HOUSTON, Nov. 1, 2006 (PRIMEZONE) -- GulfMark Offshore, Inc. (Nasdaq:GMRK) today announced record net income for both the third quarter and the nine months ending September 30, 2006. Net income for the third quarter was $39.9 million, or $1.91 per diluted share, including a $6.6 million gain on the sale of a vessel. Quarterly revenue of $75.8 million reached an all time high, exceeding the level set in the prior quarter. Operating income for the third quarter of $44.4 million was also a new record. When compared to the second quarter of 2006, net income more than tripled while revenues increased over thirty percent. The improvements were directly related to improved day rates and increased vessel utilization in both the North Sea and Southeast Asia regions. The previously announced sale of the Highland Patriot, a vessel which had been operating in our Southeast Asia Region, contributed $0.32 per diluted share to the record results. Excluding the gain on the sale of the vessel, net income would have been $33.3 million, or $1.59 per diluted share, nearly 2.5 times the previous high set in the second quarter of 2006.
Comparing the 2006 third quarter results to the same quarter in 2005, when net income was $13.0 million or $0.63 per diluted share on revenue of $53.0 million, net income more than tripled and revenue increased forty-three percent. The $22.8 million increase in revenue in 2006 over the same quarter in 2005 was attributable to improvements in day rates of $18.2 million, utilization of $2.2 million, currency exchange of $1.8 million and the full quarter effect of our recent new builds of $1.9 million. Partially offsetting the rise in revenue was a decrease of $1.3 million related to the termination of the bareboat leased vessel at the beginning of 2006, and the vessel sale.
Bruce Streeter, President and COO, stated: "The outstanding quarterly performance is the direct result of being strategically positioned to take full advantage of a strong market and having been prepared for the anticipated seasonal impact. During the quarter, we had extremely high utilization and dry-docked only two vessels. We believed that we would have a very strong market during the quarter and completed as much of the dry-dock schedule as possible early in the year to increase the number of vessels available for the spot market during this active period. In the longer term perspective, we believe this quarter has demonstrated the significant increase in earnings power from our previous newbuilding program.
The gain on sale of the Highland Patriot is also noteworthy as it is indicative of the unrecognized value of our assets which we believe is frequently overlooked. It is important to appreciate that the quarter reflects the earnings potential of our growing fleet. To the extent we operate vessels in the short term or spot market, and as that market changes, margins on some vessels can change significantly as evidenced by the operating results this quarter. The timing of maintenance and resulting changes in utilization will also have an impact on our results in future quarters. Our view is that a large part of the future growth of GulfMark will come from our current new construction program as these vessels join the fleet. We believe the current and planned changes in our fleet will provide a better mix of equipment to meet the market opportunities in the future. All in all, this was a great quarter with a very satisfying result and we look forward to the balance of the year as well as 2007."
At September 30, 2006 GulfMark had working capital of $74.0 million, including $42.4 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 for the construction of the second Aker PSV09 vessel.
GulfMark will hold a conference call to discuss the earnings with analysts, investors and other interested parties at 11:30 A.M. EST/10:30 A.M. CST on Thursday, November 2, 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 3rd 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 9729409.
GulfMark and its subsidiaries provide 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 --------------------------------------------- Sept. 30, June 30, Sept. 30, 2006 2006 2005 -------- -------- -------- Revenues $ 75,831 $ 58,433 $ 53,048 Direct operating expenses 23,450 22,493 20,044 Drydock expense 1,507 3,580 1,497 Bareboat charter expense -- -- 1,056 General and administrative expenses 6,126 6,228 4,684 Depreciation expense 7,033 7,355 7,260 Gain on sale of assets (6,640) -- -- -------- -------- -------- Operating Income 44,355 18,777 18,507 Interest expense (3,797) (4,134) (4,657) Interest income 134 265 78 Foreign currency gain (loss) and other 373 (814) 162 -------- -------- -------- Income before income taxes 41,065 14,094 14,090 Income tax provision (1,213) (1,060) (1,058) -------- -------- -------- NET INCOME $ 39,852 $ 13,034 $ 13,032 ======== ======== ======== Earnings per share: ------------------- Basic $ 1.96 $ 0.64 $ 0.65 Diluted $ 1.91 $ 0.63 $ 0.63 Weighted average common shares 20,300 20,224 20,046 Weighted average diluted common shares 20,855 20,740 20,723 Operating Statistics Three Months Ended -------------------- --------------------------------------- Sept. 30, June 30, Sept. 30, 2006 2006 2005 --------- ------- -------- Revenues by Region (000's) ------------------------- North Sea based fleet $62,523 $45,806 $42,187 Southeast Asia based fleet 7,741 6,100 4,613 Americas based fleet 5,567 6,527 6,248 Rates Per Day Worked -------------------- North Sea based fleet $23,366 $17,977 $16,149 Southeast Asia based fleet 7,094 6,260 5,808 Americas based fleet 10,809 10,964 10,294 Overall Utilization ------------------- North Sea based fleet 96.9% 93.7% 93.2% Southeast Asia based fleet 99.1% 92.7% 88.0% Americas based fleet 95.9% 100.0% 98.0% Average Owned/Chartered Vessels ---------------------- North Sea based fleet 31.0 30.3 31.0 Southeast Asia based fleet 11.9 11.7 10.0 Americas based fleet 6.0 6.7 7.0 ------- ------- ------- Total 48.9 48.7 48.0 ======= ======= ======= Drydock Activity(a) ------------------- North Sea based fleet 2 6 2 Southeast Asia based fleet -- 2 2 Americas based fleet -- -- 0 ------- ------- ------- Total 2 8 4 ======= ======= ======= Expenditures (000's) $ 1,507 $ 3,580 $ 1,497 ======= ======= ======= At October 26, 2006 At October 26, 2005 --------------------- --------------------- 2006(c) 2007(d) 2005(c) 2006(d) -------- -------- -------- --------- Forward Contract Cover(b) ---------------- North Sea based fleet 93% 64% 91% 60% Southeast Asia based fleet 92% 22% 77% 9% Americas based fleet 100% 86% 100% 93% -------- -------- -------- --------- Total 93% 56% 89% 53% ======== ======== ======== ========= (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 (10/27-12/31). (d) Represents full year (1/1-12/31). Statement of Operations (unaudited) ----------------------------------- Nine Months Ended ----------------------------------- September 30, September 30, 2006 2005 ---------- ---------- Revenues $ 181,939 $ 152,454 Direct operating expenses 67,727 60,236 Drydock expense 7,843 6,656 Bareboat charter expense -- 2,819 General and administrative expenses 18,255 14,387 Depreciation expense 21,449 21,714 Gain on sale of assets (6,640) -- ---------- ---------- Operating Income 73,305 46,642 Interest expense (12,229) (14,190) Interest income 564 309 Foreign currency loss and other 70 (306) ---------- ---------- Income before income taxes 61,710 32,455 Income tax provision (2,561) (2,242) ---------- ---------- NET INCOME $ 59,149 $ 30,213 ========== ========== Earnings per share: ------------------ Basic $ 2.93 $ 1.51 Diluted $ 2.84 $ 1.46 Weighted average common shares 20,220 20,028 Weighted average diluted common shares 20,841 20,699 Operating Statistics Nine Months Ended -------------------- ------------------------------------ September 30, September 30, 2006 2005 ---------- --------- Revenues by Region (000's) -------------------------- North Sea based fleet $ 144,151 $ 121,116 Southeast Asia based fleet 18,818 13,860 Americas based fleet 18,970 17,478 Rates Per Day Worked -------------------- North Sea based fleet $ 18,829 $ 16,152 Southeast Asia based fleet 6,539 5,742 Americas based fleet 11,046 11,614 Overall Utilization -------------------- North Sea based fleet 94.2% 91.4% Southeast Asia based fleet 92.1% 90.7% Americas based fleet 98.3% 95.7% Average Owned/Chartered Vessels ----------------------- North Sea based fleet 30.5 30.8 Southeast Asia based fleet 11.5 10.0 Americas based fleet 6.6 5.9 ---------- --------- Total 48.6 46.7 ========== ========= Drydock Activity(a) ------------------- North Sea based fleet 12 9 Southeast Asia based fleet 4 2 Americas based fleet 1 3 ---------- -------- Total 17 14 ========== ========= Expenditures (000's) $ 7,843 $ 6,656 ========== ========= (a)Represents number of completed drydocks in period. As of As of Balance Sheet Data (unaudited) Sept. 30, Dec. 31, ($000) 2006 2005 ------------------------------ ----------- --------- Cash $ 42,376 $ 24,190 Working capital 73,992 34,941 Vessel and equipment, net 516,725 485,417 Construction in Progress 37,587 25,029 Total assets 699,450 613,915 Long term debt 240,939 247,685 Shareholders' equity 412,365 320,096 ------------- ------------- Nine Months Nine Months Ended Ended Cash Flow Data (unaudited) Sept. 30, Sept. 30, ($000) 2006 2005 -------------------------- ------------- ------------- Cash flow from operating activities $ 55,587 $ 35,990 Cash flow used in investing activities (26,603) (10,753) Cash flow used in financing activities (14,589) (25,012)