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8-K - FORM 8-K - GULFMARK OFFSHORE INC | h83699e8vk.htm |
Exhibit 99.1
GULFMARK
OFFSHORE
GulfMark Offshore Announces
Second Quarter 2011 Operating Results
Second Quarter 2011 Operating Results
HOUSTON, July 21, 2011 GulfMark Offshore, Inc. (NYSE: GLF) today reported net income of
$13.3 million, or $0.51 per diluted share, on revenues of $96.9 million for the quarter ended June
30, 2011.
Bruce Streeter, President and CEO, commented, Overall this has been an outstanding quarter and we
are proud of what our employees accomplished. Although all of us would like to see more activity in
the Gulf of Mexico, as we indicated on last quarters earnings conference call, we continue to see
encouraging short- and long-term trends in all of our regions. Despite limited offshore drilling
permits in the U.S. Gulf of Mexico, utilization in the Americas is up as we begin to see the
benefit of repositioning a significant portion of our U.S. flagged vessels to Trinidad and Brazil.
In our other regions of the world, we have concentrated on building our term contract position and
have taken advantage of strengthening markets. Direct operating expense has been higher during the
first half of 2011, in part because we repositioned vessels to achieve better overall operating
profitability, but as a result we incurred higher than estimated operating costs in locations such
as Brazil. On a consolidated basis, profitability increased meaningfully during the quarter and the
Companys long-term outlook continues to improve. New jack-ups, semi-submersibles and drillship
orders, combined with strong crude oil prices, support our optimistic view that customers will
increasingly demand technologically advanced offshore support vessels in the future.
Consolidated Second Quarter Results
Consolidated revenue for the second quarter of 2011 was $96.9 million, an increase of 19%, or $15.6
million, from the first quarter. Consolidated operating income was $20.4 million, up $16.1 million
from the first quarter amount of $4.3 million. The higher sequential quarterly operating income was
principally driven by higher revenue. Direct operating expenses were up on a sequential quarterly
basis; however, these increases were largely offset by sequentially lower drydock expense.
Regional Results
During the second quarter, the average day rate in the North Sea region was up 13% and utilization
was up 7 percentage points, resulting in an overall increase in revenue of $8.4 million over the
first quarter. The increase in revenue reflects the seasonal strength we customarily see in the
warmer North Sea months, combined with a tightening in the market for offshore supply vessels as
other market participants relocated vessels to regions outside of the North Sea.
Revenue for the Americas region was $37.4 million, an increase of 23%, or $7.0 million, from the
first quarter. The increase in revenue was attributable to a gain of 13 percentage points in
GulfMark Offshore, Inc.
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July 21, 2011
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July 21, 2011
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utilization, to 84% for the quarter, although the average day rate in the region was flat in
comparison. The low level of drilling activity in the U.S. Gulf of Mexico continues to negatively
impact the potential revenue of the Americas region, although during the second quarter of 2011
revenue for the U.S. Gulf of Mexico subregion was up $1.9 million over the prior quarter. For
vessels operating in the U.S. Gulf of Mexico, utilization increased to 69% during the second
quarter.
Revenue for the Southeast Asia region was $15.7 million for the second quarter of 2011, a slight
increase over the first quarter. Utilization and day rates were both consistent with the first
quarter of 2011.
Consolidated Operating Expenses
Direct operating expenses for the second quarter were $46.9 million, 6% above the first quarter
amount as well as the Companys anticipated 2011 quarterly run rate. The increase relates to higher
levels of maintenance activity and personnel costs in the Americas region. The Company expects
direct operating expenses for the remainder of 2011 to be approximately $45.5 million per quarter.
Consolidated drydock expense was $3.7 million in the second quarter. The Company continues to
expect full year 2011 drydock expense to be approximately $17.0 million. Consolidated general and
administrative expenses were $10.9 million for the second quarter, a decrease from the first
quarter amount, but consistent with the Companys anticipated average quarterly run rate for 2011
of $11.5 million per quarter.
Liquidity, Capital Commitments and Contract Cover
Cash flow from operations totaled $20.0 million in the second quarter of 2011. Cash on hand at June
30, 2011 was $113.9 million, and as of that date $10.0 million had been drawn on the Companys
$175.0 million revolving credit facility. Total debt at June 30, 2011 was $319.8 million, and debt,
net of cash on hand, was $205.9 million. Quarterly principal amortization on the term-loan facility
is $8.3 million. Capital expenditures during the second quarter totaled $3.4 million, and there are
currently no capital commitments related to the construction or purchase of vessels. Total capital
expenditures for all of 2011 pertaining to the improvement and enhancement of existing vessels are
forecasted to be $11.0 million. Total backlog of contracted revenue is $705.8 million.
