EX-1 2 exhibit.htm EXHIBIT

GulfMark Offshore Reports Record
4th Quarter 2005 Results

     March 8, 2006 - Houston - GulfMark Offshore, Inc. (NASDAQ:GMRK) today announced net income of $8.2 million, or $0.39 per diluted share on revenue of $51.6 million for the quarter ended December 31, 2005. This compares to net income of $8.9 million, or $0.44 per share (diluted) on revenue of $41.4 million for the fourth quarter of 2004. The fourth quarter 2004 results include an income tax benefit of $4.8 million, or $0.24 per diluted share resulting mainly from the release of deferred tax liabilities related to a tax audit.

     For the year ended December 31, 2005 net income was $38.4 million, or $1.86 per diluted share, on record revenue levels of $204.0 million. For the year ended December 31, 2004, the reported net loss was $4.6 million, or $(0.23) per diluted share. There were several financial adjustments made during 2004 that impacted the results: debt refinancing costs; tax benefits; and the cumulative effect of the accounting change from capitalizing and amortizing drydock costs to expensing such costs. Operating income for the year ended December 31, 2005 was $59.7 million compared to $15.9 million for the year ended December 31, 2004.

     The fourth quarter 2005 financial results, when compared to the same period in 2004, reflect the continuation of a dramatic turnaround in the market. Operating income for the three months ended December 31, 2005 was $13.1 million, 79% higher than the $7.3 million for the same period in 2004. The increase in operating income for the quarter was mainly driven by the 25% increase in revenue from $41.4 million in 2004 to $51.6 million in 2005. The increase in revenue resulted from: (1) increased day rates in all regions; (2) the addition of the Titan and Coloso late in the second quarter of 2005 and the addition of the Sea Intrepid in November 2005; (3) full year impact of the Highland Citadel purchased in December 2004; and (4) improved vessel utilization.

     Mr. Bruce Streeter, President and COO of the Company commented: "Our results for the fourth quarter and the year reflect continued strength in our primary markets. This is particularly true for the North Sea as well as those locations where we have repositioned our vessels to take advantage of the strengthening worldwide conditions. As we look ahead at 2006 and beyond, our overall contract outlook continues to improve as we have already secured approximately 75% contract cover for 2006 and 40% for 2007. This should not only help provide earnings stability, but also create a strong cash flow base as we embark on our recently announced new build program. In Southeast Asia, the continued high level of utilization in 2005 is indicative of the dynamic growth in that market. Recently, we commented on the typical low level of contract cover in Southeast Asia that we started the year with. I am pleased to announce that contract agreements now in place bring cover for that region to more than 42% for 2006 and almost 10% for 2007 compared to the 10% level for 2006 we had previously identified. In the Americas, a fully contracted market, the average day rate in 2005 is slightly below the year ago period; however, this is the result of a change in the mix of our equipment as we expand in the area and not reflective of any change in market dynamics.

GulfMark Offshore, Inc.
Press Release
March 8, 2006
Page 2

     In continuation of the Company's strategy to enhance earnings potential and build value, we committed to, and have begun to build, six new 10,600 BHP AHTS vessels. As we announced earlier in the year, these vessels are of a new design developed by the Company in conjunction with Keppel Singmarine. They incorporate attributes selected specifically to meet the needs of our customer base when the vessels enter the market. As a complement to the six new vessels, we also acquired two vessels already under construction, the Sea Guardian and the Sea Sovereign. These vessels are expected to deliver in the second and fourth quarters of 2006, respectively. Additionally, we are participating in a joint venture for the construction of two large platform supply vessels of the new Aker 09 design. These vessels are expected to deliver in the first and third quarters of 2007. Previous vessel additions were largely responsible for the dramatic improvement in 2005 earnings and we believe will continue to do so in years to come. The new build vessels reflect a disciplined approach to matching our equipment to our customers' needs. They will afford us significant increases in asset value while enhancing our earnings capacity at an exciting period of industry expansion. The year 2005 was a very strong year as we made great strides in earnings, in developing contractual relationships, and in expanding our areas of operations. We expect all of these factors will provide both stable forward earnings and growth potential as both our mix and type of ships continues to improve."

     At December, 2005 the Company had working capital of $34.9 million, including $24.2 million in cash. The Company had total long term debt of $247.7 million, consisting of $159.4 million of 7.75% senior notes, $8.6 million related to certain vessel mortgages, $0.3 million related to the Aker Joint Venture capital contribution (construction of the Aker PSV09 vessel), and $79.4 million under our revolving credit facilities.

