SEACOR Marine Holdings Inc

General

The Company’s ongoing liquidity requirements arise primarily from working capital needs, capital commitments and its obligations to service outstanding debt and comply with covenants under its debt facilities. The Company may use its liquidity to fund capital expenditures, make acquisitions or to make other investments. Sources of liquidity are cash balances, cash flows from operations, and sales under the Company’s ATM Program, which has approximately $24.9 million of authority remaining for sales. From time to time, the Company may secure additional liquidity through asset sales or the issuance of debt, shares of Common Stock or common stock of its subsidiaries, preferred stock or a combination thereof.

As of December 31, 2023, the Company had unfunded capital commitments of $15.5 million for miscellaneous vessel equipment, including hybrid battery power systems. Of the unfunded capital commitments, $13.5 million is payable during 2024 and $2.0 million is payable during 2025. In addition to the unfunded capital commitments above, the Company has indefinitely deferred an additional $9.2 million of capital commitments with respect to one FSV.

As of December 31, 2023, the Company had outstanding debt of $315.9 million, net of debt discount and issue costs. The Company’s contractual long-term debt maturities as of December 31, 2023 are as follows (in thousands):

As of December 31, 2023, the Company held balances of cash, cash equivalents and restricted cash totaling $84.1 million. As of December 31, 2022, the Company held balances of cash, cash equivalents and restricted cash totaling $43.0 million.

For the years ended December 31, the following is a summary of the Company’s cash flows (in thousands):

Operating Activities

Cash flows provided by operating activities increased by $23.6 million in 2023 compared with 2022 primarily due to increases in day rates, which was partially offset by working capital timing. For the years ended December 31, the components of cash flows provided by (used in) continuing operating activities were as follows (in thousands):

(1)

During 2023 and 2022, the Company had no capitalized interest. During 2021, capitalized interest included in purchases of property and equipment from continuing operations was $0.3 million.

For a detailed discussion of the Company’s financial results for the reported periods, see “Consolidated Results of Operations” included above. Changes in operating assets and liabilities before interest and income taxes are the result of the Company’s working capital requirements.

Investing Activities

During 2023, net cash provided by investing activities was $49.1 million primarily as a result of the following:

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capital expenditures were $10.6 million;

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the Company sold one liftboat, classified as held for sale, three liftboats and one specialty vessel, previously removed from service, one FSV and other equipment, previously classified as held for sale, as well as other equipment not previously classified as such, for net cash proceeds of $44.7 million, after transaction costs, and a gain of $21.1 million;

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the Company received $15.0 million of principal payments under that certain MexMar Third A&R Facility Agreement, dated September 29, 2022. The facility has now been paid in full.

During 2022, net cash provided by investing activities was $57.8 million primarily as a result of the following:

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capital expenditures were $0.5 million;

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the Company sold one FSV, one liftboat previously removed from service, office space and other equipment for net cash proceeds of $6.7 million, after transaction costs, and a gain of $2.2 million;

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the Company received $0.5 million from investments in, and advances to, its 50% or less owned companies for principal payments on note receivables;

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the Company received $66.0 million of cash proceeds from the sale of investments in, and advances to, its 50% or less owned companies in the Framework Agreement Transactions; and

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the Company deployed $28.8 million to acquire the loans under the MexMar Third A&R Facility Agreement and received $13.8 million of principal payments under such loan.

During 2021, net cash provided by investing activities was $71.8 million primarily as a result of the following:

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capital expenditures were $7.0 million. Equipment deliveries during the period included one PSVs through construction;

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the Company sold three FSVs, one PSV and set off debt payments with hull and machinery insurance proceeds from the SEACOR Power of $25.0 million, for a total of $30.1 million;

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the Company completed the sale of Windcat Workboats for net proceeds of $38.7 million ($42.2 million cash, less $3.5 million cash held at Windcat Workboats that was included in the assets purchased by the buyer);

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the Company made investments in, and advances to, its 50% or less owned companies of $3.0 million;

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the Company received a distribution from its MEXMAR Offshore joint venture in the amount of $12.0 million of which $9.4 million was in excess of the Company’s investment balance of $2.6 million;

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the Company received $3.3 million from investments in, and advances to, its 50% or less owned companies for principal payments on note receivables; and

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the Company received $0.2 million as part of an asset acquisition of a 50% or less owned company.

Financing Activities

During 2023, net cash used by financing activities was $17.0 million primarily as a result of the following:

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The Company made scheduled payments on long-term debt and other obligations of $29.2 million;

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the Company made payments for debt extinguishment of $131.6 million;

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the Company made payments for debt extinguishment costs of $1.8 million;

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the Company received proceeds from the issuance of long-term debt of $148.5 million;

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the Company made payments on finance leases of $0.5 million;

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the Company made payments on tax withholdings for restricted stock vesting and director share awards of $2.4 million; and

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the Company received net proceeds of less than $0.1 million from the issuance and sale of Common Stock through the ATM Program.

During 2022, net cash used by financing activities was $41.4 million primarily as a result of the following:

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The Company made scheduled payments on long-term debt and other obligations of $38.2 million;

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the Company made payments for debt extinguishment costs of $2.3 million;

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the Company received $0.2 million proceeds from the exercise of stock options;

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the Company made payments on finance leases of $0.4 million; and

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the Company made payments on tax withholdings for restricted stock vesting and director share awards of $0.7 million.

During 2021, net cash used by financing activities was $78.9 million primarily as a result of the following:

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The Company made scheduled payments on long-term debt and other obligations of $78.1 million; and

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the Company made payments on debt extinguishment costs of $0.8 million; and

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the Company made payments on tax withholdings for restricted stock vesting and director share awards of $0.3 million.

Short and Long-Term Liquidity Requirements and Outlook

The Company believes that a combination of cash balances on hand, cash generated from operating activities and access to the credit and capital markets, including the $24.9 million in remaining capacity under the ATM Program, will provide sufficient liquidity to meet its obligations, including to support its capital expenditures program, working capital needs, debt service requirements and covenant compliance over the short to long term. The Company continually evaluates possible acquisitions and dispositions of certain businesses and assets. The Company’s sources of liquidity may be impacted by the general condition of the markets in which it operates and the broader economy as a whole, which may limit its access to or the availability of the credit and capital markets on acceptable terms. Management continuously monitors the Company’s liquidity and compliance with covenants in its credit facilities.

Future Cash Requirements

The Company’s primary future cash requirements will be to fund operations, debt service, capital expenditures, employee retirement benefit plans, and lease payment obligations. In addition, the Company may use cash in the future to make strategic acquisitions or investments. Specifically, the Company expects its primary cash requirements for fiscal year 2024 to be as follows:

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Debt service — We expect to make principal and interest payments of approximately $59.9 million during fiscal year 2024 under our currently outstanding debt facilities based on interest rates at year end.

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Capital expenditures — At this time, we expect capital expenditures of approximately $15.5 million for the installation of hybrid battery power systems and other capital expenditures.

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Employee retirement benefit plans — We estimate we will make payments under our retirement benefit plans of approximately $1.6 million during fiscal year 2024.

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Lease payments — We expect to make lease payments of approximately $1.9 million for our operating and finance leases during fiscal year 2024 under our effective leases as of December 31, 2023.

In addition to the matters identified above, in the ordinary course of business, the Company may be involved in litigation, claims, government inquiries, investigations and proceedings relating to commercial, employment, environmental and regulatory matters. An unfavorable resolution in this or other matters could have a material adverse effect on the Company's future cash requirements.