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Gold/Mining/Energy : Trico Marine Services (TMAR) -- Ignore unavailable to you. Want to Upgrade?

To: Grommit who wrote (786)	8/27/1998 10:24:00 AM
From: D.J.Smyth	Read Replies (1) \| Respond to of 1153

what is the downside? they can dump the ships tomorrow for $12 net, at the lowest $9 at a fire sale. who's arguing this point?

To: Grommit who wrote (786)	8/27/1998 11:44:00 AM
From: D.J.Smyth	Read Replies (1) \| Respond to of 1153

jefferies estimated $.17 in the 4th. my model, using past statements and conversations with green yields higher earnings. rev - (operating expense +depreciation+gen admin.+amortization of inspec) = operating income operating income - (tax rate + interest expense) = net earnings. plug in $5K a day boat rates at 65% utilization yields $15.1 million $14.5 a day boat rates at 96% utilization yields $21.2 million $6.4 a day boat rates at 100% utilization (all lift boats will be active in the 4th) yields $3.45 mill $2081 crew boat day rates at 90% utilization yields $3.7 million total revenue = $43.67 million operating expenses of $12.28 million (28% - could be as low as 25%, down from 33% as 60% of boat use is labor related and with 65% utilization, tmar won't be running a 300 man crew 24 hours a day - as they are currently doing - to service non operative boats). labor is more than 60% of the current operating expense; you cut this back, say 20%, and you drop total operating expenses by about 5% to 6% from the current level of 34%, or to 28% to 29% minus amortization costs of $2.45 million minus depreciation costs of $6.50 million minus gen admin of $2.45 net operating income is $20.2 minus tax rate of 34% (which could be as low as 32% again as it was this past quarter) minus interest expense of $6.42 you arrive at net earnings on a diluted basis of approximately $.33 next year, the marine inspections costs will be about 75% less according to TMAR. this reduction alone will add $.07 per quarter to earnings. so jefferies use of $5500 day rates for 1999 doesn't well yield $1.29 for all of 1999. even tmar admits they don't know what model McKenzie and Butz are using to arrive at their numbers. currently in my mind this isn't a question of boat rate discrepancy, it's a question of whose earnings model is "more" accurate. several analysts numbers do not currently jive with jefferies. bottom line: earnings for 1999 should be closer to $1.60 or greater for 1999 with supply boat rates around $5500 a day. tmar also mentioned that they could get $15 a share net out of their fleet if sold properly over time. they said a "fire sale price" would be closer to $12, not $9, as Jefferies has indicated in their report.