UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
Date of Report (Date of earliest event reported):
May 13, 2004 (May 13, 2004)
___________________
TORCH OFFSHORE, INC.
(Exact Name of Registrant as Specified in its Charter)
000-32855
(Commission File Number)
Delaware 74-2982117
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
401 Whitney Avenue, Suite 400
Gretna, Louisiana 70056-2596
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code:
(504) 367-7030
ITEM 7. FINANCIAL STATEMENTS, PROFORMA FINANCIAL
INFORMATION AND EXHIBITS.
(a) Not applicable.
(b) Not applicable.
(c) Exhibits.
The following exhibits are filed herewith:
Exhibit No. Description
----------- -----------
99.1 Torch Offshore, Inc. Press Release, dated
May 13, 2004.
ITEM 12. RESULT OF OPERATIONS AND FINANCIAL CONDITION.
On May 13, 2004, Torch Offshore, Inc. (the "Company") issued
a press release announcing operating results for the quarter
ended March 31, 2004. A copy of this press release is
furnished as Exhibit 99.1 to this report and incorporated by
reference herein.
The Company has presented its EBITDA, as adjusted, for the
three-month period ended March 31, 2004 in the press
release, which is a "non-GAAP" financial measure under
Regulation G. The components of EBIDTA, as adjusted, are
computed by using amounts, which are determined in
accordance with GAAP. As part of our press release
information, we have provided a reconciliation of EBITDA, as
adjusted, to net income/loss, which is its nearest
comparable GAAP financial measure. However, because EBITDA,
as adjusted, is not based on any standardized methodology
prescribed by GAAP, it is not necessarily comparable to
similar measures presented by other companies. The Company
included EBITDA, as adjusted, in the press release because
it believes that it uses this measure as an internal
benchmark against certain performance objectives and to
provide investors and creditors additional information in
assessing the Company's business in comparison to industry
and other market competitive standards.
SIGNATURE
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 hereunto duly
authorized.
TORCH OFFSHORE, INC.
By: /s/ ROBERT E. FULTON
Date: May 13, 2004 -------------------------
Robert E. Fulton
Chief Financial Officer
INDEX TO EXHIBITS
Exhibit No. Description
----------- -----------
99.1 Torch Offshore, Inc. Press Release, dated
May 13, 2004.
EXHIBIT 99.1
NEWS RELEASE
For immediate release to:
Analysts, Financial Community, Media
Contact: Bob Fulton (1) 504-367-7030
Bradley Lowe (1) 504-367-7030
Torch Offshore Announces 2004 First Quarter Earnings
New Orleans, Louisiana USA, May 13, 2004
FIRST QUARTER RESULTS
Torch Offshore, Inc. (NASDAQ: TORC) (the "Company")
announced today that revenues for the quarter ended March
31, 2004 were $11.8 million, a decrease of 30.5 percent
compared to revenues of $17.0 million for the first quarter
of 2003. Gross profit (revenues less cost of sales) for the
first quarter of 2004 was a deficit of $1.4 million compared
to the first quarter 2003 gross profit of $3.3 million. The
first quarter 2004 net loss was $5.3 million, or $0.42 per
diluted share. Net income in the first quarter of 2003 was
$0.1 million, or $0.01 per diluted share.
Lyle G. Stockstill, Torch Offshore, Inc. Chairman and Chief
Executive Officer, commented, "The first quarter of 2004
turned out exactly as we had expected given the market
conditions and seasonality of our business. However, as we
turn the corner into the second quarter and the construction
season, we are beginning to see an increase in our workload.
For example, in April 2004 our vessels worked 172 revenue
days and we expect increasing utilization for the remainder
of the second quarter. The Midnight Wrangler will be under
contract through June 2004 and the Midnight Hunter has
contracted work into July 2004. In addition, we have begun
preparation for the Marathon Alba project in Africa which
will utilize the Midnight Brave and Midnight Carrier for a
five month period."
Stockstill added, "As for the Midnight Express conversion,
we expect that the vessel will be leaving the shipyard by
the end of the month for its DP-2 sea trials in the North
Atlantic Ocean. The vessel is scheduled to then travel to
Amsterdam for installation of the patented pipelay system
and the 500-ton crane before returning to the Gulf of Mexico
for final outfitting and installation of the pipe handling
system. The sea trials on the pipelay system are expected to
occur in the latter half of the third quarter of 2004. As we
have previously announced, we have begun contract
negotiations for the first pipelay project for the Midnight
Express. These negotiations are continuing, and we will
announce further details once the contract is finalized. In
addition, we are pursuing several other opportunities for
work with the vessel in the fourth quarter of 2004 and early
2005."
As of March 31, 2004, the Company has a working capital
deficit position primarily resulting from the current
classification of the Midnight Express Finance Facility.
This position places pressure on the Company's liquidity
management and could impact the Company's operations and
future business plans. Management continues to believe that
the Company has the ability to sustain operations and meet
its financial commitments through effective management of
its operations and the available liquidity provided by its
credit facilities. However, if the Company incurs
significant losses or if the Company's ability to access its
credit facilities is curtailed, the Company's ability to
continue to manage its liquidity needs and its operating and
other financial commitments may be jeopardized in the
future.
