HOUSTON, Oct. 28, 2008 (GLOBE NEWSWIRE) -- GulfMark Offshore, Inc. (NYSE:GLF) today announced results of operations for the third quarter and nine months ended September 30, 2008. Third quarter highlights include:
* Revenue of $124.6 Million * Operating Income of $50.0 Million Before Gains on Vessel Sales * Acquisition of Rigdon Marine Exceeding Expectations * Record EPS of $1.69 Before Gains on Vessel Sales
Financial Review
3rd Quarter 2008 Compared to 3rd Quarter 2007
Revenue of $124.6 million for the third quarter of 2008 was $49.9 million, or 66.8%, above the same period in 2007. Operating income of $50.0 million in the third quarter of 2008, before gains on vessel sales, increased $20.3 million, or 68.6%, over the prior period in 2007. Net income for the third quarter of 2008, also excluding gains on vessel sales, established a new record of $1.69 per diluted share, when compared to the previous record of $1.59 per diluted share, excluding gains on vessel sales, established in the third quarter of 2006. The acquisition of Rigdon Marine Corporation ("Rigdon") was completed on July 1, 2008 and during the third quarter contributed $34.8 million, or 46.6%, of the revenue increase while internal growth across the other operating segments provided $15.1 million, or 20.2% of the increase. Operating income contribution from the Rigdon acquisition was $14.1 million, or 47.7%, of the increase over the previous year. Strong operating results from virtually all of the operating segments, excluding the Rigdon contribution, provided an increase of $6.2 million, or 20.9%, in operating income when compared to the third quarter of 2007.
3rd Quarter 2008 Compared to 2nd Quarter 2008
Revenue for the third quarter increased $42.7 million, or 52.2%, over the second quarter of 2008. As referenced above, the Rigdon acquisition provided $34.8 million, or 42.5%, of the revenue increase, quarter over quarter, while internal growth provided $7.9 million, or 9.7% of the quarterly increase. Operating income, excluding gains on vessel sales, for the third quarter was $19.6 million, or 64.5%, above the previous quarter in 2008 with $14.1 million, or 46.5%, attributable to the Rigdon acquisition and internal growth responsible for $5.5 million, or 18.0%. Overall, a 3.1% increase was realized in the operating income margin, before gains on vessel sales, in the third quarter when compared to the second quarter of 2008.
Commentary
Bruce Streeter, President and CEO, commented: "We are very pleased with our third quarter accomplishments. The Rigdon acquisition is providing us with strong incremental improvement in the Americas region and is exceeding our initial estimates. More importantly, all of our operations demonstrated solid revenue and operating income growth during the quarter.
"As reported earlier, we relocated the Sea Kiowa during the quarter from Southeast Asia to Brazil in the Americas region where we now have a total of six vessels. During the third quarter we also took delivery of three new vessels: the AHTS Sea Choctaw, the PSV Knockout, and the crew boat Albacore. In addition, we disposed of two vessels in the third quarter: the Sem Valiant, a small AHTS built in 1981 and the Sea Eagle, a small AHTS built in 1976. Subsequent to the third quarter, we took delivery of the Mako, a 181 foot fast supply vessel, and sold the North Fortune, a large PSV built in 1983, for approximately $19 million. Our fleet now comprises 93 vessels, 70 of which are owned vessels with an average age of less than 8 years. We have one of the youngest fleets of our publicly traded peer group and our upcoming deliveries of another 12 vessels through 2010 will provide our customers with one of the safest, most advanced, and youngest fleets available.
"Our new build program is generally on track; however, we have revised the delivery date estimates due to delays in delivery of key equipment components on two vessels, the Sea Cherokee and the Sea Comanche. Both of these vessels had been scheduled to be delivered in the fourth quarter of 2008 and we are now expecting them to be delivered during the first quarter of 2009.
"We are in a period of volatile and uncertain economic conditions and must be prepared to face market conditions as they develop. We have not seen a decrease in activity in the areas where we operate; however, our strategy of establishing a significant forward contract position, a diversification of our operating areas and a broad client base, we believe will minimize any near term impact if a decrease in oil and gas expenditures were to occur. Furthermore, the young age and technical qualifications of our fleet should allow us to do well as new deepwater offshore rigs are delivered and activity develops over the next several years."
Liquidity and Capital Commitments
Cash flow from operations totaled $128.5 million for the nine months ended September 30, 2008, compared to $86.2 million for the same period in 2007. Cash from operations plus cash on hand were used to fund approximately $93.1 million in capital expenditures, primarily related to the new build program. Estimated cash commitments for the fourth quarter of 2008 for the new build program are approximately $21.3 million and are expected to be funded from cash on hand.
