HOUSTON, Aug. 8, 2005 (PRIMEZONE) -- GulfMark Offshore, Inc. (Nasdaq:GMRK) today announced the strongest second quarter results in Company history of $8.3 million in net income, or $0.40 per share (diluted) on record quarterly revenues of $51.3 million. This compares to a net loss of ($1.1) million, or ($0.06) per share (diluted) on revenue of $32.2 million for the second quarter of 2004. Operating income of $13.1 million for the second quarter of 2005 was the second highest on record, surpassed only by the $15.1 million in the first quarter of 2005 when dry dock expenditures were $2.1 million lower than the $3.6 million in the current quarter.
Mr. Bruce Streeter, President and COO of the company commented: "Our results for the quarter were consistent with the view we expressed when we reported the previous quarter. The record-breaking revenues reported in the second quarter reflect the strong day rates and higher utilization in all of our operating regions, especially the North Sea. In this region, which continues to comprise a significant part of our business, recent rates on term contracts are above the levels attained in any previous period and appear to be trending upward. We expect the balance of 2005 and 2006 to show continued improvement as our contract cover, both for the second half of 2005 and all of 2006, is well above our historic high levels reached in 2001-2002. Drilling rig fixtures are extending well into the future with contracts into 2007 and beyond repeatedly being identified by both operators and drilling contractors. Forward commitments by these operators are indicative of the underlying strength of our primary markets which has resulted in our continued ability to contract vessels on improved terms. Our contract cover, or backlog, is at the highest point we can remember at this time in any year and, while this limits the upside to some extent in the remainder of the year, it does lock in meaningful forward revenue. We expect to see continued growth in earnings power throughout the balance of 2005 through vessel rollovers, the full period effect of the two additional vessels and profit sharing opportunities on already contracted vessels. After having limited opportunity to complete dockings in the first quarter, we did manage to complete a larger number of dry docks during the second quarter, thus bringing us past the mid-point in the year's plan. The increase in related dry dock expense did result in operating income below last quarter's all time high; however, completing the dry dockings and shifting a number of vessels to new contracts during the second quarter will better position us for the rest of the year.
"At the end of May 2005 two vessels (Coloso and Titan) mobilized to Mexico and immediately began operating on long term contracts. We believe these contracts will serve as the foundation for future development of our business in the region. As previously announced, we have two vessels currently being constructed in China with one expected to deliver in the fourth quarter of this year and the other in mid-2006. These vessels most likely will be deployed in Southeast Asia where there is a growing requirement for newer, more technologically advanced vessels. These vessels, in addition to the units previously transferred to the region, will enhance and expand our capacity to meet customer needs in Southeast Asia. In the North Sea, we will soon begin construction of our next generation supply vessel, in conjunction with a shipyard partner, which we believe will further strengthen our position as an innovator in the industry. These new vessels will provide us with the additional resources to meet the continued growth in demand for supply vessel services in the international markets."
The second quarter 2005 financial results, when compared to the same period in 2004, reflect the significant turnaround in the market. The 59% increase in revenue from $32.2 million to $51.3 million, and three-fold increase in operating income from $3.1 million to $13.1 million, quarter over quarter versus 2004, are primarily the result of: (1) increased day rates in all regions; (2) the addition of new vessels including the full year effect of the Austral Abrolhos delivered in the third quarter of 2004, the Highland Citadel delivered late in 2004, and the addition of the Titan and Coloso late in the second quarter of 2005; and (3) improved vessel utilization. Improved day rates were the single most significant factor comprising $11.9 million or 62.3% of the increase, while the addition of the new vessels and the second quarter of 2004 repositioning of vessels accounted for $5.3 million, or 27.7 % of the increase. The balance of the increase related to increased North Sea and Southeast Asia utilization.
At June 30, 2005 the company had working capital of $26.2 million, including $26.1 million in cash and cash equivalents. The company had total debt of $259.8 million, consisting of $159.4 million of 7.75% senior notes, $15.4 million related to certain vessel mortgages, and $85.0 million under our revolving credit facilities.
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 Tuesday, August 9, 2005. Those interested in participating in the conference call should call 800/682-5640 (816/650-0621, if outside the U.S. and Canada) 5-10 minutes in advance of the start time and ask for the GulfMark conference. The conference call will also be available via audio web cast at http://www.vcall.com. A telephonic replay of the conference call will be available for 4 days, starting approximately 1 hour after the completion of the call, and can be accessed by dialing 800/252-6030 (international calls should use 402/220-2491) and entering access code 43534282.
GulfMark Offshore, Inc. provides marine transportation services to the energy industry through a fleet of fifty-six (56) 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 the Company 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 Company's filings with the SEC. Consequently, the forward-looking statements contained herein should not be regarded as representations that the projected outcomes can or will be achieved.