CONFERENCE CALL
A conference call will be held at 10:00 a.m. Central Time on
Thursday, May 13, 2004. To participate by telephone, United
States callers can dial (800) 901-5247 and international
callers can dial (617) 786-4501 ten to fifteen minutes prior
to the starting time. The conference ID for all callers is
51128938. The conference call will also be webcast live on
the Internet through the Investor Relations page on the
Company's web site, www.torchinc.com.
The call will be available for replay beginning at 1:00 p.m.
(Central Time) on Thursday, May 13, 2004 and ending at
midnight (Central Time) on Wednesday, May 19, 2004. For
callers in the United States, the toll-free number for the
replay is (888) 286-8010. For international callers, the
number is (617) 801-6888. The conference ID for all callers
for the replay is 93777322. All individuals listening to the
conference call or the replay are reminded that all
conference call material is copyrighted by Torch Offshore,
Inc. and cannot be recorded or rebroadcast without Torch
Offshore, Inc.'s express written consent.
Established in 1978, Torch Offshore, Inc. is involved in
offshore pipeline installation and subsea construction for
the oil and natural gas industry. Torch Offshore, Inc. is
expanding beyond its established shallow water niche market
in order to serve the industry's worldwide growing needs in
the deep waters.
Any statements made in this news release, other than those
of historical fact, about an action, event or development,
which the Company hopes, expects, believes or anticipates
may or will occur in the future, are forward-looking
statements under the Private Securities Litigation Act of
1995. The forward-looking statements in this news release
include statements about our second quarter 2004 workload,
upcoming work for the Midnight Wrangler and Midnight Hunter,
utilization of the Midnight Brave and Midnight Carrier in
Africa on the Marathon Alba project, the timing of the
completion of the conversion of the Midnight Express,
contract negotiations and future work for the Midnight
Express, and management's belief about the Company's ability
to sustain operations and meet its financial commitments.
Such statements are subject to various assumptions, risks
and uncertainties, which are specifically described in the
Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2003 filed with the Securities and
Exchange Commission, as well as other factors that may not
be within the Company's control, including, specifically,
oil and natural gas commodity prices, weather conditions and
offshore construction activity levels. Although the Company
believes its expectations are based on reasonable
assumptions, it gives no assurance that the Company's
assumptions and projections will prove to be correct. Actual
results may differ materially from those projected.
PR 04-012
# # #
TORCH OFFSHORE, INC.
Statements of Operations (Unaudited)
(in thousands, except per share data)
Three Months Ended
March 31,
------------------
2004 2003
---- ----
Revenues $11,842 $17,029
Cost of revenues:
Cost of sales 13,244 13,745
Depreciation and
amortization 2,109 1,827
General and admin-
istrative expenses 1,615 1,355
Other operating
expense 160 -
------- -------
Total cost of
revenues 17,128 16,927
------- -------
Operating income(loss) (5,286) 102
------- -------
Other income:
Interest income - 1
------- -------
Total other income - 1
------- -------
Income (loss) before
income taxes (5,286) 103
Income tax expense - (36)
------- -------
Net income (loss) $(5,286) $ 67
======= =======
Net income (loss) per
common share:
Basic $ (0.42) $ 0.01
======= =======
Diluted $ (0.42) $ 0.01
======= =======
Weighted average shares
of common stock outstanding:
Basic 12,639 12,635
======= =======
Diluted 12,639 12,641
======= =======
Other data:
EBITDA (A), (B) $(3,177) 1,929
======= =======
(A) The Company calculates EBITDA as earnings before net
interest, income taxes, depreciation and amortization and
certain other vessel charges. Please see Consolidated
Balance Sheet and Other Information included in this news
release for a reconciliation of EBITDA to net income/loss.
EBITDA is presented here to provide additional information
about our operations. EBITDA is not a calculation based on
generally accepted accounting principles (GAAP) and should
not be considered as an alternative to net income/loss, as
an indicator of our operating performance or as an
alternative to cash flow as a better measure of liquidity.
In addition, our EBITDA calculation may not be comparable
to similarly titled measures of other companies.
TORCH OFFSHORE, INC.
Condensed Balance Sheet and Other Information (Unaudited)
(in thousands, except per share data)
March 31, December 31,
2004 2003
----------- ------------
Assets
Current assets $ 13,088 $ 24,081
Property, net 158,706 143,266
Other assets 2,253 2,559
-------- --------
Total assets $174,047 $169,906
======== ========
Liabilities and Stockholders' Equity
Accounts payable - trade $ 13,483 $ 15,148
Accrued expenses and other 6,750 7,707
Midnight Express Finance Facility 59,884 45,639
Current portion of long-term debt 3,376 3,396
Receivable line of credit 5,864 7,227
-------- --------
Total current liabilities 89,357 79,117
Long-term debt, less current portion 19,211 20,057
Stockholders' equity 65,479 70,732
-------- --------
Total liabilities and
stockholders' equity $174,047 $169,906
======== ========
Three Months Ended
March 31,
------------------
2004 2003
---- ----
EBITDA Reconciliation (B):
Net income (loss) $(5,286) $ 67
Income tax expense - 36
Interest income - (1)
Depreciation and amortization 2,109 1,827
------- -------
EBITDA $(3,177) $ 1,929
======= =======
(B) We have disclosed EBITDA, a non-GAAP measure determined
as described in item (A) above, because we use this measure
as an internal benchmark against certain performance
objectives and to provide investors and creditors additional
information in assessing our business in comparison to
industry and other market competitive standards.