GulfMark Offshore Reports Record 4th Quarter and Full Year 2006 Results
HOUSTON, GulfMark Offshore,
Inc. (NasdaqGS:GMRK) today announced net income of $30.6 million,
or $1.42 per diluted share on revenue of $69.0 million for
the quarter ended December 31, 2006. This compares to net
income of $8.2 million, or $0.39 per diluted share on revenue
of $51.6 million for the fourth quarter of 2005. The current
quarter includes a $3.6 million, or $0.17 per diluted share),
gain on the previously announced sale of the Sentinel.
For the year ended December 31, 2006 net income was a record
$89.7 million, or $4.28 per diluted share, on record revenue
levels of $250.9 million. For the year ended December 31,
2005, the reported net income was $38.4 million, or $1.86
per diluted share. Operating income for the year ended December
31, 2006 was $107.3 million compared to $59.7 million for
the year ended December 31, 2005. The 2006 results include
$10.2 million, or $0.49 per diluted share in gains on the
sale of two of the older vessels in the fleet, the Highland
Patriot and the Sentinel. The fourth quarter 2006 financial results, when compared
to the same period in 2005, reflect the continued strength
in the market. Operating income for the three months ended
December 31, 2006 was $34.0 million, compared to $13.1 million
for the same period in 2005. The increase in operating income
for the quarter was mainly driven by the 34% increase in
revenue from $51.6 million in 2005 to $69.0 million in 2006.
The increase in revenue resulted mainly from higher day
rates, and the addition of the new vessels, the Sea Intrepid
for the full year, and the Sea Guardian and Sea Sovereign
for a portion of the year, partially offset by the lost
revenue from the vessels sold. Bruce Streeter, President and CEO of the Company commented:
``The year 2006 exceeded our expectations from the outset
and continued throughout the year. Our results for the fourth
quarter were bolstered by demand and day rates which carried
over from the strong summer and fall periods in the North
Sea and steady demand in our other markets. The addition
of the two new vessels in Southeast Asia continues to add
to our capabilities to meet the growing demands of our customers
in that region. We have set a number of records from both
an earnings and operating perspective which will serve as
a foundation for the years to come. As a result, our balance
sheet is the strongest in our history and will allow us
to take advantage of growth opportunities as and when they
occur. As we look to 2007 and beyond, our overall contract cover
continues to remain strong with our contract cover for 2007
and 2008 approximately 70% and 42%, respectively. This will
help provide earnings stability and create a strong cash
flow as we continue on our new build program. The new build
program reflects a disciplined approach to matching our
equipment to our customers' needs, increases asset value
and enhances our earnings potential. In 2007, four of our
nine new build vessels are scheduled to be delivered. Two
of the new design PSV's in the North Sea are due to be delivered
at the end of the first and fourth quarters. Toward the
end of the third quarter, we anticipate delivery in Southeast
Asia of the Sea Supporter while the first of the as yet
unnamed AHTS's being built in Singapore is anticipated to
be delivered during the fourth quarter. We expect demand
for vessel services to remain strong throughout all of our
markets during 2007 and believe that our strategy of both
growing and replacing our fleet with vessels suited to a
variety of support applications is the prudent way to continue
to build shareholder value in the long term.`` At December, 2006 the Company had working capital of $104.9
million, including $82.8 million in cash. The Company repaid
all of the $83.2 million due under the revolving credit
facility during the fourth quarter and at December 31 had
only $159.5 million of 7.75% senior notes outstanding as
long-term debt. GulfMark will hold a conference call to discuss the earnings
with analysts, investors and other interested parties at
8:30 A.M. EST/7:30 A.M. CST today, February 26, 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 conference. The conference call will also be
available via audio web cast at http://www.vcall.com or
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
7925412. GulfMark Offshore, Inc. provides marine transportation services
to the energy industry through a fleet of fifty-nine (59)
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.
