HOUSTON, July 28, 2006 (PRIMEZONE) -- GulfMark Offshore, Inc. (Nasdaq:GMRK) today announced record profits for both the second quarter and first half of 2006. Net income for the second quarter of $13.0 million, or $0.63 per diluted share, and revenue of $58.4 million set new records, exceeding those previously set in the third quarter of 2005. Operating income of $18.8 million also established a new GulfMark record. Compared to the first quarter of 2006, net income more than doubled while revenues increased over twenty-two percent. The improvements were directly related to improved day rates, increased vessel utilization and the contribution from the newest addition to the fleet.
Comparing the record 2006 second quarter results to the same quarter in 2005 when net income was $8.3 million, or $0.40 per diluted share on revenue of $51.3 million, both net income and revenue increased 58% and 14% respectively. The $7.1 million increase in revenue in 2006 over the same quarter in 2005 is attributable to improvements in day rates of $4.1 million, utilization of $2.3 million and the full quarter effect of four of our new builds of $2.2 million. Partially offsetting was a decrease of $1.5 million related to the termination of the bareboat leased vessel at the beginning of 2006.
Bruce Streeter, President and COO, stated: "The historic levels of operating income and net income achieved in the quarter reflect both the underlying strength of the markets we serve and the improvements we indicated would come as we completed the bulk of our dry dock requirements for the year. With more than two thirds of our planned dry docks completed in the first half we will have an increased number of vessel days available in the second half of the year. We therefore are looking forward to the balance of the year and into 2007 when we believe we will see continued improvement in term day rates.
"Our second quarter performance is attributable to a number of positive factors. The contribution from the earlier new build program has been identifiable for sometime, but we are now benefiting from the current building program as our most recent delivery, the Sea Guardian, is on contract and continues to work at a favorable rate. In comparison to the second quarter of 2005, we also have had the benefit of the two vessels working in Mexico and the Sea Intrepid that delivered late last year.
"In the North Sea, the two large anchor handling vessels operating in the spot market have experienced excellent results including a number of days at all-time record day rates. Demand continues to be strong and we have been working with customers to try and balance their vessel needs as best we can with our near term dry dock requirements. We moved one vessel from the Americas to the North Sea and, while we did most of the planned dry docks, we were not able to complete all of those we hoped to do in the second quarter. In Southeast Asia, we benefited from the increased fleet size, improving rates and increased utilization. In the Americas, the fleet size was reduced by the one vessel that transferred to the North Sea, but the rest of the fleet, all on long term contracts, performed well with no lost revenue days."
At June 30, 2006 GulfMark had working capital of $43.3 million, including $25.5 million in cash. The Company had total debt of $240.9 million, consisting of $159.5 million of senior notes, $80.9 million outstanding under the new credit facility and $0.5 million related to the Aker Joint Venture capital contribution (construction of the Aker PSV09 vessel).
GulfMark will hold a conference call to discuss the earnings with analysts, investors and other interested parties at 9:00 A.M. EDT/8:00 A.M. CDT on Monday, July 31, 2006. Those interested in participating in the conference call should call 877/381-5943 (706/679-4543, if outside the U.S. and Canada) 5 minutes in advance of the start time and ask for the GulfMark 2nd Quarter Earnings conference. The conference call will also be available via audio web cast and podcast at http://www.investorcalendar.com. A telephonic replay of the conference call will be available for 4 days, starting approximately 2 hours after the completion of the call, and can be accessed by dialing 800/642-1687 (international calls should use 706/645-9291) and entering access code 3293926.
