HOUSTON, April 30, 2008 (PRIME NEWSWIRE) -- GulfMark Offshore, Inc. (NYSE:GLF) today announced first quarter 2008 earnings of $1.40 per diluted share, surpassing results for any first quarter in the company's history and setting a new benchmark for the future. Highlights for the record period include:
* 1st quarter 2008 EPS of $1.40 represented a 67% increase over the 2007 comparable quarter of $0.84. * Revenues of $83.3 million for the 1st quarter 2008 grew 27% over the prior year 1st quarter. * Operating income of $34.4 million, before asset sale gains, improved 54% over the 1st quarter of 2007. * SE Asia day rates climbed to $14,335 in the 1st quarter of 2008, 66% over the comparable 2007 quarter. * Two new build vessels delivered on schedule during the quarter and started term contracts shortly thereafter.
Commenting on the results, Bruce Streeter, President and CEO, said, "We are extremely pleased to start the year with a record setting quarter. Generally, we expect seasonal weakness in the first quarter when lower demand coupled with our efforts to maximize the number of dry-docks accomplished during the quarter tend to reduce quarterly earnings levels. The North Sea short term market did display some normal seasonality. The positive developments in the supply vessel markets outside of the North Sea, however, and the evolving impact of our newly delivered vessels are responsible for our earnings growth year-over-year. This change from 2007 to 2008 is most dramatic in Southeast Asia where growth came largely from vessels previously delivered in 2007 and the partial contribution from one of the two vessels delivered in 2008. The second ship delivered in late March 2008 and, we are pleased to say, has started its initial job. Continued growth in the future is expected from a combination of the improved fleet size and profile in Southeast Asia, a continued strong market in the North Sea and the potential in other locations, notably Brazil.
"We continue to see reports indicating growth in E&P companies' budgets for 2008 and that trend is unlikely to change as oil prices continue to climb to record levels. We have also noted a number of long-term contracts for high specification drilling units extending well into the next decade. This factor recently led an industry analyst to conclude that the current global drilling cycle will continue for another five to seven years, clearly indicating an expectation for future growth in the demand for our services.
"We previously had indicated our intentions to mobilize two additional vessels to Brazil. The first of these vessels, the Highland Piper, was mobilized and modifications completed during the first quarter, thus allowing that vessel to start a multi-year contract with Petrobras in early April. The second vessel, the Sea Apache, after modifications, will mobilize to Brazil from Southeast Asia during the second or third quarter of this year to also work for Petrobras. Demand in Brazil is very interesting as the recent information release on the Carioca field, and several recent drilling rig extensions and contracts for new rigs, following closely after the earlier confirmations of the Tupi and Jupiter discoveries. Brazil will be an area of focus and demand growth as these large accumulations of oil and gas are brought to market and we are pleased to be able to expand our presence their ahead of this demand.
"Regarding our new build program, in addition to the Sea Apache and Sea Kiowa that delivered in the first quarter, ten additional vessels of four different designs are under construction. These designs have been incorporated in the new build program to take advantage of the requirements for various vessel type demands in the future. The final three vessels of the Keppel project in Singapore are scheduled for delivery within 2008 while the other seven vessels are scheduled to deliver in late 2009 and during 2010.
"In summary, our marketing strategy continues to pay dividends, as we shifted vessels to short-term work, including project work in West Africa, which reduced the impact of the North Sea seasonality. We also took advantage of this period to complete seven of the scheduled seventeen dry-docks planned for this year. Overall, the various markets we operate in, or will operate in, continue to show strength and improving fundamentals. The addition of the new construction vessels joining our fleet at a time when we are experiencing strong market expansion, robust demand and forward indicators of larger capital investments in the industry are all signs of the potential we see to increase shareholder value over the long-term."
Liquidity and Capital Commitments
Cash flow from operations totaled $23.0 million for the three months ended March 31, 2008, compared to $24.9 million for the same period in 2007. Liquidity at quarter-end was $252.7 million consisting of working capital of $77.7 million, including $16.2 million in cash, and the entire $175.0 million available under the revolving credit facility. Total debt at March 31, 2008 was $159.6 million, comprised solely of the 7.75% senior notes due 2014. Capital expenditures during the first quarter were $47.8 million, primarily related to the new build program, and were funded from cash on-hand and from operations supplemented by a short duration drawdown of $12.0 million under the revolving credit facility, which was repaid in full prior to quarter-end. Remaining cash commitments for 2008 under the new build program, comprising the ten vessels under construction, are approximately $55.1 million, and are expected to be funded from cash flow from operations and available cash.
Filing of 10-Q for First Quarter 2008
GulfMark will file its Form 10-Q for the first quarter 2008 with the Securities and Exchange Commission (SEC) on April 30, 2008. Those interested can access the filing though the Investor Relations section of GulfMark's web site at www.gulfmark.com or by going directly to the SEC's web site at www.sec.gov.
