Year Quarter, net cash used in financing activities was $7.9 million primarily as a result of the following:

the Company made scheduled payments on long-term debt and obligations of $7.3 million; and
the Company received $0.1 million proceeds from the exercise of stock options; and
the Company made payments on tax withholdings for restricted stock vesting of $0.7 million.

Short and Long-Term Liquidity Requirements

The Company believes that a combination of cash balances on hand, cash generated from operating activities, collections of our short-term note receivable and access to the credit and capital markets will provide sufficient liquidity to meet its obligations, including to support its capital expenditures program, working capital needs, debt service requirements and covenant compliance over the short to long term. The Company continually evaluates possible acquisitions and dispositions of certain businesses and assets. The Company’s sources of liquidity may be impacted by the general condition of the markets in which it operates and the broader economy as a whole, which may limit its access to or the availability of the credit and capital markets on acceptable terms. Management continuously monitors the Company’s liquidity and compliance with covenants in its credit facilities.

While the COVID-19 pandemic initially reduced the demand for the Company’s products and services, the COVID-19 pandemic has not had a material impact on the Company’s liquidity or on the Company’s ability to meet its financial maintenance covenants in its various credit facilities. However, if the COVID-19 pandemic does not fully abate, new vaccine resistant strains appear, or certain countries implement new shutdowns, the effects of the pandemic on the Company’s business may become more severe, for example by further reducing demand for the Company’s products and services or causing customers not to make their payments on time, and this may have a material impact on the Company.

Note Receivable

For a discussion of the Company’s short-term note receivable agreement see “Note 2. Note Receivable” in the unaudited consolidated financial statements included in Part I. Item 1. “Financial Statements” elsewhere in this Quarterly Report on Form 10-Q.

Debt Securities and Credit Agreements

For a discussion of the Company’s debt securities and credit agreements, see “Note 5. Long-Term Debt” in the unaudited consolidated financial statements included in Part I. Item 1. “Financial Statements” elsewhere in this Quarterly Report on Form 10-Q and in “Note 8. Long-Term Debt” in the Company’s audited consolidated financial statements included in its 2022 Annual Report. Other than as set forth below there has not been any material changes to the agreements governing the Company’s long-term debt during the period.

On March 2, 2023, the Company and SMFH entered into SMFH Amendment No. 7 to the Second A&R SMFH Credit Facility Guaranty. SMFH Amendment No. 7 extends the date through which the Company is required to maintain an interest coverage ratio of 1.50:1.00 (as calculated in accordance with the Second A&R SMFH Credit Facility Guaranty) from December 31, 2022 to June 30, 2023. As of the last day of each fiscal quarter thereafter, the interest coverage ratio is required to be at least 2.00:1.00.

 

35


Future Cash Requirements

For a discussion of the Company’s future cash requirements, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” in the Company’s 2022 Annual Report. There has been no material change in the Company’s future cash requirements since our fiscal year ended December 31, 2022, except as described in “Results of Operations - Liquidity and Capital Resources”.

Contingencies

For a discussion of the Company’s contingencies, see “Note 11. Commitments and Contingencies” in the unaudited consolidated financial statements included in Part I. Item 1. “Financial Statements” elsewhere in this Quarterly Report on Form 10-Q.

 

36


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For a discussion of the Company’s exposure to market risk, refer to “Quantitative and Qualitative Disclosures About Market Risk” included in the Company’s 2022 Annual Report. There has been no material change in the Company’s exposure to market risk during the three months ended March 31, 2023.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

With the participation of the Company’s principal executive officer and principal financial officer, management evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of March 31, 2023. Based on their evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2023 to provide reasonable assurance that information required to be disclosed by the Company in reports filed or submitted under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and (ii) accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

The Company’s disclosure controls and procedures have been designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, to allow timely decisions regarding required disclosures. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those internal control systems determined to be effective can provide only a level of reasonable assurance with respect to financial statement preparation and presentation.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the Current Year Quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

 

37


PART II—OTHER INFORMATION

For a description of developments with respect to pending legal proceedings described in the Company’s 2022 Annual Report, see “Note 11. Commitments and Contingencies” included in Part I. Item 1. “Financial Statements” elsewhere in this Quarterly Report on Form 10-Q.