GulfMark provides marine transportation services to the energy industry through a fleet of sixty (60) 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 GulfMark 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 GulfMark's filings with the SEC, including its Form 10-k for the year ended December 31, 2005. 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
--------------------------------
June 30, March 31, June 30,
2006 2006 2005
-------- -------- --------
Revenues $ 58,433 $ 47,675 $ 51,340
Direct operating expenses 22,493 21,784 21,036
Drydock expense 3,580 2,756 3,610
Bareboat charter expense -- -- 1,382
General and administrative expenses 6,228 5,901 4,987
Depreciation expense 7,355 7,061 7,256
-------- -------- --------
Operating Income 18,777 10,173 13,069
Interest expense (4,134) (4,298) (4,763)
Interest income 265 165 183
Foreign currency gain (loss)
and other (814) 511 568
-------- -------- --------
Income before income taxes 14,094 6,551 9,057
Income tax provision (1,060) (288) (803)
-------- -------- --------
NET INCOME $ 13,034 $ 6,263 $ 8,254
======== ======== ========
Earnings per share:
-------------------
Basic $ 0.64 $ 0.31 $ 0.41
Diluted $ 0.63 $ 0.30 $ 0.40
Weighted average common shares 20,224 20,143 20,041
Weighted average diluted common
shares 20,740 20,793 20,639
Operating Statistics
-------------------- Three Months Ended
--------------------------------
June 30, March 31, June 30,
2006 2006 2005
-------- -------- --------
Revenues by Region (000's)
--------------------------
North Sea based fleet $ 45,806 $ 35,822 $ 40,469
Southeast Asia based fleet 6,100 4,977 4,790
Americas based fleet 6,527 6,876 6,081
Rates Per Day Worked
--------------------
North Sea based fleet $ 17,977 $ 14,665 $ 16,068
Southeast Asia based fleet 6,260 6,142 5,679
Americas based fleet 10,964 11,233 13,382
Overall Utilization
-------------------
North Sea based fleet 93.7% 92.0% 90.8%
Southeast Asia based fleet 92.7% 83.7% 94.4%
Americas based fleet 100.0% 99.7% 89.3%
Average Owned/Chartered Vessels
-------------------------------
North Sea based fleet 30.3 30.0 31.0
Southeast Asia based fleet 11.7 11.0 10.0
Americas based fleet 6.7 7.0 5.7
-------- -------- --------
Total 48.7 48.0 46.7
======== ======== ========
Drydock Activity(a)
-------------------
North Sea based fleet 6 4 4
Southeast Asia based fleet 2 2 --
Americas based fleet -- 1 3
-------- -------- --------
Total 8 7 7
======== ======== ========
Expenditures (000's) $ 3,580 $ 2,756 $ 3,610
======== ======== ========
At June 30, 2006 At June 30, 2005
------------------ ------------------
2006(c) 2007(d) 2005(c) 2006(d)
-------- -------- -------- --------
Forward Contract Cover(2)
-------------------------
North Sea based fleet 91% 55% 84% 49%
Southeast Asia based fleet 60% 13% 58% 10%
Americas based fleet 100% 86% 100% 93%
-------- -------- -------- --------
Total 85% 48% 81% 47%
======== ======== ======== ========
(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 (7/1-12/31).
(d) Represents full year (1/1-12/31).
Statement of Operations (unaudited) Six Months Ended
----------------------------------- ----------------------
June 30, June 30,
2006 2005
--------- ---------
Revenues $ 106,108 $ 99,406
Direct operating expenses 44,277 40,192
Drydock expense 6,336 5,159
Bareboat charter expense -- 1,763
General and administrative expenses 12,129 9,703
Depreciation expense 14,416 14,454
--------- ---------
Operating Income 28,950 28,135
Interest expense (8,432) (9,533)
Interest income 430 231
Foreign currency loss and other (303) (468)
--------- ---------
Income before income taxes 20,645 18,365
Income tax provision (1,348) (1,184)
--------- ---------
NET INCOME $ 19,297 $ 17,181
========= =========
Earnings per share:
-------------------
Basic $ 0.96 $ 0.86
Diluted $ 0.93 $ 0.83
Weighted average common shares 20,184 20,019
Weighted average diluted common
shares 20,833 20,653
Operating Statistics
-------------------- Six Months Ended
--------------------
June 30, June 30,
2006 2005
-------- --------
Revenues by Region (000's)
--------------------------
North Sea based fleet $ 81,628 $ 78,929
Southeast Asia based fleet 11,077 9,247
Americas based fleet 13,403 11,230
Rates Per Day Worked
--------------------
North Sea based fleet $ 16,354 $ 16,154
Southeast Asia based fleet 6,206 5,709
Americas based fleet 11,101 12,530
Overall Utilization
-------------------
North Sea based fleet 92.8% 90.4%
Southeast Asia based fleet 88.4% 92.1%
Americas based fleet 99.8% 94.2%
Average Owned/Chartered Vessels
-------------------------------
North Sea based fleet 30.2 30.7
Southeast Asia based fleet 11.3 10.0
Americas based fleet 6.8 5.3
-------- --------
Total 48.3 46.0
======== ========
Drydock Activity(a)
-------------------
North Sea based fleet 10 7
Southeast Asia based fleet 4 --
Americas based fleet 1 3
-------- --------
Total 15 10
======== ========
Expenditures (000's) $ 6,336 $ 5,159
======== ========
(a) Represents number of completed drydocks in period.
Balance Sheet Data (unaudited) As of As of
($000) June 30, 2006 December 31, 2005
------------------------------ ------------- -----------------
Cash $ 25,467 $ 24,190
Working capital 43,339 34,941
Vessel and equipment, net 513,067 485,417
Construction in Progress 33,120 25,029
Total assets 658,908 613,915
Long term debt 240,919 247,685
Shareholders' equity 373,979 320,096
------------- -------------
Cash Flow Data (unaudited) Six Months Ended Six Months Ended
($000) June 30, 2006 June 30, 2005
------------------------------ ------------- -------------
Cash flow from operating
activities $ 29,433 $ 26,116
Cash flow used in investing
activities (17,682) (8,323)
Cash flow used in financing
activities (14,921) (8,982)