Trico Marine Services announced its financial results for the first quarter of 2010 of revenues of $96 million and adjusted EBITDA of negative $1.1 million, compared to prior quarter revenues of $151 million and adjusted EBITDA of $3.5 million.
Chairman and Chief Executive Officer, Joseph S. Compofelice, commented, "As we have previously indicated, the results of our first quarter reflect the seasonal weakness in our business associated with the winter months especially in the North Sea. Looking ahead to the remainder of 2010, we are encouraged by some positive signs in the markets in which we operate, including increased utilization in our subsea segments and a quarter over quarter increase in our tender book."
The primary reason for the reduction in revenues was lower utilization in our Subsea Services and Subsea Protection and Trenching divisions, including but not limited to curtailed spending for most of the quarter on one of three vessels by our largest Subsea Services customer. Despite a reduction in revenues by $55 million, proactive management of costs, especially in terms of vessels chartered in at DeepOcean, mitigated over 90% of this decrease.
The Company continued to reduce its exposure to the North Sea spot market Towing and Supply sector with the sale of the Northern Corona in April with proceeds of $16 million which was used to pay down debt.
We are encouraged by recent market developments in our Subsea Services segments where 80% of the days in the second quarter are currently under contract with opportunities for increased utilization in the remainder of the quarter.
Our backlog is currently over $500 million, of which over $400 million is in our Subsea Services segments, and the tender book in our Subsea Services segments is approximately $2 billion. In addition, the previously announced contract awards below reflect our cautious optimism about the remainder of the year as well as our increased diversification into the offshore renewables market:
In addition to the awards above, DeepOcean was recently awarded two additional frame agreements for work in multiple years with major energy companies for inspection, maintenance, repair and survey services in the North Sea, with work commencing in 2010 and 2011.
At the end of the first quarter, the Company had $32 million in cash and $737 million in total debt. As previously disclosed, the Company's forecasted cash and available credit capacity are not expected to be sufficient to meet its commitments as they come due over the next twelve months and the Company does not expect that it will be able to remain in compliance with its existing debt covenants.
The Company is pursuing measures to improve liquidity and its capital structure and is now in active discussions with various parties regarding potential transactions, including replacing its current U.S. Credit Facility. The Company is also in active discussions regarding modifications to the existing 8.125% debentures, including, but not limited to, deferral of amortization payments. The Company may need to, or as a result of those discussions, may choose to, avail itself of the 30-day grace period with respect to the approximately $8 million interest payment due on May 15, 2010 on its 8.125% debentures. The Company's use of the grace period would not constitute an event of default under the indenture governing the 8.125% debentures.
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