TransCoastal Announces Anticipated Third Quarter Loss Including a $1.7 Million Special Charge
HOUSTON--(BUSINESS WIRE)--Oct. 8, 1999--TransCoastal Marine Services, Inc. (Nasdaq:TCMS) announced today that it anticipates it will report a third quarter loss of $5.25 million to $5.75 million. The loss includes a special pretax charge of approximately $1.7 million related to restructuring in the Company's Fabrication & Offshore Group. Included in this charge are severance costs for management reductions and expenses related to facilities reductions. Third quarter results were also impacted by reduced revenues in the Company's Pipeline & Marine and Fabrication & Offshore Groups. Intense margin pressure due to reduced activity in the marine construction markets also affected third quarter results.
Nathan M. Avery, Chairman, President and Chief Executive Officer stated, "Despite large gains in our customers' cash flows due to sharply increased crude oil and natural gas prices, meaningful spending increases have not yet materialized. This is consistent with the historical lag in oilfield capital spending following increases in oil and gas prices. However, we are encouraged that requests for proposals have increased significantly and that our backlog of signed contracts still remains at approximately $40 million." He added, "Our record backlog of bids outstanding but not yet awarded continues to grow. The inquiry rate from potential customers, already at a high level, is accelerating. We are currently pursuing a number of large contract opportunities."
Mr. Avery further noted, "Conversations with our customers indicate capital spending will increase significantly in 2000, if not earlier. Although we cannot predict the exact timing of the recovery, we are confident that oilfield spending will soon strengthen dramatically. While we have retained the core of our workforce, our SG&A costs stand at an annualized rate of approximately $10.8 million. This historically low level of costs along with our third quarter charges represents a reduction of over $5.0 million from 1998 levels and positions us for rapidly increasing profit margins with any recovery in our markets." |
