HOUSTON, Nov. 1, 2007 (PRIME NEWSWIRE) -- GulfMark Offshore, Inc. (NYSE:GLF) today announced results of $31.2 million in net income, or $1.35 per diluted share, for the third quarter ending September 30, 2007. The Company also provided details of a $130 million, five vessel addition to the existing new build program, including three 3,000 DWT Platform Supply Vessels (PSVs) built to U.S. flag requirements and two 10,000 BHP Anchor Handling, Towing, Tug Supply (AHTSs).
Revenue for the third quarter 2007 was $74.7 million resulting in net income of $31.2 million, or $1.35 per diluted share. Revenue benefitted from marked improvement in Southeast Asia day rates offset by a moderation in North Sea rates from the year ago record levels. Net income during the quarter benefited from the gains on vessel sales of $4.1 million, including the previously announced sale of the Sea Explorer. These gains were partially offset by our share of a deficit in a U.K. based industry-wide pension plan equivalent to $1.7 million, as well as higher dry dock costs related to the acceleration of one dry dock from the fourth quarter into the third quarter. Excluding the gains on vessel sales and the pension expense adjustment, net income was $28.8 million or $1.24 per diluted share.
For the nine months ended September 30, 2007, revenues were $214.6 million resulting in net income of $86.3 million, or $3.73 per diluted share. For the same period in 2006, revenues were $181.9 million and net income was $59.1 million, or $2.84 per diluted share.
Bruce Streeter, President and CEO, stated: "We were quite pleased with the development and results of the third quarter, despite the increased dry docking costs and slightly lower spot market rates in the North Sea when compared to either the same period last year or the second quarter of 2007. Our continued growth in earnings year over year will come from the expansion of the fleet, the improvements in fleet mix and the ensuing contracts we are able to obtain. Earlier in the year, the operating tempo and customer requirements caused us to postpone some dry dock activity. We have spent considerably more on dry docks in this quarter and, to some extent, have caught up to our expected level of activity. Late in the third quarter of 2007, we accelerated a dry dock, originally scheduled for October, and completed it late in the September. We also accomplished an additional dynamic positioning (DP) upgrade to one of the North Sea vessels, the third vessel to which we have added DP capabilities this year.
"During the third quarter, and carrying forward to the present, we have been extremely active in completing and delivering new vessels while disposing of several older, smaller ships. Late in the third quarter, we took delivery of a large North Sea PSV, and as mentioned earlier, sold a small anchor handling vessel in Southeast Asia. Subsequent to the quarter end, we also sold another vessel in Southeast Asia and took delivery of two new vessels in that region. The North Sea vessel delivered in the third quarter and the two Southeast Asia vessels that delivered in late October have all started term contracts. Earlier in the year, we had indicated concern about potential delays in vessel deliveries which might impede our ability to meet contract start up requirements. We commend Jaya Holdings Ltd. and the Keppel Singmarine Pte Ltd groups in Singapore for meeting our delivery expectations on the Sea Supporter and Sea Cheyenne delivered in October 2007, despite the late arrival of some equipment. They did an excellent job in delivering high quality ships, while completing the vessels to allow on-time contract startup. We also want to compliment Aker Yards and Aker Soviknes for delivering another outstanding large platform supply vessel, the North Promise, two days ahead of the scheduled delivery date designated in the original contract.
"During the third quarter of 2007, we signed agreements with two shipyards to add five new vessels for a total cost of approximately $130 million to our new build program. Of the five new builds, the two (AHTS) vessels will be constructed at Gdansk Shiprepair Yard "Remontowa" SA in Poland. The three PSVs, built to U.S. flag requirements, will be constructed by Bender Shipbuilding & Repair in Mobile, Alabama. The first of these vessels is scheduled to be delivered in the fourth quarter of 2009 with the last of the five scheduled in the third quarter of 2010. We are extremely excited about the new additions to our new build program which will add twelve new ships over the next thirty-four months. We will also seek to upgrade and improve the mix of vessels in the fleet through additions and selective dispositions as those opportunities occur.
"We continue to observe strong market conditions in all of our operating regions and will take the appropriate actions to benefit from the available charter opportunities. We believe our strategy has established the foundation for the potential growth of earnings and shareholder value well into the future."
Liquidity and Capital Commitments
Cash flow from operations totaled $86.2 million for the nine months ended September 30, 2007, compared to $55.6 million for the same period in 2006. Liquidity at quarter-end was $278.7 million consisting of working capital of $103.7 million, including $60.6 million in cash, and the entire $175.0 million available under the revolving credit facility. Total debt at September 30, 2007 was $159.5 million, comprised solely of the 7.75% senior notes due 2014. Cash from operations plus cash on hand have been used to fund $124.8 million in capital expenditures during the first nine months of 2007, primarily related to the new build program. Remaining commitments during the fourth quarter of 2007 under the new build program are approximately $55.4 million, including the five new vessels announced today, and are expected to be funded from cash flow from operations and available cash.
Filing of 10-Q for 3rd Quarter
GulfMark will file its Form 10-Q for the 3rd quarter of 2007 with the Securities and Exchange Commission contemporaneously with this release. Conference Call Information
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 Friday, November 2, 2007. 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 callers should use 706/645-9291) and entering access code 21395856.
GulfMark and its subsidiaries provide marine transportation services to the energy industry through a fleet of sixty-one (61) 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.
