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華爾街日報Health Check: How Prudently Does SEACOR Marine Holdings (NYSE:SMHI) Use Debt?
Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of permanent loss is the risk I worry about... and every practical investor I know worries about.' It's only natural to consider a company's balance sheet when you examine how risky it is, since debt is often involved when a business collapses. As with many other companies SEACOR Marine Holdings Inc. (NYSE:SMHI) makes use of debt. But the more important question is: how much risk is that debt creating?
When Is Debt Dangerous?
Debt and other liabilities become risky for a business when it cannot easily fulfill those obligations, either with free cash flow or by raising capital at an attractive price. In the worst case scenario, a company can go bankrupt if it cannot pay its creditors. However, a more frequent (but still costly) occurrence is where a company must issue shares at bargain-basement prices, permanently diluting shareholders, just to shore up its balance sheet. Having said that, the most common situation is where a company manages its debt reasonably well - and to its own advantage. When we think about a company's use of debt, we first look at cash and debt together.
What Is SEACOR Marine Holdings's Net Debt?
The image below, which you can click on for greater detail, shows that at September 2025 SEACOR Marine Holdings had debt of US$341.9m, up from US$300.9m in one year. However, because it has a cash reserve of US$91.0m, its net debt is less, at about US$250.9m.
A Look At SEACOR Marine Holdings' Liabilities
According to the last reported balance sheet, SEACOR Marine Holdings had liabilities of US$81.2m due within 12 months, and liabilities of US$333.7m due beyond 12 months. Offsetting these obligations, it had cash of US$91.0m as well as receivables valued at US$80.0m due within 12 months. So its liabilities outweigh the sum of its cash and (near-term) receivables by US$243.9m.
Given this deficit is actually higher than the company's market capitalization of US$175.3m, we think shareholders really should watch SEACOR Marine Holdings's debt levels, like a parent watching their child ride a bike for the first time. Hypothetically, extremely heavy dilution would be required if the company were forced to pay down its liabilities by raising capital at the current share price. The balance sheet is clearly the area to focus on when you are analysing debt. But ultimately the future profitability of the business will decide if SEACOR Marine Holdings can strengthen its balance sheet over time. So if you're focused on the future you can check out this free report showing analyst profit forecasts.
Check out our latest analysis for SEACOR Marine Holdings
Over 12 months, SEACOR Marine Holdings made a loss at the EBIT level, and saw its revenue drop to US$245m, which is a fall of 11%. We would much prefer see growth.
Caveat Emptor
While SEACOR Marine Holdings's falling revenue is about as heartwarming as a wet blanket, arguably its earnings before interest and tax (EBIT) loss is even less appealing. Indeed, it lost a very considerable US$37m at the EBIT level. Considering that alongside the liabilities mentioned above make us nervous about the company. It would need to improve its operations quickly for us to be interested in it. Not least because it burned through US$59m in negative free cash flow over the last year. So suffice it to say we consider the stock to be risky. When analysing debt levels, the balance sheet is the obvious place to start. But ultimately, every company can contain risks that exist outside of the balance sheet. For example SEACOR Marine Holdings has 3 warning signs (and 1 which can't be ignored) we think you should know about.
If, after all that, you're more interested in a fast growing company with a rock-solid balance sheet, then check out our list of net cash growth stocks without delay.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.