July 27, 2009
GulfMark Offshore reports increased revenues
GulfMark Offshore, Inc. (NYSE:GLF) has announced results of operations for the three and six months ended June 30, 2009. Net income for the second quarter of 2009 was $34.9 million, or $1.38 per diluted share, which includes a $0.03 per share gain on vessel sales.
Revenue for the second quarter of 2009 was $104.7 million, an increase of 28% over the same period in the prior year. Operating income, excluding special items, was $38.2 million in the second quarter of 2009, an increase of 26% over the same period in 2008. The increase was chiefly due to the July 1, 2008 acquisition of GulfMark Americas, which contributed revenue of $27.9 million and operating income of $5.2 million during the second quarter of 2009.
Operating income for the second quarter of 2009, excluding special items, decreased $5.0 million, or 12%, compared to the first quarter of 2009. Day rates and utilization in the North Sea and day rates in Southeast Asia increased during the second quarter, but these improvements were more than offset by a decrease in utilization and lower day rates in the Americas.
Revenues for the first six months of 2009 increased 29% over the same period in the prior year to $213.5 million, principally as a result of the acquisition of GulfMark Americas. Net income before special items was $67.3 million, or $2.66 per diluted share.
"Our strength has always been our combination of forward contract commitments and our strong operations in geographically diverse international locations," commented Bruce Streeter, president and CEO. "That international base provides more than 75% of our consolidated revenues and remains firmly in place. The addition last year of our Gulf of Mexico operations gave us better long-term balance and a larger market footprint, but it also added to our mix a business with a very strong connection to the U.S. natural gas market, and a tendency to be more volatile than our other regions.
"We are in a tougher market in the Gulf of Mexico than virtually anyone predicted," continued Mr. Streeter, "and at the same time we have seen weakness in the North Sea spot market, another important market for GulfMark. We are financially strong and have the ability to adjust to these market conditions. For example, in the North Sea we have managed to reduce our spot exposure and expect to have limited involvement in spot market during the remainder of 2009. Also, a number of recent term contract signings has helped reduce our spot exposure and will lead to higher contract cover.
"Other markets have held up well for us so far in 2009. Southeast Asia is an example where demand for our vessels is holding, and we had 100% utilization in June. The sixth and final Keppel vessel, the Sea Comanche, joined our fleet late last week and will head to Indonesia shortly to complete an existing three year contract.
"Recently we took delivery of the Tiger, a 181 foot fast supply vessel, the last of the new construction vessels from the Gulf of Mexico purchase, and we sold one vessel during the quarter that had been in lay-up: a special purpose vessel that has not been included in our published vessel counts, but which was located in the North Sea."
Cash flow from operations totaled $54.2 million for the three months ended June 30, 2009, compared to $53.6 million for the same period in 2008. Estimated cash commitments for the remainder of 2009 for the company's new build program total approximately $56.4 million and are expected to be funded from cash on hand. Cash on hand at quarter end was $165.9 million and $95.0 million is available under a $175.0 revolving credit facility. Total debt at June 30, 2009 was $468.2 million and $228.6 million of this total matures on June 30, 2010. The company says it currently anticipates refinancing the maturing portion of the debt in the second half of 2009 or, alternatively, simply repaying the debt at maturity through a combination of cash on hand, cash generated from operations over the next year, and revolver availability.