     GulfMark will hold a conference call to discuss the earnings with analysts, investors and other interested parties at 9:00 A.M. EST/8:00 A.M. CST on March 9, 2006. 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 6002586.

     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.

Contact:          Edward A. Guthrie, Executive Vice President
                       E-mail: Ed.Guthrie@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 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.

GulfMark Offshore, Inc.
Press Release
March 8, 2006
Page 3

Statement of Operations

Three Months Ended
 

--------------------------------------------------------------
 

December 31, 2005

  

September 30, 2005

 

December 31, 2004
 

------------------

  

------------------

  

-----------------

Revenues

$51,588

  

$53,048

  

41,424

Direct operating expenses

22,567

  

20,044

  

19,252

Drydock expense

2,536

  

1,497

  

2,693

Bareboat charter expense

1,046

  

1,056

  

-

General and administrative expenses

5,184

  

4,684

  

5,273

Depreciation expense

7,161

  

7,260

  

6,904
 

------------------

  

------------------

  

-----------------

     Operating Income

13,094

  

18,507

  

7,302

Interest expense

(4,827)

  

(4,657)

  

(4,723)

Interest income

260

  

78

  

146

Foreign currency gain (loss) and other

790

  

162

  

1,350
 

------------------

  

------------------

  

-----------------

Income from continuing operations before income taxes

9,317

  

14,090

  

4,075

Income tax (provision) benefit

(1,140)

  

(1,058)

  

4,822
 

------------------

  

------------------

  

-----------------

     NET INCOME

$8,177

  

$13,032

  

$8,897
 

===========

  

===========

  

==========

Earnings per share:

Basic

$0.41

$0.65

$0.45

Diluted

$0.39

$0.63

$0.44

     Weighted average common shares

20,091

20,046

19,940

     Weighted average diluted common shares

20,787

20,723

20,417

GulfMark Offshore, Inc.
Press Release
March 8, 2006
Page 4

Operating Statistics

Three Months Ended
 

------------------------------------------------------------
 

December 31, 2005

  

September 30, 2005

  

December 31, 2004
 

------------------

  

----------------

  

-----------------

Revenues by Region (000's)

          

     North Sea based fleet

$39,160

  

$42,187

  

$31,694

     Southeast Asia based fleet

5,710

  

4,613

  

4,644

     Americas based fleet

6,718

  

6,248

  

5,086

Rates Per Day Worked

          

     North Sea based fleet

$14,974

  

$16,149

  

$14,134

     Southeast Asia based fleet

6,083

  

5,808

  

5,453

     Americas based fleet

11,277

  

10,294

  

11,449

Overall Utilization

         

     North Sea based fleet

93.6%

  

93.2%

  

83.2%

     Southeast Asia based fleet

94.9%

  

88.0%

  

93.7%

     Americas based fleet

95.4%

  

98.0%

  

98.0%

Average Owned/Chartered Vessels

          

     North Sea based fleet

31.0

  

31.0

  

29.3

     Southeast Asia based fleet

10.7

  

10.0

  

10.0

     Americas based fleet

7.0

  

7.0

  

5.0
 

------------------

  

----------------

  

-----------------

          Total

48.7

  

48.0

  

44.3
 

===========

  

==========

  

===========

Drydock Activity(1)

          

     North Sea based fleet

1

  

2

  

2

     Southeast Asia based fleet

1

  

2

  

1

     Americas based fleet

1

  

0

  

0
 

------------------

  

----------------

  

-----------------

          Total

3

  

4

  

3
 

===========

  

==========

  

===========

     Expenditures (000's)

$2,536

  

$1,497

  

$2,693
 

===========

  

==========

  

===========

 

At March 7, 2006

  

At March 15, 2005
 

-----------------------------------

  

---------------------------------
 

2006(3)

  

2007(3)

  

2005(3)

  

2006(3)
 

-------------

  

--------------

  

-------------

  

------------

Forward Contract Cover(2)

              

     North Sea based fleet

82.6%

  

41.9%

  

66.8%

  

37.3%

     Southeast Asia based fleet

42.7%

  

9.9%

  

60.2%

  

12.7%

     Americas based fleet

92.8%

  

73.5%

  

96.5%

  

78.5%
 

-------------

  

--------------

  

------------

  

------------

          Total

75.0%

  

39.2%

  

69.3%

  

38.2%
 

=========

  

=========

  

========

  

=========

(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).

