SEACOR Marine Holdings Inc. — FY2023 Form 10-K
Business and period. The filing covers the fiscal year ended December 31, 2023; it is an annual report, not a standalone Q4 report. SEACOR Marine provides offshore support and transportation services to energy and offshore-wind customers. At year-end, it operated 58 vessels: 55 owned or leased-in and three managed. Operations span the United States, Africa and Europe, the Middle East and Asia, and Latin America.
Financial performance and liquidity
| Metric | 2023 | 2022 |
|---|---|---|
| Operating revenue | $279.5 million | $217.3 million |
| Operating income (loss) | $35.5 million | $(54.0) million |
| Net income (loss) | $(9.3) million | $(71.6) million |
| Cash provided by (used in) operations | $8.9 million | $(14.6) million |
| Cash, cash equivalents and restricted cash at year-end | $84.1 million | $43.0 million |
| Gross debt principal at year-end | $353.0 million | $363.8 million |
- Revenue increased 28.6%. Average time-charter rate rose to $16,375 per day from $12,673; fleet utilization was unchanged at 75%. Fleet available days declined to 20,519 from 21,291.
- Direct vessel profit, the Company’s segment profitability measure, increased to $119.9 million from $45.3 million. Its ratio to revenue was approximately 42.9%, versus 20.9% in 2022. GAAP operating margin was approximately 12.7% in 2023; net margin was approximately negative 3.3%.
- Operating income included $21.4 million of net gains on asset dispositions and impairments, principally a $21.1 million gain on asset sales. Excluding this item, operating income would have been materially lower.
- Net loss narrowed, but interest expense rose to $37.5 million from $29.7 million. Income-tax expense was $8.8 million; the unusually high 216.2% effective tax rate primarily reflected foreign withholding taxes.
- Operating cash flow improved by $23.6 million year over year, but working-capital changes were a significant use of cash, including a $17.2 million increase in accounts receivable. Investing cash flow of $49.1 million included $44.7 million of asset-sale proceeds and $15.0 million of MexMar loan repayments; capital expenditures were $10.6 million.
- Year-end cash and cash equivalents were $67.5 million, with a further $16.7 million restricted. Gross debt principal was $353.0 million; its reported carrying amount, net of discount and issuance costs, was $315.9 million. About $68.6 million of debt bore floating rates. The Company reported covenant compliance at year-end.
Material changes versus 2022
- Revenue growth reflected higher charter rates and regional activity, notably in Africa and Europe, the Middle East and Asia, and Latin America. Direct vessel profit improved in all four reported regions. U.S. utilization remained comparatively weak at 45%, down from 49%.
- Operating expenses declined to $265.4 million from $272.7 million, despite higher administrative and general expense ($49.2 million versus $40.9 million). The Company cited increased wages and benefits, credit-loss allowance and professional fees; the credit-loss allowance charge was $3.5 million versus $0.5 million.
- In September 2023, the Company refinanced multiple facilities with a $122 million senior secured term loan maturing in 2028, bearing fixed interest at 11.75%. A separate $28 million secured facility refinanced shipyard financing and matures in 2028. Refinancing extended maturities but increased financing costs; 2023 interest expense also reflected other debt and rate changes.
- The Company sold vessels and equipment for $44.7 million net proceeds, versus $6.7 million in 2022, and recognized $0.7 million of impairment charges, compared with $2.9 million. Its fleet declined to 58 vessels from 60.
Outlook, risks and unusual items
- Management provided no specific revenue or earnings guidance. It expects available cash, operating cash flow and access to credit and capital markets—including approximately $24.9 million remaining under its $25 million ATM program—to support liquidity needs. This assessment is subject to market conditions and covenant compliance.
- For 2024, the Company expects approximately $59.9 million of principal and interest payments, $15.5 million of capital expenditures, $1.6 million of retirement-plan payments and $1.9 million of lease payments. Separately, $13.5 million of the $15.5 million unfunded equipment commitments was payable in 2024; another $2.0 million was payable in 2025. An additional $9.2 million FSV commitment was indefinitely deferred.
- Management expects inflationary pressures to continue affecting margins and the business in 2024. Offshore demand remains exposed to commodity-price and customer-spending cycles, vessel supply, seasonality, competition, weather, regional instability and environmental regulation.
- Customer concentration is significant: ExxonMobil, SEACOR Marine Arabia (serving Saudi Aramco) and Azule accounted for 17%, 15% and 15% of 2023 continuing-operations revenue, respectively; the ten largest customers represented about 73%. Many charters may be canceled on relatively short notice.
- Business-interruption insurance recoveries contributed $6.5 million of 2023 operating revenue. The 2021 SEACOR Power capsizing resulted in fatalities and the constructive total loss of the vessel; the Company says injury and death claims for which it had financial exposure have been resolved. A separate 2023 liftboat incident caused significant vessel downtime but no casualties.
- The Company recognized a $1.5 million MNRPF pension-deficit allocation in 2023, payable in 2024 and 2025. A disputed Brazilian tax deficiency notice has a stated potential levy of approximately $4.8 million at the year-end exchange rate; the administrative proceeding remains unresolved. Management does not expect ordinary-course litigation, in aggregate, to have a material financial effect.
- Grant Thornton issued unqualified opinions on the financial statements and internal control over financial reporting; the auditor reported no critical audit matters. Management also concluded disclosure controls and internal control over financial reporting were effective.
Important facts for investors to verify
- Whether higher charter rates and utilization can continue, particularly given 45% U.S. utilization and the Company’s exposure to cyclical offshore spending.
- Cash conversion and receivable collectability, including the increase in trade receivables and credit-loss allowance.
- Debt-service capacity and refinancing risk, especially the $152.4 million of principal maturities in 2026 and the cost and covenants of the 11.75% secured facility.
- Whether asset-sale gains, insurance recoveries and other unusual items are recurring; review underlying operating performance separately from these items.
- Developments in the Brazilian tax matter, pension-plan funding assessments, and the execution and timing of hybrid-battery and other capital commitments.