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8-K - FORM 8-K - GULFMARK OFFSHORE INC | h85237e8vk.htm |
Exhibit 99.1
GulfMark
offshore
offshore
GulfMark Offshore Announces
Third Quarter 2011 Operating Results
Third Quarter 2011 Operating Results
HOUSTON, October 19, 2011 GulfMark Offshore, Inc. (NYSE: GLF) today reported net income of
$14.2 million, or $0.54 per diluted share, on revenues of $103.8 million for the quarter ended
September 30, 2011.
Bruce Streeter, President and CEO, commented, The third quarter benefited from increased pricing
and utilization in the North Sea, better pricing in the Americas and higher utilization in Asia.
Its encouraging to see quarterly revenue exceeding the $100 million mark. Thats an achievement we
have not seen in a couple of years. Looking back to the first quarter of this year, the business
has improved substantially as the year has progressed. As the signs of recovery continue in the
Gulf of Mexico and as the global economy finds its footing, we anticipate our business will
continue to improve over the next few years.
I think there are a couple of noteworthy items that should help in understanding the third quarter
results. The first is that we have largely completed our scheduled drydock program for the year,
and we expect to be very close to the $17 million figure we budgeted for 2011. This entailed moving
drydocks forward from the fourth quarter and resulted in drydock expense for the third quarter
being approximately $2 million higher than anticipated. Second, in Brazil, we experienced a
non-cash foreign currency charge of approximately $3 million. In addition, direct operating
expenses during the quarter were also higher than we anticipated. Some of the increase in expense
is related to the cost of moving and preparing vessels for contract changes, some related to
inflationary pressures in our international locations, and some related to a higher operating
activity level than we had planned.
Since reporting the second quarter results, we have announced the commissioning of the
construction of six new vessels intended for use in the North Sea, but with the potential for use
in other areas. We are extremely excited about these new vessels. Our customers continue to demand
technologically advanced offshore support vessels, and these vessels will meet their expectations.
Although this set of vessels is designed for the North Sea market, we continue to monitor market
developments throughout the world and are poised to make the best global investments for our
stockholders while maintaining a strong and secure balance sheet.
Consolidated Third Quarter Results
Consolidated revenue for the third quarter of 2011 was $103.8 million, an increase of 7%, or $6.9
million, from the second quarter. Consolidated operating income was $23.2 million, up $2.8 million
from the second quarter amount of $20.4 million. The increase in sequential quarterly operating
income was driven by higher overall average day rates, offset by higher operating expenses.
GulfMark Offshore, Inc.
Press Release
October 19, 2011
Page 2
Press Release
October 19, 2011
Page 2
Regional Results
In the North Sea region, revenue was $49.2 million, up $5.3 million from the second quarter. The
increase was driven by increases in both day rates and utilization. For the third quarter, the
average day rate in the North Sea region was up 7% and utilization was up 2 percentage points,
compared to the second quarter. The increase in revenue reflects the continued seasonal strength we
customarily see in the warmer North Sea months, as well as a tightening in the market for offshore
supply vessels.
Revenue for the Americas region was $37.9 million, a slight increase over the second quarter amount
of $37.4 million. The slight increase in revenue was driven by an increase in the average day rate
of approximately 4%, offset by a decrease in utilization of approximately 3 percentage points. The
decrease in utilization in the Americas region was largely due to having two vessels out of service
for a significant portion of the quarter to undergo a planned major renovation to lengthen the
vessels through a mid-body extension.
During the third quarter, revenue in the Southeast Asia region was $16.7 million, an increase of
approximately 6% over the second quarter amount. Revenue in Southeast Asia has continued to
gradually improve as a result of increasing utilization. Utilization was up approximately 5
percentage points compared to the second quarter, while the average day rate decreased slightly
over the same period.
Consolidated Operating Expenses
Direct operating expenses for the third quarter were $48.1 million, 3% above the second quarter
amount and 6% over the Companys previous guidance of $45.5 million per quarter. The increase
relates to higher costs for fuel and consumables, and the continued higher run rate in personnel
costs, principally in the Americas and North Sea regions. The Company currently expects direct
operating expenses in the fourth quarter of 2011 to be approximately $48 million. Consolidated
drydock expense was $5.7 million in the third quarter. The Company continues to expect full year
2011 drydock expense to be approximately $17.0 million, which results in approximately $1 million
of drydock expense anticipated during the fourth quarter. Consolidated general and administrative
expenses were $11.9 million for the third quarter, and year-to-date results are consistent with the
Companys anticipated average quarterly run rate for 2011 of $11.5 million.
Liquidity, Capital Commitments and Contract Cover
Cash flow from operations totaled $29.2 million in the third quarter of 2011. Cash on hand at
September 30, 2011 was $113.0 million, and as of that date there were no amounts drawn on the
Companys $175.0 million revolving credit facility. Total debt at September 30, 2011 was $301.5
million, and debt, net of cash on hand, was $188.5 million. Quarterly principal amortization on the
term-loan facility is $8.3 million.
GulfMark Offshore, Inc.