On July 1, 2008, we closed the Rigdon acquisition, utilizing $152.6 million of our cash on hand at the end of the second quarter and assuming approximately $268.9 million of existing Rigdon debt. During the quarter, we reduced this indebtedness by approximately $89.8 million.
Liquidity at quarter-end was $174.7 million, consisting of $84.7 million of working capital and $90.0 million available under the $175.0 revolving credit facility. Total debt at September 30, 2008 was $487.4 million, comprised of $159.6 million for the 7.75% Senior Notes due 2014, $85.0 million outstanding under our revolving credit facility, and $242.8 under the debt assumed through the Rigdon acquisition.
Conference Call Information
GulfMark will conduct a conference call to discuss the earnings with analysts, investors and other interested parties at 9:00 a.m. EDT on October 29, 2008. Those interested in participating in the conference call should call 877-381-5943 (international callers should use 793-638-3424) five minutes in advance of the start time and ask for the GulfMark Third Quarter Earnings conference call. A telephonic replay of the conference call will be available for four 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 70180115. The conference call will also be available via audio webcast and available for podcast download and can be accessed from the Investor Relations section of GulfMark's website at www.gulfmark.com or by visiting www.investorcalendar.com. The webcast will be available for replay until December 29, 2008. A transcript of the call will be filed with the SEC on Form 8-K as soon as practicable.
GulfMark Offshore, Inc. provides marine transportation services to the energy industry through a fleet of 93 offshore support vessels serving every major offshore energy market throughout the world.
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 Registrations Statement on form S-3 Dated September 12, 2008 and its Form 10-K for the year ended December 31, 2007. 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, March 31, Dec. 31, Sept. 30,
2008 2008 2008 2007 2007
-------- -------- -------- -------- --------
Revenue $124,616 $ 81,893 $ 83,348 $ 91,455 $ 74,717
Direct operating
expenses 46,482 29,912 27,698 31,908 26,876
Drydock expense 3,504 2,630 3,692 4,067 3,068
General and
administrative
expenses 11,123 9,421 8,777 9,612 7,482
Depreciation and
amortization
expense 13,463 9,515 8,748 8,476 7,615
Gain on sale of
assets (2,347) (16,407) (3) (1,776) (4,131)
-------- -------- -------- -------- --------
Operating Income 52,391 46,822 34,436 39,168 33,807
Interest expense (5,151) (935) (1,182) (1,809) (1,464)
Interest income 385 296 296 451 825
Foreign currency
gain (loss) and
other 2,278 195 (150) (520) 134
-------- -------- -------- -------- --------
Income before
income taxes 49,903 46,378 33,400 37,290 33,302
Income tax benefit
(provision) (4,484) 403 (1,136) (24,621) (2,070)
-------- -------- -------- -------- --------
Net Income $ 45,419 $ 46,781 $ 32,264 $ 12,669 $ 31,232
======== ======== ======== ======== ========
Earnings per
share:
Basic $ 1.83 $ 2.06 $ 1.43 $ 0.56 $ 1.39
Diluted $ 1.78 $ 2.00 $ 1.40 $ 0.55 $ 1.35
Weighted average
common shares 24,865 22,661 22,543 22,502 22,497
Weighted average
diluted common
shares 25,445 23,334 23,116 23,097 23,198
Operating
Statistics Three Months Ended
----------- ----------------------------------------------------
Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
2008 2008 2008 2007 2007
-------- -------- -------- -------- --------
Revenue by
Region
(000's)
----------
North Sea
based fleet $ 59,169 $ 53,452 $ 60,508 $ 71,882 $ 58,117
Southeast Asia
based fleet 21,094 20,175 16,228 13,154 10,940
Americas based
fleet 44,353 8,266 6,612 6,419 5,660
Rates Per Day
Worked
-------------
North Sea
based fleet $ 23,449 $ 21,766 $ 24,974 $ 28,324 $ 22,941
Southeast Asia
based fleet 18,844 17,992 14,335 13,475 10,470
Americas based
fleet 16,815 15,854 13,062 12,292 11,132
Overall
Utilization
------------
North Sea base
fleet 94.1% 95.3% 92.4% 93.0% 94.5%
Southeast Asia
based fleet 97.2% 86.6% 96.8% 93.2% 96.6%
Americas based
fleet 93.9% 85.5% 88.0% 97.0% 94.2%
Average Owned/
Chartered
Vessels
--------------
North Sea
based fleet 27.0 27.0 28.3 28.2 28.2
Southeast Asia
based fleet 12.8 14.8 13.0 12.0 12.0
Americas based
fleet 31.0 7.0 6.3 6.0 6.0
-------- -------- -------- -------- --------
Total 70.8 48.8 47.6 46.2 46.2
======== ======== ======== ======== ========
Drydock Days
------------
North Sea
based fleet 28 51 45 55 60
Southeast Asia
based fleet 5 21 13 28 --
Americas based
fleet 54 84 37 -- 14
-------- -------- -------- -------- --------
Total 87 156 95 83 74
======== ======== ======== ======== ========
Expenditures
(000's) $ 3,504 $ 2,630 $ 3,692 $ 4,067 $ 3,068
======== ======== ======== ======== ========
At October 24, At October 23,
2008 2007
---------------- ----------------
2008(2) 2009(3) 2007(2) 2008(3)
------- ------- ------- -------
Forward Contract Cover(1)
-------------------------
North Sea based fleet 96% 65% 85% 72%
Southeast Asia based fleet 81% 51% 81% 34%
Americas based fleet 92% 53% 100% 88%
------- ------- ------- -------
Total 90% 57% 86% 64%
======= ======= ======= =======
(1) 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 and includes the
newly acquired Rigdon fleet effective July 1, 2008.
