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):
November 13, 2003 (November 13, 2003)
___________________
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
November 13, 2003.
ITEM 12. RESULT OF OPERATIONS AND FINANCIAL CONDITION.
On November 13, 2003, Torch Offshore, Inc. (the "Company")
issued a press release announcing operating results for the
quarter ended September 30, 2003. 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 for the three- and nine-
month period ended September 30, 2003 in the press release,
which is a "non-GAAP" financial measure under Regulation
G. The components of EBITDA 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 to net loss, which is its nearest comparable GAAP
financial measure. However, because EBITDA 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 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: November 13, 2003 ------------------------
Robert E. Fulton
Chief Financial Officer
INDEX TO EXHIBITS
Exhibit No. Description
----------- -----------
99.1 Torch Offshore, Inc. Press Release, dated
November 13, 2003.
EXHIBIT 99.1
NEWS RELEASE
For immediate release to:
Analysts, Financial Community, Media
Contact: Bob Fulton (1)504-367-7030 b.fulton@torchinc.com
Bradley Lowe (1)504-367-7030 b.lowe@torchinc.com
Torch Offshore Announces 2003 Third Quarter Results
New Orleans, Louisiana USA, November 13, 2003
THIRD QUARTER RESULTS
Torch Offshore, Inc. (NASDAQ: TORC) (the "Company")
announced today that revenues for the quarter ended
September 30, 2003 were $15.3 million, an increase of 10.3
percent compared to revenues of $13.8 million for the third
quarter of 2002. Gross profit (revenues less cost of sales)
for the third quarter of 2003 was $1.5 million or 9.8
percent of revenues compared to the third quarter 2002 gross
profit of $2.6 million or 18.7 percent of revenues. Third
quarter 2003 gross profit was adversely impacted by a $0.7
million ($0.5 million after tax effect, or $0.04 per diluted
share) charge to cost of sales resulting from additional
costs incurred related to the termination of the Midnight
Hunter charter. The third quarter 2003 net loss was $1.4
million, or $0.11 per diluted share, compared to the net
loss in the third quarter of 2002 which was $0.3 million, or
$0.02 per diluted share.
Lyle G. Stockstill, Torch Offshore, Inc. Chairman and Chief
Executive Officer, commented, "The third quarter of 2003 was
a period of contrasts. We experienced one of the toughest
months in the history of the Company in August only to
follow that up with one of our best months ever as our
vessels worked 235 revenue days in September. Overall,
although we have seen a slight improvement in work levels
since the low levels in July and August, we are continuing
to experience relatively weak activity in the Gulf of
Mexico."
"As for the deepwater operations of Torch Offshore, the
third quarter of 2003 marked the introduction of the
Midnight Wrangler to the active fleet. The vessel completed
a variety of jobs in the quarter, including subsea
construction and pipelay work. The vessel has performed
admirably thus far and at the level we expected."
NINE-MONTH RESULTS
For the nine months of 2003, revenues increased 6.2 percent
to $46.2 million generating a gross profit of $6.2 million
or 13.3 percent of revenues, compared to the year-ago period
revenues of $43.5 million that produced a gross profit of
$8.8 million, or 20.2 percent of revenues. Included in cost
of sales in the first nine months of 2003 was $2.1 million
($1.3 million after tax effect, or $0.11 per diluted share)
of costs related to the termination of the Midnight Hunter
charter. The net loss for the first nine months of 2003
totaled $2.5 million, or $0.20 per diluted share, compared
to the net loss in the first nine months of 2002 which was
$0.1 million, or $0.01 per diluted share.
RECENT DEVELOPMENTS
The Company has been involved in an arbitration proceeding
in London regarding the termination of the charter of the
Midnight Hunter. In November 2003, the arbitrator issued a
ruling against the Company, finding that the Company was not
entitled to terminate the charter of the Midnight Hunter and
ruled in favor of the Company on the issue of breach of
contract warranty. An interim award of $2.2 million was made
in favor of Cable Shipping, Inc., the owners of the Midnight
Hunter. Further evidence is to be taken on the quantum
issue. The Company intends to appeal the arbitrator's
ruling. The Company has recorded the full amount of the
interim judgment in the financial statements as of September
30, 2003; however, the arbitrator may award further amounts
on an interim or final basis pending appeal.