Press Release
October 19, 2011
Page 3
Press Release
October 19, 2011
Page 3
Capital expenditures during the third quarter totaled $10.1 million, which included $5.5 million of
progress payments on the construction of new vessels.
As of September 30, 2011, the Company had approximately $239 million of remaining capital
commitments related to the construction of six vessels. The cash commitment for this
program in the fourth quarter of 2011 is anticipated to be $30 million. Anticipated cash
commitments over the next three calendar years are as follows: $81 million in 2012; $121 million in
2013; and $7 million in 2014. The Company expects to fund the construction contract commitments
from cash on hand and cash generated by operations through 2014.
The total amount of capital expenditures for all of 2011 is anticipated to be $47 million. The
portion of the amount pertaining to the improvement and enhancement of existing vessels is
forecasted to be $11 million, and the portion of capital expenditures for the purchase of new
vessels is anticipated to be $36 million.
Total backlog of contracted revenue is $676 million.
Outlook
CEO Bruce Streeter commented on the outlook for the Company, stating, The continued sequential
quarterly improvement in our business is extremely encouraging and we continue to believe that the
recovery seen thus far in 2011 will continue throughout 2012 and beyond, although we may see some
typical seasonality in the fourth quarter of 2011 and the first quarter of 2012. Each of our
operating regions will continue to meet the demand of a very challenging marketplace, and I want to
thank all of our employees for their dedicated work to improve our operations and for working hard
to satisfy our customers.
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 Thursday, October 20, 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:
|
Michael Newman | |
Investor Relations | ||
E-mail:
|
Michael.Newman@GulfMark.com | |
(713) 963-9522 |
GulfMark Offshore, Inc.
Press Release
October 19, 2011
Page 4
Press Release
October 19, 2011
Page 4
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.
Press Release
October 19, 2011
Page 5
Press Release
October 19, 2011
Page 5
Three Months Ended | Nine Months Ended | |||||||||||||||||||
Operating Data (unaudited) | September 30, | June 30, | September 30, | September 30, | September 30, | |||||||||||||||
(in thousands, except per share data) | 2011 | 2011 | 2010 | 2011 | 2010 | |||||||||||||||
Revenue |
$ | 103,778 | $ | 96,911 | $ | 94,479 | $ | 281,978 | $ | 271,912 | ||||||||||
Direct operating expenses |
48,103 | 46,908 | 41,729 | 139,328 | 127,456 | |||||||||||||||
Drydock expense |
5,726 | 3,683 | 7,242 | 15,933 | 20,365 | |||||||||||||||
General and administrative
expenses |
11,859 | 10,910 | 10,236 | 34,192 | 33,423 | |||||||||||||||
Depreciation and
amortization expense |
14,896 | 14,982 | 14,492 | 44,554 | 42,444 | |||||||||||||||
(Gain) loss on sale of assets |
| | (5,201 | ) | 10 | (5,095 | ) | |||||||||||||
Impairment charge |
| | | | 97,665 | |||||||||||||||
Operating Income (Loss) |
23,194 | 20,428 | 25,981 | 47,961 | (44,346 | ) | ||||||||||||||
Interest expense |
(5,757 | ) | (5,630 | ) | (5,807 | ) | (17,114 | ) | (15,858 | ) | ||||||||||
Interest income |
195 | 119 | 597 | 379 | 739 | |||||||||||||||
Foreign currency gain (loss)
and other |
(2,803 | ) | 73 | (603 | ) | (2,786 | ) | 158 | ||||||||||||
Income before income taxes |
14,829 | 14,990 | 20,168 | 28,440 | (59,307 | ) | ||||||||||||||
Income tax benefit
(provision) |
(664 | ) | (1,699 | ) | (961 | ) | (2,151 | ) | 9,326 | |||||||||||
Net Income (Loss) |
$ | 14,165 | $ | 13,291 | $ | 19,207 | $ | 26,289 | $ | (49,981 | ) | |||||||||
Diluted earnings (loss) per
share |
$ | 0.54 | $ | 0.51 | $ | 0.73 | $ | 1.00 | $ | (1.96 | ) | |||||||||
Weighted average diluted
common shares |
25,989 | 25,949 | 25,737 | 25,922 | 25,512 | |||||||||||||||
Other Data |
||||||||||||||||||||
Revenue by Region (000s) |
||||||||||||||||||||
