<PAGE>
<PAGE>1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 000-22853
GULFMARK OFFSHORE, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 76-0526032
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5 POST OAK PARK, SUITE 1170 77027
Houston, Texas
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(713) 963-9522
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the Registrant was required to file such reports)
and (2) has been subject to such filing requirements for the past 90
days. YES / / NO /X/
Number of shares of Common Stock, $0.01 Par Value, outstanding as of
July 21, 1997: 6,765,893.
(Exhibit Index Located on Page 24)<PAGE>
<PAGE>2
GENERAL INFORMATION
This Quarterly Report on Form 10-Q for the quarter ended June 30,
1997, represents the first quarterly report of GulfMark Offshore, Inc.
("GulfMark" or the "Company") following the completion of a series of
restructuring transactions completed on May 1, 1997. As a result of
those transactions, the operations of the Company currently consist of
the offshore marine services business. Management's Discussion and
Analysis of Financial Condition and Results of Operations, which
follows the financial statements and notes thereto, contains a
description of the transactions, as well as a discussion of the
results of operations for the quarter and six months ended June 30,
1997.
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The unaudited condensed consolidated financial statements included
herein have been prepared by the Company and reflect all adjustments,
consisting of normal recurring adjustments, which the Company
considers necessary for the fair presentation of such financial
statements for the periods indicated, including presentation of the
net assets and operations of the non-offshore marine services business
of the Company's predecessor as discontinued operations. Certain
information relating to the Company's organization and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles has been
condensed or omitted in this Form 10-Q pursuant to applicable rules
and regulations. However, the Company believes that the disclosures
herein are adequate to make the information presented not misleading.
It is recommended that these financial statements be read in
conjunction with the financial statements and notes thereto included
in the Company's Registration Statement on Form S-1 No. 333-31139
filed with the Securities and Exchange Commission July 11, 1997.
2<PAGE>
<PAGE>3
GULFMARK OFFSHORE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION> June 30, December 31,
1997 1996
--------- -------
(Unaudited)
<S> <C> <C>
ASSETS (In thousands)
CURRENT ASSETS:
Cash and cash equivalents............................................... $ 5,931 $ 17,234
Accounts receivable..................................................... 12,784 8,939
Inventory, prepaids and other........................................... 645 675
------- -------
Total current assets.................................................. 19,360 26,848
NET ASSETS OF DISCONTINUED OPERATIONS..................................... -- 14,837
VESSELS AND EQUIPMENT, at cost, net of accumulated depreciation
of $21,440,000 (unaudited) in 1997 and $19,504,000 in 1996............... 97,556 87,405
OTHER ASSETS.............................................................. 3,440 2,217
------- -------
$ 120,356 $ 131,307
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings and current portion of long-term debt............. $ 14,012 $ 9,341
Accounts payable........................................................ 2,337 1,931
Other accrued liabilities............................................... 3,028 1,628
------- -------
Total current liabilities............................................. 19,377 12,900
------- -------
LONG-TERM DEBT............................................................ 47,970 50,811
DEFERRED TAXES AND OTHER.................................................. 5,896 5,079
MINORITY INTEREST......................................................... 475 501
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value; 15,000,000 shares authorized;
6,765,893 and 6,679,904 shares issued and outstanding................. 68 67
Additional paid-in capital.............................................. 27,015 26,793
Retained earnings....................................................... 20,790 36,676
Cumulative translation adjustment....................................... (1,235) (1,520)
------- -------
Total stockholders' equity............................................ 46,638 62,016
------- -------
$ 120,356 $ 131,307
======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
3<PAGE>
<PAGE>4
GULFMARK OFFSHORE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- ---------------------
1997 1996 1997 1996
------- ------- ------- ------
(In thousands, except per share amounts)
<S> <C> <C> <C> <C>
REVENUES............................................... $11,352 $ 7,870 $ 21,031 $ 14,493
COSTS AND EXPENSES:
Direct operating expenses............................ 4,584 3,641 8,886 7,282
General and administrative expenses.................. 1,389 1,140 2,670 2,106
Depreciation and amortization........................ 1,680 1,151 3,284 2,264
------- ------- ------- -------
7,653 5,932 14,840 11,652
------- ------- ------- -------
OPERATING INCOME....................................... 3,699 1,938 6,191 2,841