Conference Call Information
GulfMark will hold a conference call to discuss the earnings with analysts, investors and other interested parties at 1:30 P.M. EDT/12:30 P.M. CDT on Wednesday, April 30, 2008. 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 1st Quarter Earnings Conference Call. The conference call will also be available via audio webcast and can be accessed from the Investor Relations section of the company's website at www.gulfmark.com or at http://www.investorcalendar.com. The webcast will be available for replay through June 30, 2008. 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 44447121.
GulfMark and its subsidiaries provide marine transportation services to the energy industry through a fleet of sixty-three (63) 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, 2007. 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
-----------------------------
March 31, Dec. 31, March 31,
2008 2007 2007
------- ------- -------
Revenue $83,348 $91,455 $65,513
Direct operating expenses 27,698 31,908 24,914
Drydock expense 3,692 4,067 4,459
General and administrative expenses 8,777 9,612 6,633
Depreciation expense 8,748 8,476 7,107
Gain on sale of assets (3) (1,776) (5,013)
------- ------- -------
Operating Income 34,436 39,168 27,413
Interest expense (1,182) (1,809) (2,612)
Interest income 296 451 1,026
Foreign currency loss and other (150) (520) (102)
------- ------- -------
Income before income taxes 33,400 37,290 25,725
Income tax provision - regular (1,136) 2,991 (1,372)
Income tax provision - foreign tax
law changes -- (27,612) --
------- ------- -------
Net Income $32,264 $12,669 $24,353
======= ======= =======
Earnings per share:
Basic $ 1.43 $ 0.56* $ 1.09
Diluted $ 1.40 $ 0.55* $ 1.06
Earnings per share (Excluding Income
Tax Provision for Foreign Tax Law
Changes:
Basic $ 1.43 $ 1.79 $ 1.09
Diluted $ 1.40 $ 1.74 $ 1.06
Weighted average common shares 22,543 22,502 22,310
Weighted average diluted common shares 23,116 23,097 22,954
* Reflects the combined effect of the previously announced
retroactive tax law change enacted in Norway in addition to the new
revenue tax instituted in Mexico of $1.23 per Basic share and $1.19
per Diluted share
Operating Statistics Three Months Ended
-------------------- -----------------------------
March 31, Dec. 31, March 31,
2008 2007 2007
------- ------- -------
Revenue by Region (000's)
-------------------------
North Sea based fleet $60,508 $71,882 $51,668
Southeast Asia based fleet 16,228 13,154 8,704
Americas based fleet 6,612 6,419 5,141
Rates Per Day Worked
--------------------
North Sea based fleet $24,974 $28,324 $21,120
Southeast Asia based fleet 14,335 13,475 8,636
Americas based fleet 13,062 12,292 10,827
Overall Utilization
-------------------
North Sea based fleet 92.4% 93.0% 90.4%
Southeast Asia based fleet 96.8% 93.2% 95.4%
Americas based fleet 88.0% 97.0% 90.0%
Average Owned/Chartered Vessels
-------------------------------
North Sea based fleet 28.3 29.0 29.1
Southeast Asia based fleet 13.0 11.6 12.0
Americas based fleet 6.3 6.0 6.0
------- ------- -------
Total 47.6 46.6 47.1
======= ======= =======
Drydock Days
------------
North Sea based fleet 45 55 75
Southeast Asia based fleet 13 28 26
Americas based fleet 37 -- 30
------- ------- -------
Total 95 83 131
======= ======= =======
Expenditures (000's) $ 3,692 $ 4,067 $ 4,459
======= ======= =======
At At
April 15, 2008 April 30, 2007
--------------- ---------------
2008(2) 2009(3) 2007(2) 2008(3)
------ ------ ------ ------
Forward Contract Cover(1)
-------------------------
North Sea based fleet 90.1% 53.7% 74.1% 58.2%
Southeast Asia based fleet 75.1% 54.5% 45.8% 8.6%
Americas based fleet 95.5% 88.5% 100.0% 87.8%
------ ------ ------ ------
Total 87.2% 59.9% 69.7% 48.5%
------ ------ ------ ------
(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.
(2) Represents nine months (4/1-12/31).
(3) Represents full year (1/1-12/31).
As of As of
March 31, Dec. 31,
Balance Sheet Data (unaudited) ($000) 2008 2007
------------------------------------- -------- --------
Cash and cash equivalents $ 16,243 $ 40,119
Working capital 77,727 83,556
Vessel and equipment, net 670,912 641,333
Construction in progress 131,225 112,667
Total assets 982,122 934,012
Long term debt 159,575 159,558
Shareholders' equity 720,580 676,091
-------- --------
Three Three
Months Months
Ended Ended
March 31, March 31,
Cash Flow Data (unaudited) ($000) 2008 2007
--------------------------------- -------- --------
Cash flow from operating activities $ 23,002 $ 24,866
Cash flow used in investing activities (47,748) (11,948)
Cash flow used in financing activities 328 209