North Sea |
$ | 49,176 | $ | 43,836 | $ | 38,340 | $ | 128,411 | $ | 110,832 | ||||||||||
Southeast Asia |
16,660 | 15,678 | 17,867 | 47,873 | 50,535 | |||||||||||||||
Americas |
37,942 | 37,397 | 38,272 | 105,694 | 110,545 | |||||||||||||||
Rates Per Day Worked |
||||||||||||||||||||
North Sea |
$ | 21,358 | $ | 20,014 | $ | 17,637 | $ | 19,796 | $ | 16,965 | ||||||||||
Southeast Asia |
15,063 | 15,228 | 16,841 | 15,177 | 17,190 | |||||||||||||||
Americas |
14,766 | 14,217 | 15,830 | 14,401 | 14,165 | |||||||||||||||
Overall Utilization |
||||||||||||||||||||
North Sea |
96.5 | % | 94.1 | % | 91.6 | % | 92.6 | % | 93.5 | % | ||||||||||
Southeast Asia |
87.9 | % | 83.0 | % | 85.2 | % | 84.7 | % | 87.0 | % | ||||||||||
Americas |
81.5 | % | 84.3 | % | 76.0 | % | 78.8 | % | 82.5 | % | ||||||||||
Average Owned Vessels |
||||||||||||||||||||
North Sea |
25.0 | 25.0 | 25.7 | 25.0 | 25.1 | |||||||||||||||
Southeast Asia |
14.0 | 14.0 | 13.9 | 14.0 | 12.7 | |||||||||||||||
Americas |
35.0 | 35.0 | 35.0 | 35.0 | 35.4 | |||||||||||||||
Total |
74.0 | 74.0 | 74.6 | 74.0 | 73.2 | |||||||||||||||
Drydock Days |
||||||||||||||||||||
North Sea |
32 | 46 | 62 | 149 | 145 | |||||||||||||||
Southeast Asia |
52 | 42 | 17 | 106 | 139 | |||||||||||||||
Americas |
29 | 40 | 109 | 177 | 241 | |||||||||||||||
Total |
113 | 128 | 188 | 432 | 525 | |||||||||||||||
Drydock Expenditures (000s) |
$ | 5,726 | $ | 3,683 | $ | 7,242 | $ | 15,933 | $ | 20,365 | ||||||||||
GulfMark Offshore, Inc.
Press Release
October 19, 2011
Page 6
Press Release
October 19, 2011
Page 6
Three Months Ended | Nine Months Ended | |||||||||||||||||||
Summary Financial Data (unaudited) | September 30, | June 30, | September 30, | September 30, | September 30, | |||||||||||||||
(dollars in thousands) | 2011 | 2011 | 2010 | 2011 | 2010 | |||||||||||||||
Balance Sheet Data |
||||||||||||||||||||
Cash and cash equivalents |
$ | 112,966 | $ | 113,943 | $ | 87,941 | $ | 112,966 | $ | 87,941 | ||||||||||
Working capital |
134,498 | 131,738 | 98,296 | 134,498 | 98,296 | |||||||||||||||
Vessel and equipment, net |
1,150,994 | 1,187,292 | 1,202,595 | 1,150,994 | 1,202,595 | |||||||||||||||
Construction in progress |
11,111 | 3,869 | 3,422 | 11,111 | 3,422 | |||||||||||||||
Total assets |
1,463,448 | 1,505,107 | 1,474,588 | 1,463,448 | 1,474,588 | |||||||||||||||
Long-term debt (1) |
268,146 | 286,463 | 311,412 | 268,146 | 311,412 | |||||||||||||||
Stockholders equity |
973,801 | 987,155 | 927,583 | 973,801 | 927,583 | |||||||||||||||
(1) Current portion of long-term debt included in working capital |
||||||||||||||||||||
Cash Flow Data |
||||||||||||||||||||
Cash flows provided by
operating activities |
$ | 29,153 | $ | 20,001 | $ | 17,977 | $ | 54,195 | $ | 57,360 | ||||||||||
Cash flows provided by (used
in) investing activities |
(10,068 | ) | (3,412 | ) | 16,419 | (15,002 | ) | (45,870 | ) | |||||||||||
Cash flows provided by (used
in) financing activities |
(18,151 | ) | (8,210 | ) | 1,835 | (23,568 | ) | (15,394 | ) | |||||||||||
Forward Contract Cover -
Remainder of Current
Calendar Year |
||||||||||||||||||||
North Sea |
89 | % | 90 | % | ||||||||||||||||
Southeast Asia |
81 | % | 60 | % | ||||||||||||||||
Americas |
63 | % | 66 | % | ||||||||||||||||
Total |
75 | % | 73 | % | ||||||||||||||||
Forward Contract Cover -
Next Full Calendar Year |
||||||||||||||||||||
North Sea |
67 | % | 57 | % | ||||||||||||||||
Southeast Asia |
37 | % | 42 | % | ||||||||||||||||
Americas |
30 | % | 48 | % | ||||||||||||||||
Total |
43 | % | 50 | % | ||||||||||||||||
Vessel Count by Reporting
Segment
Southeast | ||||||||||||||||
North Sea | Asia | Americas | Total | |||||||||||||
Owned Vessels as of July
21, 2011 |
25 | 14 | 35 | 74 | ||||||||||||
Newbuild Deliveries |
| | | | ||||||||||||
Sales & Dispositions |
| | | | ||||||||||||
Owned Vessels as of
October 19, 2011 |
25 | 14 | 35 | 74 | ||||||||||||
Managed Vessels |
14 | 1 | | 15 | ||||||||||||
Total Fleet as of
October 19, 2011 |
39 | 15 | 35 | 89 | ||||||||||||