OTHER INCOME (EXPENSE):
Interest expense..................................... (1,390) (946) (2,616) (1,744)
Interest income...................................... 121 76 215 131
Minority interest.................................... (37) (11) 26 46
Other................................................ (1) 26 18 29
------- ------- ------- -------
(1,307) (855) (2,357) (1,538)
------- ------- ------- -------
Income from continuing operations before taxes......... 2,392 1,083 3,834 1,303
INCOME TAX PROVISION................................... 722 361 1,120 371
------- ------- ------- -------
INCOME FROM CONTINUING OPERATIONS...................... 1,670 722 2,714 932
INCOME (LOSS) FROM DISCONTINUED OPERATIONS,
NET OF TAXES.......................................... -- 34 (648) (129)
LOSS ON DISPOSAL OF DISCONTINUED OPERATIONS,
NET OF TAXES.......................................... -- -- (1,426) --
------- ------- ------- -------
NET INCOME............................................. $ 1,670 $ 756 $ 640 $ 803
======= ======= ======= =======
EARNINGS PER SHARE:
Income from continuing operations..................... $ 0.24 $ 0.11 $ 0.40 $ 0.14
Income (loss) from discontinued operations,
net of taxes........................................ -- -- (0.10) (0.02)
Loss on disposal of segment, net of taxes............ -- -- (0.21) --
------- ------- ------- -------
$ 0.24 $ 0.11 $ 0.09 $ 0.12
======= ======= ======= =======
WEIGHTED AVERAGE COMMON SHARES AND COMMON STOCK
EQUIVALENTS.......................................... 6,933 6,672 6,807 6,672
======= ======= ======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
4<PAGE>
<PAGE>5
GULFMARK OFFSHORE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
----------------------
1997 1996
------- ---------
(In thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income................................................................ $ 640 $ 803
Loss from discontinued operations, net.................................... 2,074 129
------- -------
Income from continuing operations......................................... 2,714 932
Adjustments to reconcile income from continuing operations to
net cash provided by continuing operations:
Depreciation and amortization............................................ 3,281 2,264
Deferred and other income tax provision.................................. 882 456
Minority interest........................................................ (26) (47)
Change in operating assets and liabilities:
Accounts receivable.................................................. (2,665) (933)
Inventory, prepaids and other........................................ 51 (749)
Accounts payable..................................................... 446 (115)
Other accrued liabilities............................................ 101 33
Other, net............................................................... 35 48
------- -------
Cash provided by continuing operations............................... 4,819 1,889
Cash flow used in discontinued operations............................ (1,360) (797)
------- -------
Net cash provided by operating activities............................ 3,459 1,092
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of vessels and equipment....................................... (15,422) (12,932)
Expenditures for drydocking and main engine overhaul..................... (2,238) (997)
------- -------
Net cash used in investing activities................................ (17,660) (13,929)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of options........................................ 223 --
Proceeds from debt, net of direct financing cost......................... 7,086 12,411
Repayments of debt....................................................... (3,966) (1,344)
------- -------
Net cash provided by financing activities............................ 3,343 11,067
Effect of exchange rate changes on cash.................................. (445) 26
------- -------
NET DECREASE IN CASH AND CASH EQUIVALENTS.................................. (11,303) (1,744)
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD....................... 17,234 5,136
------- -------
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD............................. $ 5,931 $ 3,392
======= =======
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid.............................................................. $ 2,463 $ 1,485
======= =======
Income taxes paid.......................................................... $ 26 $ 53
======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
5<PAGE>
<PAGE>6
GULFMARK OFFSHORE, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(1) BACKGROUND AND ORGANIZATION
On April 30, 1997, the stockholders of GulfMark International,
Inc. (the "Predecessor") approved a transaction (the "Contribution")
to transfer the assets, liabilities and operations of its offshore
marine services business (the "Marine Business") to GulfMark Offshore,
Inc. ("GulfMark" or the "Company"), a new wholly owned subsidiary of
the Predecessor. Immediately after the Contribution of the Marine
Business, the Predecessor completed a spin-off of GulfMark by
distributing all of the common stock of GulfMark to the Predecessor's
stockholders (the "Distribution"). Following the Distribution, on May
1, 1997, a subsidiary of Energy Ventures, Inc. (now known as EVI, Inc.
