HOUSTON, Nov. 7, 2005 (PRIMEZONE) -- GulfMark Offshore, Inc. (Nasdaq:GMRK) today announced quarterly results reflecting records for quarterly revenue of $53.0 million and net income of $13.0 million, or $0.63 per share (diluted). This compares to a net loss of ($0.2) million, or ($0.01) per share (diluted) on revenue of $34.1 million for the third quarter of 2004. Operating income of $18.5 million for the third quarter of 2005 was the highest in the GulfMark's history.
The third quarter 2005 financial results, when compared to the same period in 2004, continue to reflect a dramatic turnaround in the market. The 56% increase in revenue from $34.1 million to $53.0 million, and significant increase in operating income from $5.7 million to $18.5 million, quarter over quarter versus 2004, are primarily the result of: (1) increased day rates in all regions; (2) the addition of new vessels including the full year effect of the Austral Abrolhos delivered in September of 2004, the Highland Citadel delivered late in 2004, and the addition of the Titan and Coloso late in the second quarter of 2005; and (3) improved vessel utilization. Improved day rates, primarily in the North Sea, was the single most significant factor comprising $10.8 million or 57.1% of the increase. Capacity increases, with the addition of the new vessels beginning in the third quarter of 2004 and second quarter of 2005, accounted for $6.1 million, or 32.3 % of the increase with the balance related to increased utilization of $2.0 million, primarily in the North Sea and Americas regions.
Mr. Bruce Streeter, President and COO of the company commented: "Our results for the third quarter reflect not only the strength of the marketplaces where we work, but also the strategic decisions that we as a company have made. This is particularly true for the North Sea where we have benefited from the strengthening conditions in that market. These conditions have: (1) allowed the vessels from our 2000-2003 new construction program to achieve high utilization and day rates; (2) let our existing vessels obtain rollover term contracts at much stronger rates; and (3) enable our vessels in the "spot market" to take advantage of a relatively robust market. Our contract outlook continues to improve with approximately 90% contract cover for the remainder of 2005 and more than 50% already secured for 2006. This should not only help provide earnings stability as we enter the traditionally weaker winter period, but also creates a strong cash flow base for next year without sacrificing the opportunity for additional growth as the year develops. In Southeast Asia, the high utilization is indicative of strengthening market demand in the area with improving average day rates reflecting our fleet mix and the higher day rate levels that several of our vessels can obtain. In the Americas, the average dayrate is lower in comparison to the year ago period, but that is as a result of the change in the mix of equipment in the area with the third quarter being the first full operating quarter for our new Mexican venture which includes somewhat smaller vessels.
Very late in the third quarter we took delivery of the Sea Intrepid, the first of two China newbuild vessels. We are very pleased with the timing of the delivery as the vessel is already working ahead of when we expected. Progress on the second China new build continues and this vessel, along with the AKER 09 vessel also under construction, is on schedule. We believe fleet additions are important as demand has increased and continued to change around the world. As we discussed in previous quarters, we have seen improved demand for vessel services in an increasing number of locations. Several recent notable events involving expansion of operations were: (1) this quarter was the first full quarter in Mexico, where the start of operations has gone well; (2) the drilling support program in the Black Sea has continued; (3) an existing client has sent one of our vessels to Australia; and (4) subsequent to the end of the quarter, a major oil company awarded us a two year plus options contract supporting deepwater work off Egypt. This fixture is important not only because of the vessels involved and the revenue generated, but because it better positions us in the Eastern Mediterranean and Black Sea area, a locale of greater focus and interest on the part of our customers. Our employees have responded and done an excellent job in working to increase fleet usage, support a wider array of vessel locations, and maintain reliability and safety in an environment of expanding vessel operations."
At September 2005 the company had working capital of $39.9 million, including $17.9 million in cash and cash equivalents. The company had total debt of $242.9 million, consisting of $159.4 million of 7.75% senior notes, $14.1 million related to certain vessel mortgages, $0.3 million related to the Aker Joint Venture capital contribution (construction of the Aker PSV09 vessel), and $69.1 million under our revolving credit facilities.