GulfMark Offshore, Inc.
Press Release
March 8, 2006
Page 5

Statement of Operations

Twelve Months Ended
 

---------------------------------------
 

December 31, 2005

  

December 31, 2004
 

---------------

  

------------------

Revenues

$204,042

  

$139,312

Direct operating expenses

82,803

  

71,239

Drydock expense

9,192

  

8,966

Bareboat charter expense

3,864

  

1,410

General and administrative expenses

19,572

  

15,666

Depreciation expense

28,875

  

26,137
 

---------------

  

------------------

Operating Income

59,736

  

15,894

Interest expense

(19,017)

  

(17,243)

Interest income

569

  

276

Debt refinancing costs

-

  

(6,524)

Foreign currency gain (loss) and other

484

  

3,799
 

---------------

  

------------------

Income (loss) from continuing operations before income taxes and cumulative effect of change in accounting principle

41,772

  

(3,798)

Income tax (provision) benefit

(3,382)

  

6,476
 

---------------

  

------------------

Income before cumulative effect of change in accounting principle

38,390

  

2,678

Cumulative effect on prior years of change in accounting principle - net of $773 related tax effect

−

(7,309)
 

---------------

  

------------------

     NET INCOME (LOSS)

38,390

  

$(4,631)

==========

==========

Earnings per share:

     Basic - before cumulative effect of change in an accounting principle

$1.92

$0.13

     Cumulative effect on prior years of change in accounting principle

−

(0.36)

---------------

------------------

     Net income (loss)

$1.92

$(0.23)

     Diluted - before cumulative effect of change in accounting principle

$1.86

$0.13

     Cumulative effect on prior years of change in accounting principle

−

(0.36)

---------------

------------------

     Net income (loss)

$1.86

$(0.23)
       

     Weighted average common shares

20,031

  

19,938

     Weighted average diluted common shares

20,666

19,938

 

GulfMark Offshore, Inc.
Press Release
March 8, 2006
Page 6

Operating Statistics

Twelve Months Ended
 

--------------------------------------
 

December 31, 2005

  

December 31, 2004
 

-------------------

  

-----------------

Revenues by Region (000's)

      

     North Sea based fleet

$160,276

  

$103,190

     Southeast Asia based fleet

19,570

  

17,505

     Americas based fleet

24,196

  

18,617

Rates Per Day Worked

      

     North Sea based fleet

$15,530

  

$11,862

     Southeast Asia based fleet

5,849

  

5,137

     Americas based fleet

11,518

  

12,137

Overall Utilization

     

     North Sea based fleet

91.9%

  

80.9%

     Southeast Asia based fleet

91.6%

  

82.2%

     Americas based fleet

95.6%

  

91.6%

Average Owned/Chartered Vessels

      

     North Sea based fleet

30.8

29.4

     Southeast Asia based fleet

10.2

  

11.6

     Americas based fleet

6.2

  

4.6
 

------------------

  

-----------------

          Total

47.2

  

45.6
 

===========

  

===========

Drydock Activity(1)

      

     North Sea based fleet

10

  

9

     Southeast Asia based fleet

4

  

2

     Americas based fleet

3

  

1
 

----------------

  

---------------

          Total

17

  

12
 

===========

  

===========

     Expenditures (000's)

$9,192

  

$8,966
 

===========

  

===========

(1) Represents number of completed drydocks in period.

GulfMark Offshore, Inc.
Press Release
March 8, 2006
Page 7

Balance Sheet Data ($000)

As of December 31, 2005

As of December 31, 2004

-----------------------

------------------------

     Cash

$24,190

$17,529

     Working capital

34,941

7,948

     Vessel and equipment, net

485,417

520,574

     Construction in progress

25,029

18,404

     Total assets

613,915

632,718

     Long term debt

247,685

258,022

     Shareholders' equity

320,096

316,157

Cash Flow Data ($000)

Twelve Months Ended December 31, 2005

Twelve Months Ended December 31, 2004

-----------------------

------------------------

     Cash flow from operating activities

$64,913

$25,561

     Cash flow used in investing activities

(43,343)

(40,404)

     Cash flow (used in) provided by financing activities

(15,674)

23,005