("EVI")) was merged (the "Merger") with and into the Predecessor,
whose assets then consisted principally of the Predecessor's remaining
active business, the erosion control business ("Ercon"), and the
Predecessor's investment in approximately 2.2 million shares of EVI
common stock. The Predecessor survived the Merger as a subsidiary of
EVI.
Although the separation of the Marine Business from the remainder
of the operations of the Predecessor was structured as a "spin-off" of
GulfMark for legal, tax and other reasons, GulfMark succeeded to
certain important aspects of the Predecessor's business, organization
and affairs, namely: (i) the Marine Business conducted by GulfMark,
which consisted of over half of the assets, revenues and operating
income of the businesses, operations and companies previously
constituting the Predecessor; (ii) each member of the Board of
Directors of the Predecessor became a Director of GulfMark; (iii)
GulfMark's management is substantially the same as the management of
the Predecessor; and (iv) GulfMark retained as its headquarters the
former headquarters of the Predecessor. Consequently, the Condensed
Consolidated Financial Statements present the net assets, results of
operations and cash flows of Ercon and the EVI investment as
discontinued operations.
Prior years' financial statements have been reclassified where
appropriate to conform to 1997 presentations.
6<PAGE>
<PAGE>7
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Pending Accounting Pronouncements
In February 1997, the Financial Accounting Standards Board issued
SFAS No. 128 "Earnings Per Share" which will be effective after
December 15, 1997. SFAS NO. 128 revises the methodology to be used in
computing earnings per share ("EPS") such that the computations
required for primary and fully diluted EPS are to be replaced with
"basic" and "diluted" EPS. Basic EPS is computed by dividing net
income by the weighted average number of shares of common stock
outstanding during the year. Diluted EPS is computed in the same
manner as fully diluted EPS, except that, among other changes, the
average share price for the period is used in all cases when applying
the treasury stock method to potentially dilutive outstanding options.
The statement requires restatement for all prior period EPS data
presented. Management does not believe the adoption of SFAS No. 128
will have a material effect on the Company's computation or
presentation of earnings per share.
(3) VESSEL ACQUISITIONS
In December 1994, the Company contracted with a shipyard in
Norway for the construction of two UT 755 design vessels for
deployment in the North Sea. The first vessel, the Highland Piper,
was delivered on March 15, 1996. The second vessel, the Highland
Drummer was delivered on January 3, 1997. Included in capital
expenditures for the six months ended June 30, 1997 is $12,850,000
related to the final construction payment on the Highland Drummer.
Funding for this payment was provided through additional borrowings of
approximately $7,254,000 under an existing British Pound Sterling bank
facility. In connection with the delivery of these two vessels, the
Company is entitled to receive a subsidy from the Norwegian government
equal to 9.5% of the gross construction price. The Company has
accounted for subsidies as a reduction of the purchase price of the
vessels.
The Company has entered into a contract with a shipyard to
construct an enhanced UT 755 design platform supply vessel ("PSV") at
a price of approximately $18 million denominated in Norwegian Kroner.
The new vessel (Highland Rover) will be a modified version of the
Company's recently delivered Highland Piper (March 1996) and Highland
Drummer (January 1997). This new vessel is a multipurpose design
which adds dynamic positioning and additional length and
accommodations to the standard UT 755 design. This vessel, scheduled
for delivery in the first quarter of 1998, will be available to
participate in the growing demand for deepwater, remotely operated
vehicle ("ROV") support, standard supply duties and specialized
services in the North Sea.