GulfMark will hold a conference call to discuss the earnings with analysts, investors and other interested parties at 9:00 A.M. EST/8:00 A.M. CST on Tuesday, November 8, 2005. Those interested in participating in the conference call should call 800/473-8796 (816/650-0765, if outside the U.S. and Canada) 5 minutes in advance of the start time and ask for the GulfMark conference. The conference call will also be available via audio web cast at http://www.vcall.com. A telephonic replay of the conference call will be available for 4 days, starting approximately 1 hour after the completion of the call, and can be accessed by dialing 800/252-6030 (international calls should use 402/220-2491) and entering access code 45643130.
GulfMark Offshore, Inc. provides marine transportation services to the energy industry through a fleet of fifty-eight (58) offshore support vessels, primarily in the North Sea, offshore Southeast Asia, and the Americas.
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which involve known and unknown risk, uncertainties and other factors. Among the factors that could cause actual results to differ materially are: price of oil and gas and their effect on industry conditions; industry volatility; fluctuations in the size of the offshore marine vessel fleet in areas where the Company operates; changes in competitive factors; delay or cost overruns on construction projects and other material factors that are described from time to time in the Company's filings with the SEC. Consequently, the forward-looking statements contained herein should not be regarded as representations that the projected outcomes can or will be achieved.
Statement of Operations (unaudited)
-----------------------------------
Three Months Ended
------------------------------
Sept. 30, June 30, Sept. 30,
2005 2005 2004
------- ------- -------
Revenues $53,048 $51,340 $34,092
Direct operating expenses 20,044 21,036 16,446
Drydock expense 1,497 3,610 1,249
Bareboat charter expense 1,056 1,382 --
General and administrative expenses 4,684 4,987 4,322
Depreciation expense 7,260 7,256 6,376
------- ------- -------
Operating Income (Loss) 18,507 13,069 5,699
Interest expense (4,657) (4,763) (4,281)
Interest income 78 183 46
Debt refinancing costs -- -- (6,524)
Foreign currency gain (loss)
and other 162 568 2,757
------- ------- -------
Income (loss) before income taxes
and cumulative effect of change
in accounting principle 14,090 9,057 (2,303)
Income tax (provision) benefit (1,058) (803) 2,091
------- ------- -------
Income (loss) before cumulative
effect of change in accounting
principle 13,032 8,254 (212)
Cumulative effect on prior years
of change in accounting principle
- net of $773 related tax effect -- -- --
------- ------- -------
NET INCOME (LOSS) $13,032 $ 8,254 $ (212)
======= ======= =======
Earnings per share:
-------------------
Basic - before cumulative effect
of change in an accounting
principle $ 0.65 $ 0.41 $ (0.01)
Cumulative effect on prior years
of change in accounting principle -- -- --
------- ------- -------
Net income (loss) $ 0.65 $ 0.41 $ (0.01)
Diluted - before cumulative effect
of change in accounting
principle $ 0.63 $ 0.40 $ (0.01)
Cumulative effect on prior years
of change in accounting principle -- -- --
------- ------- -------
Net income (loss) $ 0.63 $ 0.40 $ (0.01)
Weighted average common shares 20,046 20,041 19,940
Weighted average diluted
common shares 20,723 20,639 19,940
Operating Statistics
-------------------- Three Months Ended
------------------------------
Sept. 30, June 30, Sept. 30,
2005 2005 2004
------- ------- -------
Revenues by Region (000's)
--------------------------
North Sea based fleet $42,187 $40,469 $24,950
Southeast Asia based fleet 4,613 4,790 3,868
Americas based fleet 6,248 6,081 5,274
Rates Per Day Worked
--------------------
North Sea based fleet $16,149 $16,068 $11,301
Southeast Asia based fleet 5,808 5,679 5,203
Americas based fleet 10,294 13,382 12,493
Overall Utilization
-------------------
North Sea based fleet 93.2% 90.8% 85.8%
Southeast Asia based fleet 88.0% 94.4% 76.0%
Americas based fleet 98.0% 89.3% 84.2%
Average Owned/Chartered Vessels
-------------------------------
North Sea based fleet 31.0 31.0 27.7
Southeast Asia based fleet 10.0 10.0 11.4
Americas based fleet 7.0 5.7 5.5
------- ------- -------
Total 48.0 46.7 44.6
======= ======= =======
Drydock Activity(a)
-------------------
North Sea based fleet 2 4 1
Southeast Asia based fleet 2 -- 1
Americas based fleet 0 3 0
------- ------- -------
Total 4 7 2
======= ======= =======
Expenditures (000's) $ 1,497 $ 3,610 $ 1,249
======= ======= =======
At September 30,
2005 2004
---------------- ----------------
2005(c) 2006(d) 2004(c) 2005(d)
------ ------ ------ ------
Forward Contract Cover(b)
------------------------
North Sea based fleet 91.1% 60.4% 61.3% 55.5%
Southeast Asia based fleet 76.6% 9.3% 71.8% 40.2%
Americas based fleet 100.0% 92.8% 100.0% 95.7%
----- ----- ----- -----
Total 89.1% 53.4% 68.1% 56.6%
===== ===== ===== =====
(a) Represents number of completed drydocks in period.