(in 000's except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
Statement of Operations -------------------- -------------------
(unaudited)
------------------------
2005 2004 2005 2004
-------- -------- -------- --------
Revenues $51,340 $32,237 $99,406 $63,796
Direct operating expenses 21,036 16,926 40,192 35,541
Drydock expense 3,610 2,299 5,159 5,024
Bareboat charter expense 1,382 573 1,763 1,410
General and administrative
expenses 4,987 2,995 9,703 6,071
Depreciation expense 7,256 6,367 14,454 12,788
-------- -------- -------- --------
Operating Income (Loss) 13,069 3,077 28,135 2,962
Interest expense (4,763) (4,099) (9,533) (8,239)
Interest income 183 54 231 84
Foreign currency gain
(loss) and other 568 (213) (468) (308)
-------- -------- -------- --------
Income (loss) before
income taxes and
cumulative effect of
change in accounting
principle 9,057 (1,181) 18,365 (5,501)
Income tax (provision)
benefit (803) 65 (1,184) (506)
-------- -------- -------- --------
Income (loss) before
cumulative effect of
change in accounting
principle 8,254 (1,116) 17,181 (6,007)
Cumulative effect on prior
years of change in
accounting principle
- net of $773 related tax
effect -- -- -- (7,309)
-------- -------- -------- --------
NET INCOME (LOSS) $ 8,254 $(1,116) $17,181 $(13,316)
======== ======== ======== ========
Earnings per share:
-------------------
Basic - before cumulative
effect of change in an
accounting principle $ 0.41 $ (0.06) $ 0.86 $ (0.30)
Cumulative effect on
prior years of change
in accounting principle
-- -- -- (0.37)
-------- -------- -------- --------
Net income (loss) $ 0.41 $ (0.06) $ 0.86 $ (0.67)
Diluted - before
cumulative effect of
change in accounting
principle $ 0.40 $ (0.06) $ 0.83 $ (0.30)
Cumulative effect on
prior years of change
in accounting principle
-- -- -- (0.37)
-------- -------- -------- --------
Net income (loss) $ 0.40 $ (0.06) $ 0.83 $ (0.67)
Weighted average common
shares 20,041 19,942 20,019 19,937
Weighted average diluted
common shares 20,639 19,942 20,653 19,937
As of As of
Balance Sheet Data (unaudited) June 30, December 31,
------------------------------ 2005 2004
---------------- ----------------
Cash and cash equivalents $26,133 $17,529
Working capital 26,221 7,948
Vessel and equipment, net 505,440 520,574
Total assets 609,466 632,718
Long term debt 247,451 258,022
Shareholders' equity 311,328 316,157
Six Months Ended Six Months Ended
Cash Flow Data (unaudited) June 30, June 30,
-------------------------- 2005 2004
---------------- ----------------
Cash flow from operating
activities $26,116 $ 6,889
Cash flow used in investing
activities (8,323) (6,467)
Cash flow used in financing
activities (8,982) (587)
Three Months Ended Six Months Ended
Operating Statistics June 30, June 30,
-------------------- ------------------ ----------------
2005 2004 2005 2004
------------------ ----------------
Revenues by Region (000's)
North Sea based fleet $40,469 $23,967 $78,929 $46,546
Southeast Asia based fleet 4,790 4,427 9,247 8,993
Americas based fleet 6,081 3,843 11,230 8,257
Rates Per Day Worked
North Sea based fleet $16,068 $10,935 $16,154 $10,707
Southeast Asia based fleet 5,679 4,761 5,709 4,960
Americas based fleet 13,382 11,674 12,530 12,158
Overall Utilization
North Sea based fleet 90.8% 81.0% 90.4% 74.4%
Southeast Asia based fleet 94.4% 78.4% 92.1% 81.6%
Americas based fleet 89.3% 91.9% 94.2% 94.4%
Average Owned/Chartered
Vessels
North Sea based fleet 31.0 29.7 30.7 30.1
Southeast Asia based fleet 10.0 13.0 10.0 12.7
Americas based fleet 5.7 4.0 5.3 4.0
------- ------- ------- -------
Total 46.7 46.7 46.0 46.8
======= ======= ======= =======
Drydock Activity(1)
-------------------
North Sea based fleet 4 5 7 9
Southeast Asia based fleet
-- 1 -- 1
Americas based fleet
3 1 3 1
------- ------- ------- -------
Total 7 7 10 11
======= ======= ======= =======
Expenditures (000's) $3,610 $2,299 $5,159 $5,024
======= ======= ======= =======
At June 30, 2005 At June 30, 2004
------------------ -------------------
2005(3) 2006(4) 2004(3) 2005(4)
------- ------- ------- -------
Forward Contract Cover(2)
-------------------------
North Sea based fleet 84% 49% 62% 35%
Southeast Asia based fleet 58% 10% 63% 23%
Americas based fleet 100% 93% 76% 40%
------- ------- ------- -------
Total 81% 47% 64% 33%
======= ======= ======= =======
(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 (7/1-12/31).
(4) Represents full year (1/1-12/31).