February 26, 2008
GulfMark Offshore reports record results
GulfMark Offshore, Inc. (NYSE:GLF) reports record setting fourth quarter and full year 2007 operating results.
President and CEO Bruce Streeter said the results "both exceeded our internal goals and the investment community's expectations by a wide margin."
"As we begin 2008," noted Mr. Streeter, "market conditions remain favorable for our continued success. Global energy demand continues to drive worldwide E&P expenditures to double-digit annual growth, with leading industry research forecasting a 16% increase in international spending in 2008, the ninth consecutive year of growth. New areas for exploration continue to focus on deeper waters in harsh and remote areas requiring support of more capable and in many cases newer vessels. To that end, our new build program is geared to deliver vessels that will meet or exceed our customer's needs in the future. One of these new builds was delivered early this year in Southeast Asia, the AHTS Sea Apache, and began a long-term contract immediately thereafter. We currently have eleven new vessels under construction, with four more slated for delivery this year.
"We continually monitor market conditions to determine the optimal mix of term versus spot contract coverage. Today, our forward contract cover, a measure of the days vessels are under contract or option, stands at over 82% for 2008, the highest coverage at this point in a given year since we began tracking the statistic," said Mr. Streeter. "This level of cover represents well over $260 million in revenues and provides a stable earnings and cash flow base while providing the upside potential from opportunities in our primary market areas."
"Overall, we believe we have advantageously positioned ourselves to maximize financial results through our fleet renewal and modernization programs as well as our focus on international markets and expanding specialty applications. We are confident that, through execution of our strategic plan, we will continue to increase shareholder value over the long-term."
Liquidity and Capital Commitments
Cash flow from operations totaled $128.6 million for the twelve months ended December 31, 2007, compared to $104.9 million for the same period in 2006. Liquidity at quarter-end was $258.6 million consisting of working capital of $83.6 million, including $40.1 million in cash, and the entire $175.0 million available under the revolving credit facility. Total debt at December 31, 2007 was $159.6 million, comprised solely of the 7.75% senior notes due 2014. Cash from operations plus cash on hand have been used to fund $191.2 million in capital expenditures during 2007, primarily related to the new build program. Commitments for 2008 under the new build program comprising 12 vessels, one of which delivered in January 2008, are approximately $98.7 million, and are expected to be funded from cash flow from operations and available cash.