(b) Forward contract cover represents number of days vessels are
under contract or option by customers divided by total calendar
days vessels are available for charter hire.
(c) Represents remaining period (10/1-12/31).
(d) Represents full year (1/1-12/31).
Statement of Operations (unaudited)
-----------------------------------
Nine Months Ended
------------------------
September 30,
2005 2004
--------- ---------
Revenues $ 152,454 $ 97,888
Direct operating expenses 60,236 51,987
Drydock expense 6,656 6,273
Bareboat charter expense 2,819 1,410
General and administrative expenses 14,387 10,393
Depreciation expense 21,714 19,164
--------- ---------
Operating Income (Loss) 46,642 8,661
Interest expense (14,190) (12,520)
Interest income 309 130
Debt refinancing costs -- (6,524)
Foreign currency gain (loss) and other (306) 2,449
--------- ---------
Income (loss) before income taxes and
cumulative effect of change
in accounting principle 32,455 (7,804)
Income tax (provision) benefit (2,242) 1,585
--------- ---------
Income (loss) before cumulative effect
of change in accounting principle 30,213 (6,219)
Cumulative effect on prior years of
change in accounting principle
- net of $773 related tax effect -- (7,309)
--------- ---------
NET INCOME (LOSS) $ 30,213 $ (13,528)
========= =========
Earnings per share:
---------
Basic - before cumulative effect of
change in an accounting principle $ 1.51 $ (0.31)
Cumulative effect on prior years of
change in accounting principle -- (0.37)
--------- ---------
Net income (loss) $ 1.51 $ (0.68)
Diluted - before cumulative effect
of change in accounting principle $ 1.46 $ (0.31)
Cumulative effect on prior years of
change in accounting principle -- (0.37)
--------- ---------
Net income (loss) $ 1.46 $ (0.68)
Weighted average common shares 20,028 19,938
Weighted average diluted common shares 20,699 19,938
Operating Statistics
--------------------
Nine Months Ended
------------------------
September 30,
2005 2004
Revenues by Region (000's) -------- --------
--------------------------
North Sea based fleet $121,116 $ 71,496
Southeast Asia based fleet 13,860 12,861
Americas based fleet 17,478 13,531
Rates Per Day Worked
--------------------
North Sea based fleet $ 16,152 $ 10,889
Southeast Asia based fleet 5,742 5,015
Americas based fleet 11,614 12,275
Overall Utilization
-------------------
North Sea based fleet 91.4% 79.9%
Southeast Asia based fleet 90.7% 80.1%
Americas based fleet 95.7% 90.3%
Average Owned/Chartered Vessels
-------------------------------
North Sea based fleet 30.8 29.4
Southeast Asia based fleet 10.0 12.3
Americas based fleet 5.9 4.5
-------- --------
Total 46.7 46.2
======== ========
Drydock Activity(a)
-------------------
North Sea based fleet 9 10
Southeast Asia based fleet 2 2
Americas based fleet 3 1
-------- --------
Total 14 13
======== ========
Expenditures (000's) $ 6,656 $ 6,273
======== ========
(a) Represents number of completed drydocks in period.
Balance Sheet Data (unaudited) ($000)
-------------------------------------
As of As of
September 30, December 31,
2005 2004
----------- -----------
Cash and cash equivalents $ 17,914 $ 17,529
Working capital 39,858 7,948
Vessel and equipment, net 495,128 520,574
Total assets 602,656 632,718
Long term debt 239,635 258,022
Shareholders' equity 323,227 316,157
Cash Flow Data (unaudited) ($000) Nine Months Ended
--------------------------------- September 30,
2005 2004
----------- -----------
Cash flow from operating activities $ 35,990 $ 14,584
Cash flow used in investing activities (10,753) (16,082)
Cash flow used in financing activities (25,012) 5,009