7<PAGE>
<PAGE>8
In connection with the final payment to the shipyard for the
Highland Rover, the Company entered into a forward contract to hedge
approximately 92.8 million Norwegian Kroner (approximately $13.9
million) of its commitment on the Highland Rover against unfavorable
fluctuations in the British Pound Sterling to Norwegian Kroner
exchange rate. Upon delivery, any gain or loss under the hedging
contract (a loss of approximately $1.6 million as of June 30, 1997)
will be included in the cost of the vessel, but will be offset by the
corresponding change in the price of the vessel due to the exchange
rate fluctuation.
The Company purchased in April 1997 an unfinished supply vessel
hull, for which design and shipyard pricing have already commenced
(the "Gallant Project"). The Company anticipates that this vessel
will be delivered in 1998. The hull could be completed as a PSV or an
anchor handling, towing and supply ("AHTS") vessel, although the
Company currently believes that the most attractive potential
application may be as a multipurpose support vessel for the floating
production, storage and offloading ("FPSO") market. For a variety of
economic reasons, exploration and production companies are
increasingly employing FPSO structures in lieu of conventional fixed
platform installations. The FPSO market typically employs more
technologically advanced vessels capable of performing multiple
functions, potentially under longer term (even "life of field")
charters. The Company believes that the low cost (estimated at $11-14
million) and early delivery date of the Gallant Project should provide
the Company with a significant competitive advantage in serving the
growing FPSO market.
(4) DISCONTINUED OPERATIONS
The following selected financial information for discontinued
operations relates to the operations of Ercon and the investment in
2.2 million shares of EVI common stock, is presented for informational
purposes only and does not necessarily reflect what the results of
operations would have been had such discontinued operations
operated as a stand-alone entity.
Summary Operating Data of Discontinued Operations
<TABLE>
<CAPTION>
Six Months Ended
June 30,
-------------------------
1997 1996
-------- --------
(In Millions)
<S> <C> <C>
Total revenue............................ $ 1.1 $ 1.6
Income (loss) before income taxes........ $ (.7) $ (.2)
</TABLE>
8<PAGE>
<PAGE>9
(5) SUBSEQUENT EVENT
On July 11, 1997 the Company filed a Registration Statement on
Form S-1 No. 333-31139 with the Securities and Exchange Commission for
the offer and sale of one million shares of Common Stock of the
Company (excluding 125,000 shares subject to underwriters'
over-allotment option), which Registration Statement has not yet
become effective. The offering will be underwritten by Lehman
Brothers Inc., Jefferies & Company, Inc. and The Robinson-Humphrey
Company, Inc. These securities may not be sold nor may offers to buy
be accepted prior to the time the Registration Statement becomes
effective. This quarterly report on Form 10-Q shall not constitute an
offer to sell or the solicitation of an offer to buy nor shall there
be any sale of these securities in any State in which such offer,
solicitation or sale would be unlawful prior to registration or
qualifiction under the securities laws of any such State.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Company was incorporated on December 4, 1996 under the name
of "New GulfMark, Inc.", a wholly owned subsidiary of GulfMark
International, Inc. (the "Predecessor"). The Company was formed to
facilitate the Predecessor's separation of its international offshore
marine services business from its only U.S. business operation, Ercon,
and its large holding of common stock of Energy Ventures, Inc. (now
known as EVI, Inc. ("EVI")). In order to accomplish this separation,
the Predecessor agreed to transfer the assets, liabilities and
operations of its offshore marine services business to the Company
(the "Contribution"). On April 30, 1997, the Contribution occurred,
and the offshore marine services business was separated from the
Predecessor through the distribution of all of the then outstanding
Common Stock of the Company to the Predecessor's stockholders (the
"Distribution"). Following the Distribution, on May 1, 1997, a
subsidiary of EVI was merged (the "Merger") with and into the
Predecessor, whose assets then consisted principally of Ercon and its
investment in approximately 2.2 million shares of EVI common stock.
Immediately after the Merger, the Predecessor ceased public trading of
its common stock.