Outlook
CEO Bruce Streeter commented on the outlook for the Company, stating, We continue to look to the
future with increasing optimism. The second quarters results help confirm our belief in an
improving market for our vessels over the near term. These improvements reinforce our commitment to
prepare the Company to take advantage of market opportunities in the likely event the industry
begins to experience an extended up cycle period. In addition, as we look at our fleet position and
our balance sheet strength, we believe we can safely increase our position to take advantage of
improving markets around the world. International vessel demand and operations continue to perform
well. The pace of new construction rig orders continues to be very strong, and
GulfMark Offshore, Inc.
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July 21, 2011
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July 21, 2011
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we intend to position GulfMark to be ready to service these next generation rigs with a growing
fleet of technologically advanced offshore support vessels.
Conference Call/Webcast Information
GulfMark will conduct a conference call to discuss the Companys earnings with analysts, investors
and other interested parties at 9:00 a.m. Eastern time on Friday, July 22, 2011. To participate in
the teleconference, investors in the U.S. should dial 1-877-317-6789 at least 10 minutes before the
start time and reference GulfMark. Canada-based callers should dial 1-866-605-3852, and
international callers outside of North America should dial 1-412-317-6789. The webcast of the
conference call also can be accessed by visiting the companys website, www.gulfmark.com. An audio
file of the earnings conference call will be available on the companys website approximately two
hours after the end of the call.
GulfMark Offshore, Inc. provides marine transportation services to the energy industry through a
fleet of offshore support vessels serving major offshore energy markets in the world.
Contact:
|
Quintin V. Kneen | |
Executive Vice President & Chief Financial Officer | ||
E-mail:
|
Quintin.Kneen@GulfMark.com | |
(713) 963-9522 |
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 risks,
uncertainties and other factors. Among the factors that could cause actual results to differ
materially are: the price of oil and gas and its 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 Companys filings with the SEC,
including the registration statement and the Companys Form 10-K for the year ended December 31,
2010. Consequently, the forward-looking statements contained herein should not be regarded as
representations that the projected outcomes can or will be achieved.
GulfMark Offshore, Inc.
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July 21, 2011
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Operating Data (unaudited) | Three Months Ended | Six Months Ended | ||||||||||||||||||
(in thousands, except per share data) | June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||
2011 | 2011 | 2010 | 2011 | 2010 | ||||||||||||||||
Revenue |
$ | 96,911 | $ | 81,289 | $ | 92,782 | $ | 178,200 | $ | 177,433 | ||||||||||
Direct operating expenses |
46,908 | 44,318 | 42,658 | 91,225 | 85,727 | |||||||||||||||
Drydock expense |
3,683 | 6,524 | 6,159 | 10,207 | 13,123 | |||||||||||||||
General and administrative expenses |
10,910 | 11,423 | 11,456 | 22,333 | 23,187 | |||||||||||||||
Depreciation and amortization expense |
14,982 | 14,675 | 13,977 | 29,658 | 27,952 | |||||||||||||||
(Gain) loss on sale of assets |
| 10 | 106 | 10 | 106 | |||||||||||||||
Impairment charge |
| | 97,665 | | 97,665 | |||||||||||||||
Operating Income (Loss) |
20,428 | 4,339 | (79,239 | ) | 24,767 | (70,327 | ) | |||||||||||||
Interest expense |
(5,630 | ) | (5,727 | ) | (5,062 | ) | (11,357 | ) | (10,051 | ) | ||||||||||
Interest income |
119 | 67 | 37 | 184 | 142 | |||||||||||||||
Foreign currency gain (loss) and other |
73 | (58 | ) | (1,020 | ) | 17 | 761 | |||||||||||||
Income before income taxes |
14,990 | (1,379 | ) | (85,284 | ) | 13,611 | (79,475 | ) | ||||||||||||