Statement of Operations
----------------------- Three Months Ended
---------------------------------------
December 31, September 30, December 31,
2006 2006 2005
-------- -------- --------
Revenues $ 68,982 $ 75,831 $ 51,588
Direct operating expenses 24,147 23,450 22,567
Drydock expense 1,206 1,507 2,536
Bareboat charter expense -- -- 1,046
General and administrative
expenses 6,249 6,126 5,184
Depreciation expense 7,021 7,033 7,161
Gain on sale of assets (3,597) (6,640) --
-------- -------- --------
Operating Income 33,956 44,355 13,094
Interest expense (3,417) (3,797) (4,827)
Interest income 698 134 260
Foreign currency gain
(loss) and other (166) 373 790
-------- -------- --------
Income before income taxes 31,071 41,065 9,317
Income tax provision (491) (1,213) (1,140)
-------- -------- --------
NET INCOME $ 30,580 $ 39,852 $ 8,177
======== ======== ========
Earnings per share:
-------------------
Basic $ 1.47 $ 1.96 $ 0.41
Diluted $ 1.42 $ 1.91 $ 0.39
Weighted average
common shares 20,840 20,300 20,091
Weighted average
diluted common shares 21,505 20,855 20,787
Operating Statistics
-------------------- Three Months Ended
---------------------------------------
December 31, September 30, December 31,
2006 2006 2005
-------- -------- --------
Revenues by Region (000's)
North Sea based fleet $55,217 $65,523 $39,160
Southeast Asia based fleet 8,567 7,741 5,710
Americas based fleet 5,198 5,567 6,718
Rates Per Day Worked
North Sea based fleet $20,194 $23,366 $14,974
Southeast Asia based fleet 8,525 7,094 6,083
Americas based fleet 10,898 10,809 11,277
Overall Utilization
North Sea based fleet 96.7% 96.9% 93.6%
Southeast Asia based fleet 92.7% 99.1% 94.9%
Americas based fleet 88.5% 95.9% 95.4%
Average Owned/Chartered Vessels
North Sea based fleet 30.1 31.0 31.0
Southeast Asia based fleet 12.0 11.9 10.7
Americas based fleet 6.0 6.0 7.0
------- ------- -------
Total 48.1 48.9 48.7
======= ======= =======
Drydock Activity(1)
North Sea based fleet -- 2 1
Southeast Asia based fleet 1 -- 1
Americas based fleet 1 -- 1
------- ------- -------
Total 2 2 3
======= ======= =======
Expenditures (000's) $ 1,206 $ 1,507 $ 2,536
======= ======= =======
At February 23, 2007 At March 1, 2006
-------------------- ------------------
2007(3) 2008(3) 2006(3) 2007(3)
------ ------ ------ ------
Forward Contract Cover(2)
------------------------
North Sea based fleet 76.9% 49.3% 82.6% 41.9%
Southeast Asia
based fleet 39.8% 8.5% 42.7% 9.9%
Americas based fleet 100.0% 78.7% 92.8% 73.5%
Total 69.8% 41.9% 75.0% 39.2%
(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 full year (1/1-12/31).
Statement of Operations Twelve Months Ended
------------------------ ------------------------
December 31,
2006 2005
--------- ---------
Revenues $ 250,921 $ 204,042
Direct operating expenses 91,874 82,803
Drydock expense 9,049 9,192
Bareboat charter expense -- 3,864
General and administrative expenses 24,504 19,572
Depreciation expense 28,470 28,875
Gain on sale of assets (10,237) --
--------- ---------
Operating Income 107,261 59,736
Interest expense (15,648) (19,017)
Interest income 1,263 569
Foreign currency gain (loss) and other (95) 484
--------- ---------
Income before income taxes 92,781 41,772
Income tax provision (3,052) (3,382)
--------- ---------
NET INCOME $ 89,729 $ 38,390
========= =========
Earnings per share:
-------------------
Basic $ 4.40 $ 1.92
Diluted principle $ 4.28 $ 1.86
Weighted average common shares 20,377 20,031
Weighted average diluted common shares 20,975 20,666
Operating Statistics Twelve Months Ended
-------------------- ------------------------
December 31,
2006 2005
--------- ---------
Revenues by Region (000's)
-------------------------
North Sea based fleet $199,368 $160,276
Southeast Asia based fleet 27,385 19,570
Americas based fleet 24,168 24,196
Average Rates Per Day Worked
----------------------------
North Sea based fleet $ 19,164 $ 15,530
Southeast Asia based fleet 7,062 5,849
Americas based fleet 11,014 11,518
Overall Utilization
-------------------
North Sea based fleet 94.9% 91.9%
Southeast Asia based fleet 92.3% 91.6%
Americas based fleet 96.0% 95.6%
Average Owned/Chartered Vessels
-------------------------------
North Sea based fleet 30.4 30.8
Southeast Asia based fleet 11.7 10.2
Americas based fleet 6.4 6.2
--------- ---------
Total 48.5 47.2
======== ========
Drydock Activity(1)
------------------
North Sea based fleet 12 10
Southeast Asia based fleet 5 4
Americas based fleet 2 3
--------- ---------
Total 19 17
======== ========
Expenditures (000's) $ 9,049 $ 9,192
======== ========
(1) Represents number of completed drydocks in period.
Balance Sheet Data ($000) As of December 31,
-------------------------- -------------------------
2006 2005
-------- --------
Cash and Cash Equivalents $ 82,759 $ 24,190
Working capital 104,948 36,219
Vessel and equipment, net 524,676 485,417
Construction in progress 47,313 25,029
Total assets 750,829 613,915
Long term debt 159,490 247,685
Stockholders' equity 541,428 320,096
Cash Flow Data ($000) Twelve Months Ended
----------------------- -------------------------
2006 2005
-------- --------
Cash flow from operating activities $104,869 $ 64,913
Cash flow used in investing activities (28,300) (43,343)
Cash flow used in financing activities (20,679) (15,674)
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