(2) Represents three months (10/1-12/31).
(3) Represents full year (1/1-12/31).
Statement of Operations (unaudited)
----------------------------------- Nine Months Ended
-----------------------
Sept. 30, Sept. 30,
2008 2007
--------- ---------
Revenue $ 289,857 $ 214,571
Direct operating expenses 104,092 76,478
Drydock expense 9,826 8,539
General and administrative expenses 29,321 22,699
Depreciation and amortization expense 31,726 22,147
Gain on sale of assets (18,757) (10,393)
--------- ---------
Operating Income 133,649 95,101
Interest expense (7,268) (6,114)
Interest income 977 2,696
Foreign currency gain (loss) and other 2,323 222
--------- ---------
Income before income taxes 129,681 91,905
Income tax benefit (provision) (5,217) (5,599)
--------- ---------
Net Income $ 124,464 $ 86,306
========= =========
Earnings per share:
Basic $ 5.33 $ 3.85
Diluted $ 5.19 $ 3.73
Weighted average common shares 23,358 22,413
Weighted average diluted common shares 23,994 23,127
Operating Statistics
-------------------- Nine Months Ended
----------------------
Sept. 30, Sept. 30,
2008 2007
--------- ---------
Revenue by Region (000's)
-------------------------
North Sea based fleet $ 173,129 $ 169,782
Southeast Asia based fleet 57,497 28,103
Americas based fleet 59,231 16,686
Rates Per Day Worked
--------------------
North Sea based fleet $ 23,389 $ 22,684
Southeast Asia based fleet 17,062 9,254
Americas based fleet 16,164 11,072
Overall Utilization
-------------------
North Sea based fleet 93.9% 92.7%
Southeast Asia based fleet 93.2% 93.4%
Americas based fleet 91.7% 94.2%
Average Owned/Chartered Vessels
-------------------------------
North Sea based fleet 27.4 28.7
Southeast Asia based fleet 13.5 12.2
Americas based fleet 14.8 6.0
--------- ---------
Total 55.7 46.9
========= =========
Drydock Days
------------
North Sea based fleet 124 145
Southeast Asia based fleet 39 64
Americas based fleet 176 44
--------- ---------
Total 339 253
========= =========
Expenditures (000's) $ 9,826 $ 8,539
========= =========
Owned & Managed Vessels: Count by Reporting Segment
---------------------------------------------------
Southeast
North Sea Asia Americas Total
--------- --------- --------- ---------
Owned Vessels as of
June 30, 2008 28 13 6 47
--------- --------- --------- ---------
Rigdon Acquisition -- -- 22 22
Newbuild Deliveries -- 1 3 4
Sales (1) (2) -- (3)
Intersegment
Transfers -- (1) 1 --
--------- --------- --------- ---------
Owned Vessels as of
October 28, 2008 27 11 32 70
Managed Vessels 15 2 6 23
--------- --------- --------- ---------
Total Fleet as of
October 28, 2008 42 13 38 93
========= ========= ========= =========
As of As of
Balance Sheet Data (unaudited) ($000) Sept. 30, 2008 Dec. 31, 2007
------------------------------------- -------------- --------------
Cash and cash equivalents $ 39,451 $ 40,119
Working capital 84,685 83,556
Vessel and equipment, net 1,117,749 641,333
Construction in progress 132,577 112,667
Total assets 1,595,321 934,012
Long term debt 468,411 159,558
Shareholders' equity 886,966 676,091
-------------- --------------
Nine Months Nine Months
Ended Ended
Cash Flow Data (unaudited) ($000) Sept. 30, 2008 Sept. 30, 2007
--------------------------------- -------------- --------------
Cash flow from operating activities $ 131,931 $ 86,243
Cash flow used in investing
activities (215,726) (111,560)
Cash flow used in financing
activities 83,666 238