In connection with the Distribution, two shares of the Company's
Common Stock were issued for each share of the Predecessor's common
stock. Also, in connection with the Merger, the Predecessor's
stockholders received shares of EVI common stock.
The Company's operations currently consist of the offshore marine
services business, which represents over half of the assets, revenues
and operating income of the businesses, operations and companies
previously constituting the Predecessor. Consequently, the following
Management's Discussion and Analysis of Financial Condition and
9<PAGE>
<PAGE>10
Results of Operations, and the Condensed Consolidated Financial
Statements included elsewhere herein, present the net assets and
results of operations of Ercon and the common stock of EVI owned by
the Predecessor as discontinued operations of the Company for all
periods presented.
Unless otherwise indicated, references to "GulfMark" or the
"Company" are (i) for all periods through April 30, 1997, the
effective date of the Contribution and Distribution, to the
Predecessor and its consolidated subsidiaries (treating Ercon and the
investment in EVI as discontinued operations for all periods), and
(ii) for all periods subsequent to April 30, 1997, to GulfMark
Offshore, Inc. and its consolidated subsidiaries.
The Company provides marine support and transportation services
to companies involved in the offshore exploration and production of
oil and natural gas. The Company's vessels transport drilling
materials, supplies and personnel to offshore facilities, as well as
move and position drilling structures. The majority of its operations
are conducted in the North Sea and, with the exception of one vessel
operating in Brazil, the balance of the Company's operations are
conducted in Southeast Asia. The Company's fleet has grown in size
and capability from an original 11 vessels acquired in late 1990 to
its present level of 30 vessels through strategic acquisitions and new
construction of technologically advanced vessels, partially offset by
dispositions of certain older, less profitable vessels. Twenty-one
vessels in GulfMark's fleet are owned, two are bareboat chartered and
seven are managed. The two bareboat charters run through August 1998.
The Company's results of operations are affected primarily by day
rates, fleet utilization and the number and type of vessels in its
fleet. These factors are driven by trends within the oil and natural
gas exploration and production industry, which generally affect the
demand for vessels, as well as by trends impacting the broader economy
and capital markets, which generally affect the supply of vessels.
While offshore support vessels service existing oil and natural gas
production platforms and exploration and development activities,
incremental demand depends primarily upon drilling activity, which, in
turn is related to both short-term and long-term trends in oil and
natural gas prices. As a result, trends in oil and natural gas prices
may significantly affect fleet utilization and day rates.
An additional factor affecting operating earnings is the mix of
vessels owned versus bareboat chartered by the Company. Owned and
bareboat chartered vessels generate operating revenues and may incur
expenses at similar rates. However, chartered vessels also incur
bareboat charter hire expense instead of depreciation expense, which
is generally less than charter hire expense.
10<PAGE>
<PAGE>11
In addition, the Company provides management services to other
vessel owners for a fee. Charter revenues and vessel expenses of such
vessels are not included in the Company's operating results, but
management fees are included in operating revenues. These vessels,
the Company's only crewboat and a standby rescue vessel that was
chartered by the Company through December 31, 1996, have been excluded
for purposes of calculating fleet rates per day worked and utilization
in the applicable periods.
The Company's operating costs are primarily a function of fleet
size and utilization levels. The most significant direct operating
costs are wages paid to vessel crews, maintenance and repairs and
marine insurance. Generally, fluctuations in vessel utilization
affect only that portion of the Company's direct operating costs that
is incurred when the vessels are active. As a result, direct
operating costs as a percentage of revenues may vary substantially due
to changes in day rates and utilization.
In addition to these variable costs, the Company incurs fixed
charges related to the depreciation of its fleet and costs for routine
drydock inspections, maintenance and repairs designed to ensure
compliance with applicable regulations and maintaining certifications
for its vessels with various international classification societies.
Maintenance and repair expenses and marine inspection amortization
charges are generally determined by the aggregate number of
drydockings and other repairs undertaken in a given period. Costs
incurred for drydock inspection and regulatory compliance are
capitalized and amortized over the period between such drydockings,
typically two to three years.