ITEM 1A. RISK FACTORS

For a discussion of the Company’s risk factors, refer to “Risk Factors” included in the Company’s 2022 Annual Report. There have been no material changes in the Company’s risk factors during the Current Year Quarter.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a), (b) None.

(c) This table provides information with respect to purchases by the Company of shares of its Common Stock during the Current Year Quarter:

 

 

Total Number of
Shares Withheld

 

 

Average Price per
Share

 

 

Total Number of
Shares Purchased
as Part of a Publicly
Announced Plan

 

 

Maximum Number
of Shares that may
be Purchased Under
the Plan

 

January 1, 2023 to January 31, 2023

 

 

 

 

$

 

 

 

 

 

 

 

February 1, 2023 to February 28, 2023

 

 

 

 

$

 

 

 

 

 

 

 

March 1, 2023 to March 31, 2023

 

 

220,207

 

 

$

10.29

 

 

 

 

 

 

 

For the three months ended March 31, 2023, the Company acquired for treasury 220,207 shares of Common Stock from its employees for an aggregate purchase price of $2,265,930 to cover their tax withholding obligations upon the lapsing of restrictions on share awards. These shares were purchased in accordance with the terms of the Company’s 2017 Equity Incentive Plan, 2020 Equity Incentive Plan and 2022 Equity Incentive Plan, as applicable.

ITEM 3. DEFAULT UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

 

38


ITEM 6. EXHIBITS

 

 

 

10.1*

 

Amendment No. 7 to Second Amended and Restated Guaranty, dated as of March 2, 2023, by and among, inter alios, SEACOR Marine Holdings Inc., DNB Bank ASA, New York Branch, and the consenting lenders thereto (incorporated herein by reference to Exhibit 10.46 of SEACOR Marine Holdings Inc.’s Form 10-K filed with the Commission on March 6, 2023 (File No. 001-37966)).

 

 

 

10.2+

 

Form of Restricted Stock Grant Agreement under the SEACOR Marine Holdings Inc. 2022 Equity Incentive Plan.

 

 

 

10.3+

 

Form of Performance Restricted Stock Unit Grant Agreement under the SEACOR Marine Holdings Inc. 2022 Equity Incentive Plan.

 

31.1

 

Certification by the Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.

 

31.2

Certification by the Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.

 

32

Certification by the Principal Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

101.INS**

Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

 

101.SCH**

Inline XBRL Taxonomy Extension Schema

 

101.CAL**

Inline XBRL Taxonomy Extension Calculation Linkbase

 

101.DEF**

Inline XBRL Taxonomy Extension Definition Linkbase

 

101.LAB**

Inline XBRL Taxonomy Extension Label Linkbase

 

101.PRE**

Inline XBRL Taxonomy Extension Presentation Linkbase

 

 

 

104

 

The cover page for the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, has been formatted in Inline XBRL.

 

 

 

* Incorporated by reference.

+ Management contract or compensatory plan or arrangement.

** Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability.

 

39


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

 

 

SEACOR Marine Holdings Inc. (Registrant)

 

 

 

 

 

 

Date:

 

May 3, 2023

By:

 

/s/ John Gellert

 

 

 

 

 

John Gellert, President,

Chief Executive Officer

(Principal Executive Officer)

 

 

 

 

 

 

Date:

 

May 3, 2023

By:

 

/s/ Jesús Llorca

 

 

 

 

 

Jesús Llorca, Executive Vice President

and Chief Financial Officer

(Principal Financial Officer)

 

Date:

 

May 3, 2023

By:

 

/s/ Gregory S. Rossmiller

 

 

 

 

 

Gregory S. Rossmiller,

Senior Vice President

and Chief Accounting Officer

(Principal Accounting Officer)

 

 

 

40