Three Months Ended
--------------------------------
Sept. 30, June 30, Sept. 30,
2007 2007 2006
-------- -------- --------
Revenues $ 74,717 $ 74,341 $ 75,831
Direct operating expenses 26,876 24,688 23,450
Drydock expense 3,068 1,012 1,507
General and administrative expenses 7,482 8,584 6,126
Depreciation expense 7,615 7,425 7,033
Gain on sale of assets (4,131) (1,249) (6,640)
-------- -------- --------
Operating Income $ 33,807 $ 33,881 $ 44,355
Interest expense (1,464) (2,038) (3,797)
Interest income 825 845 134
Foreign currency gain (loss)
and other 134 190 373
-------- -------- --------
Income before income taxes $ 33,302 $ 32,878 $ 41,065
Income tax provision (2,070) (2,157) (1,213)
-------- -------- --------
Net Income $ 31,232 $ 30,721 $ 39,852
======== ======== ========
Earnings per share:
Basic $ 1.39 $ 1.37 $ 1.96
Diluted $ 1.35 $ 1.32 $ 1.91
Weighted average
common shares 22,497 22,443 20,300
Weighted average diluted
common shares 23,198 23,187 20,855
Operating Statistics
--------------------
Revenues by Region (000's)
North Sea based fleet $ 58,117 $ 59,997 $ 62,523
Southeast Asia based fleet 10,940 8,459 7,741
Americas based fleet 5,660 5,885 5,567
Rates Per Day Worked
North Sea based fleet $ 22,941 $ 23,788 $ 23,366
Southeast Asia based fleet 10,470 8,373 7,094
Americas based fleet 11,132 11,364 10,809
Overall Utilization
North Sea based fleet 94.5% 92.6% 96.9%
Southeast Asia based fleet 96.6% 90.6% 99.1%
Americas based fleet 94.2% 97.2% 95.9%
Average Owned/Chartered Vessels
North Sea based fleet 28.2 29.3 31.0
Southeast Asia based fleet 12.0 12.5 11.9
Americas based fleet 6.0 6.0 6.0
-------- -------- --------
Total 46.2 47.8 48.9
======== ======== ========
Drydock Activity(1)
North Sea based fleet 2 1 2
Southeast Asia based fleet -- 2 --
Americas based fleet 1 -- --
-------- -------- --------
Total 3 3 2
======== ======== ========
Expenditures (000's) $ 3,068 $ 1,012 $ 1,507
======== ======== ========
At At
September 30, 2007 October 26, 2006
------------------ ------------------
2007(3) 2008(4) 2006(3) 2007(4)
------- ------- ------- -------
Forward Contract Cover(2)
North Sea based fleet 84.7% 72.0% 92.8% 64.4%
Southeast Asia based fleet 80.8% 34.3% 91.5% 22.3%
Americas based fleet 100.0% 87.8% 100.0% 85.8%
------- ------- ------- -------
Total 85.7% 64.4% 93.4% 56.4%
======= ======= ======= =======
(1) Represents number of completed drydocks in period.
(2) 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.
(3) Represents remaining period (10/1/07 - 12/31/07, and
10/27/06 - 12/31/06), respectively.
(4) Represents full year (1/1-12/31).
Statement of Operations (unaudited)
-----------------------------------
Nine Months Ended
September 30,
----------------------
2007 2006
--------- ---------
Revenues $ 214,571 $ 181,939
Direct operating expenses 76,478 67,727
Drydock expense 8,539 7,843
General and administrative expenses 22,699 18,255
Depreciation expense 22,147 21,449
Gain on sale of assets (10,393) (6,640)
--------- ---------
Operating Income 95,101 73,305
Interest expense (6,114) (12,229)
Interest income 2,696 564
Foreign currency loss and other 222 70
--------- ---------
Income before income taxes 91,905 61,710
Income tax provision (5,599) (2,561)
--------- ---------
NET INCOME $ 86,306 $ 59,149
========= =========
Earnings per share:
------------------
Basic $ 3.85 $ 2.93
Diluted $ 3.73 $ 2.84
Weighted average common shares 22,413 20,220
Weighted average diluted common shares 23,127 20,841
Operating Statistics
--------------------
Revenues by Region (000's)
North Sea based fleet $ 169,782 $ 144,151
Southeast Asia based fleet 28,103 18,818
Americas based fleet 16,686 18,970
Rates Per Day Worked
North Sea based fleet $ 22,684 $ 18,829
Southeast Asia based fleet 9,254 6,539
Americas based fleet 11,072 11,046
Overall Utilization
North Sea based fleet 92.7% 94.2%
Southeast Asia based fleet 93.4% 92.1%
Americas based fleet 94.2% 98.3%
Average Owned/Chartered Vessels
North Sea based fleet 28.7 30.5
Southeast Asia based fleet 12.2 11.5
Americas based fleet 6.0 6.6
--------- ---------
Total 46.9 48.6
========= =========
Drydock Activity(1)
North Sea based fleet 8 12
Southeast Asia based fleet 3 4
Americas based fleet 2 1
--------- ---------
Total 13 17
========= =========
Expenditures (000's) $ 8,539 $ 7,843
========= =========
(1) Represents number of completed drydocks in period.
Balance Sheet Data As of As of
(unaudited) ($000) September 30, 2007 December 31, 2006
------------------- ------------------ -----------------
Cash and cash equivalents $ 60,600 $ 82,759
Working capital 103,748 104,948
Vessel and equipment, net 603,296 524,676
Construction in progress 97,792 47,313
Total assets 894,783 750,829
Long term debt 159,541 159,490
Shareholders' equity 665,399 541,428
------------------ -----------------
Nine Months Ended Nine Months Ended
Cash Flow Data September 30, 2007 September 30, 2006
(unaudited) ($000) ------------------ -----------------
-----------------
Cash flow from operating
activities $ 86,243 $ 55,587
Cash flow used in investing
activities (111,560) (26,603)
Cash flow used in financing
activities 238 (14,589)