THE WOODLANDS, Texas, July 29, 2009 (GLOBE NEWSWIRE) -- Trico Marine Services, Inc. (Nasdaq:TRMA) (the "Company" or "Trico") today announced its financial results for the second quarter of 2009 of revenues of $180 million, adjusted EBITDA of $31 million and adjusted net income of $0.33 per diluted share. The increases over first quarter of 2009 were due to substantial growth and improvement in the Company's subsea service businesses.
Chairman and Chief Executive Officer, Joseph S. Compofelice, commented, "The strength of our second quarter results is the result of the transition to a subsea service company and reflect not only our progress but the fundamental growth in the subsea sector. As a result of strong backlogs, each of DeepOcean and CTC Marine delivered substantial revenue, earnings and cash flow improvement in China, Mexico and Brazil with less dependence on their historical home market in the North Sea. Utilization of our subsea fleet in the quarter was very high and we expect similar utilization in the third quarter. Our strengthened results are led by a combination of 80% of our business being in the subsea service segments and all of our consolidated business coming from international markets."
"At the same time," Mr. Compofelice continued, "we have liquidity challenges to meet. We will continue to be proactive in reducing our debt and capital expenditure commitments to improve our liquidity for the remainder of 2009 and 2010. We have completed OSV asset sales in the first half of 2009 and expect further sales in the second half, with proceeds used to reduce debt."
Summary Results Compared to Q1 2009
Total revenues for the second quarter of 2009 were $180 million, compared to $122 million for the first quarter of 2009 and adjusted EBITDA was $31 million on operating income of $15 million. The substantial increase from the first quarter of 2009 was primarily due to increased utilization and rates in both of our subsea segments. In addition, operating costs declined in all segments.
Division Results
In the Company's Subsea Services segment, principally DeepOcean, revenues increased by $26 million and adjusted EBITDA increased by $17 million over the first quarter due to virtually full utilization of all of its vessels and equipment at rates which, on average, were 16% higher than the previous quarter due to overall increases in the breadth of service offerings.
In the Company's Subsea Trenching and Protection segment, CTC Marine, revenues increased by $42 million and adjusted EBITDA increased by $11 million over the first quarter due to almost 100% utilization at average rate increases of 40% driven by service mix.
Each of DeepOcean and CTC Marine are virtually booked for the third quarter 2009.
For the Towing and Supply segment, day rates and utilization continue to reflect the weakness in the North Sea and U.S. Gulf of Mexico spot markets. During the quarter, the Company sold one North Sea class PSV and five Gulf class OSVs for approximately $30 million. In addition, the Company has targeted additional vessels for sale, as the Company continues to seek ways to reduce its exposure to the spot market Towing and Supply sector.
Liquidity
Since the end of the prior quarter and through the date of this release, the Company has, through a series of transactions, continued to delever as follows:
* Completed the exchange of its 6.5% convertible notes in exchange
for new 8.125% convertible notes, effectively reducing the face
amount of principal by $50 million and eliminating potentially
$72 million in "make-whole" exposure payments relating to early
conversions;
* Used $15 million of proceeds from asset sales to pay down debt; and
* Terminated the obligation to fund the construction of a new vessel,
the Deep Cygnus, when financing terms were not favorable to the
Company -- reducing the Company's capital expenditure obligation by
an additional $42 million.
The Company's liquidity position has changed from the end of the first quarter due to two main reasons: 1) cash decreased primarily due to the pay down of debt partially offset by asset sales and 2) deteriorating performance by the Company's towing and supply business. In the short term, the Company has a principal payment of approximately $100 million due in January 2010. As a result of the changes in its liquidity position, the Company needs to refinance the underlying debt in order to satisfy this obligation. The Company is also working with its lead bank to address potential debt covenant issues later in 2009. All options, including further asset sales, refinancings and debt restructurings are being pursued.
At June 30, 2009, the Company had $35 million in cash and $708 million in total debt, a reduction of over $50 million in total debt from the end of the prior quarter.
At June 30, 2009, taking into account the cancellation of its funding obligation related to the Deep Cygnus, the Company's cash and credit availability to fund capital expenditures was $123 million.
Market Outlook
Looking forward, based on recent contract awards and tender activity in its subsea segments, the Company anticipates third quarter results to be consistent with activity levels in the second quarter of 2009. Recent contract awards include:
* Being awarded a two year contract commencing in August 2009 with
Petrobras, totaling over $15 million in anticipated revenues and
significantly increasing the Company's revenues in Brazil;
* Extending a contract for pipeline ploughing related work in China,
raising the value from $12 million to $18 million; and
* Extending a contract through October 2009 for construction and
cable installation in China, an overall $6 million increase.
In addition, the Company secured several cable lay and burial contracts in Europe for wind power projects and was awarded a pipeline trenching contract from Shell utilizing CTC's newest asset, the world's largest rock trencher, RT-1, performing its inaugural scope of work.
The Company's backlog remains healthy at approximately $750 million of termed out or long-term contracts primarily in its subsea segments. In the second quarter of 2009, approximately 90% of its business was with major or national oil companies and 99% of the Company's business was outside of U.S. waters. On a consolidated basis, revenues for the second quarter had the following geographic mix: 45% in the North Sea, of which approximately half are subject to long-term contracts, 18% in China, where the Company currently has four subsea service spreads in the South China Sea, 12% in Mexico and Brazil and 22% in West Africa, the Mediterranean and Australia.
Conference Call Information
The Company will conduct a conference call at 8:30 a.m. ET on Thursday, July 30, 2009, to discuss the results with analysts, investors and other interested parties. Individuals who wish to participate in the conference call should dial (888) 437-9364, access code 8947026, in the United States or (719) 457-2654, access code 8947026, from outside the country.
A telephonic replay of the conference call will be available until August 13, 2009, starting approximately 1 hour after the completion of the call, and can be accessed by dialing (888) 203-1112 access code 8947026 (international calls should use (719) 457-0820, access code 8947026).
About Trico
Trico Marine is an integrated provider of subsea, trenching and marine support vessels and services. The Company has increased its subsea market presence through its acquisition of DeepOcean and CTC Marine in 2008, a recognized market leader in the provision of high-quality subsea services including IMR, survey and construction support, subsea intervention and decommissioning, marine trenching and the laying and burying of subsea cable. DeepOcean controls a well-equipped fleet of vessels and operates a fleet of modern ROVs and trenching equipment. Trico Marine also continues to provide a broad range of marine support services to the oil and gas industry through use of its diversified fleet of vessels including the transportation of drilling materials, supplies and crews to drilling rigs and other offshore facilities; towing drilling rigs and equipment; and support for the construction, installation, repair and maintenance of offshore facilities. Trico Marine is headquartered in The Woodlands, Texas and has a global presence with operations in the North Sea, West Africa, Mexico, Brazil, the Mediterranean and Southeast Asia as well as the U.S. Gulf of Mexico.
For more information about Trico Marine Services, Inc. visit us on the web at www.tricomarine.com.
Certain statements in this press release that are not historical fact may be "forward looking statements." Forward-looking statements are projections of events, revenues, income, future economic performance or management's plans and objectives for the Company's future operations. Actual events may differ materially from those projected in any forward-looking statement.