Income tax benefit (provision) |
(1,699 | ) | 212 | (5,447 | ) | (1,487 | ) | 10,287 | ||||||||||||
Net Income (Loss) |
$ | 13,291 | $ | (1,167 | ) | $ | (90,731 | ) | $ | 12,124 | $ | (69,188 | ) | |||||||
Diluted earnings (loss) per share |
$ | 0.51 | $ | (0.05 | ) | $ | (3.55 | ) | $ | 0.46 | $ | (2.72 | ) | |||||||
Weighted average diluted common shares |
25,949 | 25,679 | 25,546 | 25,885 | 25,470 | |||||||||||||||
Other Data |
||||||||||||||||||||
Revenue by Region (000s) |
||||||||||||||||||||
North Sea |
$ | 43,836 | $ | 35,399 | $ | 37,217 | $ | 79,235 | $ | 72,492 | ||||||||||
Southeast Asia |
15,678 | 15,535 | 16,841 | 31,213 | 32,668 | |||||||||||||||
Americas |
37,397 | 30,355 | 38,724 | 67,752 | 72,273 | |||||||||||||||
Rates Per Day Worked |
||||||||||||||||||||
North Sea |
$ | 20,014 | $ | 17,789 | $ | 16,478 | $ | 18,951 | $ | 16,621 | ||||||||||
Southeast Asia |
15,228 | 15,248 | 16,817 | 15,238 | 17,387 | |||||||||||||||
Americas |
14,217 | 14,194 | 13,486 | 14,207 | 13,428 | |||||||||||||||
Overall Utilization |
||||||||||||||||||||
North Sea |
94.1 | % | 87.1 | % | 95.1 | % | 90.6 | % | 94.5 | % | ||||||||||
Southeast Asia |
83.0 | % | 83.2 | % | 92.8 | % | 83.1 | % | 88.0 | % | ||||||||||
Americas |
84.3 | % | 70.5 | % | 91.7 | % | 77.4 | % | 85.7 | % | ||||||||||
Average Owned Vessels |
||||||||||||||||||||
North Sea |
25.0 | 25.0 | 25.2 | 25.0 | 24.8 | |||||||||||||||
Southeast Asia |
14.0 | 14.0 | 12.1 | 14.0 | 12.1 | |||||||||||||||
Americas |
35.0 | 35.0 | 35.3 | 35.0 | 35.7 | |||||||||||||||
Total |
74.0 | 74.0 | 72.6 | 74.0 | 72.5 | |||||||||||||||
Drydock Days |
||||||||||||||||||||
North Sea |
46 | 71 | 34 | 117 | 84 | |||||||||||||||
Southeast Asia |
42 | 11 | 61 | 54 | 122 | |||||||||||||||
Americas |
40 | 109 | 38 | 148 | 132 | |||||||||||||||
Total |
128 | 191 | 132 | 319 | 337 | |||||||||||||||
Drydock Expenditures (000s) |
$ | 3,683 | $ | 6,524 | $ | 6,159 | $ | 10,207 | $ | 13,123 | ||||||||||
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Summary Financial Data (unaudited) | Three Months Ended | Six Months Ended | ||||||||||||||||||
(dollars in thousands) | June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||
2011 | 2011 | 2010 | 2011 | 2010 | ||||||||||||||||
Balance Sheet Data |
||||||||||||||||||||
Cash and cash equivalents |
$ | 113,943 | $ | 105,516 | $ | 49,794 | $ | 113,943 | $ | 49,794 | ||||||||||
Working capital |
131,738 | 117,106 | 58,459 | 131,738 | 58,459 | |||||||||||||||
Vessel and equipment, net |
1,187,292 | 1,193,407 | 1,165,956 | 1,187,292 | 1,165,956 | |||||||||||||||
Construction in progress |
3,869 | 3,018 | 30,215 | 3,869 | 30,215 | |||||||||||||||
Total assets |
1,505,107 | 1,485,458 | 1,413,231 | 1,505,107 | 1,413,231 | |||||||||||||||
Long-term debt (1) |
286,463 | 294,779 | 309,728 | 286,463 | 309,728 | |||||||||||||||
Stockholders equity |
987,155 | 965,135 | 871,924 | 987,155 | 871,924 |
(1) | Current portion of long-term debt included in working capital. |
Cash Flow Data
Cash flow from operating activities |
$ | 20,001 | $ | 5,041 | $ | 17,448 | $ | 25,042 | $ | 39,383 | ||||||||||
Cash flow used in investing activities |
(3,412 | ) | (1,522 | ) | (7,116 | ) | (4,934 | ) | (62,289 | ) | ||||||||||
Cash flow (used in) from financing activities |
(8,210 | ) | 2,793 | (7,787 | ) | (5,417 | ) | (17,229 | ) |
Forward Contract Cover Remainder of Current Calendar Year
North Sea |
79 | % | 75 | % | ||||
Southeast Asia |
56 | % | 73 | % | ||||
Americas |
64 | % | 46 | % | ||||
Total |
68 | % | 61 | % | ||||
Forward Contract Cover Next Full Calendar Year
North Sea |
60 | % | 45 | % | ||||
Southeast Asia |
23 | % | 43 | % | ||||
Americas |
29 | % | 36 | % | ||||
Total |
38 | % | 40 | % | ||||
Vessel Count by Reporting Segment
Southeast | ||||||||||||||||
North Sea | Asia | Americas | Total | |||||||||||||
Owned Vessels as of April 25, 2011 |
25 | 14 | 35 | 74 | ||||||||||||
Newbuild Deliveries |
| | | | ||||||||||||
Sales & Dispositions |
| | | | ||||||||||||
Owned Vessels as of July 21, 2011 |
25 | 14 | 35 | 74 | ||||||||||||
Managed Vessels |
14 | 1 | | 15 | ||||||||||||
Total Fleet as of July 21, 2011 |
39 | 15 | 35 | 89 | ||||||||||||