CONFERENCE CALL
A conference call will be held at 10:00 a.m. (Central Time)
on Thursday, November 13, 2003. To participate by telephone,
United States callers can dial (800) 599-9795 and
international callers can dial (617) 786-2905 ten to fifteen
minutes prior to the starting time. The conference ID for
all callers is 96086993. 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, November 13, 2003 and ending at
midnight (Central Time) on Wednesday, November 19, 2003. 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 21337291. 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 deepwater operations, our
appeal of the Midnight Hunter arbitration ruling and the
capabilities of the Company's vessels. 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,
2002 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 03-019
# # #
TORCH OFFSHORE, INC.
Statements of Operations (Unaudited)
(in thousands, except per share data)
Three Months Nine Months
Ended Ended
September 30, September 30,
--------------- ---------------
2003 2002 2003 2002
------- ------- ------- -------
Revenues $15,262 $13,833 $46,167 $43,468
Cost of revenues:
Cost of sales 13,771 11,242 40,016 34,695
Depreciation and
amortization 1,983 1,842 5,632 5,633
General and admin-
istrative expenses 1,614 1,226 4,317 3,497
------- ------- ------- -------
Total cost of revenues 17,368 14,310 49,965 43,825
Operating loss (2,106) (477) (3,798) (357)
Other income (expense):
Interest expense - (38) - (93)
Interest income - 56 1 220
------- ------- ------- -------
Total other income - 18 1 127
------- ------- ------- -------
Loss before income
tax benefit (2,106) (459) (3,797) (230)
Income tax benefit 737 161 1,329 81
------- ------- ------- -------
Net loss $(1,369)$ (298) $(2,468)$ (149)
======= ======= ======= =======
Net loss per common share:
Basic $ (0.11)$ (0.02) $ (0.20)$ (0.01)
======= ======= ======= =======
Diluted $ (0.11)$ (0.02) $ (0.20)$ (0.01)
======= ======= ======= =======
Weighted average common
stock outstanding:
Basic 12,639 12,689 12,637 12,749
======= ======= ======= =======
Diluted 12,639 12,689 12,637 12,749
======= ======= ======= =======
Other data:
EBITDA (A), (B) $ (123)$ 1,365 $ 1,834 $ 5,276
======= ======= ======= =======
(A) The Company calculates EBITDA as earnings before net
interest, income taxes, depreciation and amortization.
Please see Condensed Balance Sheet and Other Information
included in this news release for a reconciliation of
EBITDA to net 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, 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)
September 30, December 31,
2003 2002
------------- -------------
Assets
Current assets $ 25,714 $ 31,373
Property, net 134,633 67,561
Other assets 2,904 2,970
------------- -------------
Total assets $ 163,251 $ 101,904
============= =============
Liabilities and
Stockholders' Equity
Accounts payable - trade $ 13,286 $ 7,677
Accrued expenses and other 8,212 7,393
Midnight Express Finance Facility 37,795 -
Current portion of long-term debt 2,866 14
Receivable line of credit 7,440 4,271
------------- -------------
Total current liabilities 69,599 19,355
Deferred income taxes 1,307 2,636
Long-term debt, less
current portion 14,888 46
Stockholders' equity 77,457 79,867
------------- -------------
Total liabilities and
stockholders' equity $ 163,251 $ 101,904
============= =============
Three Months Nine Months
Ended Ended
September 30, September 30,
------------- --------------
2003 2002 2003 2002
------- ------ ------- ------
EBITDA Reconciliation(B):
Net loss $(1,369)$ (298) $(2,468) $ (149)
Income tax benefit (737) (161) (1,329) (81)
Other income - (18) (1) (127)
Depreciation and
amortization 1,983 1,842 5,632 5,633
------- ------ ------- ------
EBITDA $ (123)$1,365 $ 1,834 $5,276
======= ====== ======= ======
(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.