Under applicable maritime regulations, vessels must be drydocked
twice in a five-year period for inspection and routine maintenance and
repair. Should the Company undertake a large number of drydockings in
a particular fiscal period, comparative results may be affected. For
the six months ended June 30, 1997, the Company completed the
drydocking of nine vessels at an aggregate cost of $2.2 million, as
compared to five drydockings at an aggregate cost of $1.0 million in
the comparable period of 1996.
The Company contracted with a Norwegian shipyard in December 1994
for the construction of two UT 755 design platform supply vessels
("PSVs") for deployment in the North Sea. Delivery of the first
vessel, the Highland Piper, was made on March 15, 1996. The second
vessel, the Highland Drummer, was delivered January 3, 1997. The
Company made the final payment on the Highland Piper and interim
construction payments on the Highland Drummer (a total of $11.5
million) during 1996 and a final payment on the Highland Drummer of
$12.9 million in 1997. Funding of $7.3 million in 1997 was provided
11<PAGE>
<PAGE>12
by additional borrowings under existing credit facilities.
In August 1996, the Company purchased six offshore supply vessels
in Southeast Asia from Maritime (Pte), Limited (the "Maritime
Acquisition"). Funding for the Maritime Acquisition was provided
through a new $7.0 million bank facility and a drawdown under existing
loan facilities.
On November 1, 1996, the Company entered into a contract with a
Norwegian shipyard to construct the Highland Rover, an enhanced UT 755
design PSV, at a price of approximately $18.0 million denominated in
Norwegian Kroner. This new vessel, scheduled for delivery in March
1998, will be available to participate in the growing demand for
deepwater ROV support, standard supply duties and specialized services
in the North Sea. The Company made interim construction payments of
$0.9 million in 1996 and is required to make an additional $2.7
million of such payments in 1997, of which $0.9 million was made in
April 1997. Final payment is due upon delivery of the vessel. The
Company anticipates financing the cost of the vessel through some
combination of additional borrowings, proceeds from the offering of
1,000,000 shares of Common Stock of the Company and existing funds.
In March 1997, the Company entered into a contract to hedge 92.8
million Norwegian Kroner (approximately $13.9 million) of its
commitment on the Highland Rover against unfavorable fluctuations in
the British Pound Sterling to Norwegian Kroner exchange rate. Upon
delivery, any gain or loss under the hedging contract (a loss of
approximately $1.6 million as of June 30, 1997) will be included in
the cost of the vessel, but will be offset by the corresponding change
in the price of the vessel due to the exchange rate fluctuation.
Results of Operations
The table below sets forth, by region, the average day and
utilization rates for the Company's vessels and the average number of
vessels owned or chartered during the periods indicated. These
vessels generate substantially all of the Company's revenues and
operating profit. The information detailed below is utilized by the
Company's management to evaluate the performance of the business.
12<PAGE>
<PAGE>13
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
--------------- ---------------
1997 1996 1997 1996
------ ------ ------ ------
<S> <C> <C> <C> <C>
Rates Per Day Worked (a)(b):
North Sea Fleet (c) $10,283 $8,529 $9,949 $7,964
Southeast Asia Fleet(d) 3,756 3,327 3,657 3,320
Overall Utilization(a)(b):
North Sea Fleet 96.8% 92.5% 94.9% 93.8%
Southeast Asia Fleet(d) 69.7% 76.5% 63.5% 78.6%
Average Owned/Chartered Vessels(a)(e)
North Sea Fleet 9.0 8.0 9.0 7.6
Southeast Asia Fleet(d) 13.0 7.0 13.0 7.0
------ ------ ------ ------
Total 22.0 15.0 22.0 14.6
====== ====== ====== ======
</TABLE>
- ----------------------
(a) Includes all owned or bareboat chartered PSVs and AHTS vessels.
The Company's only crewboat and only standby rescue vessel
(which was chartered until December 31, 1996) are excluded, as are all
managed vessels.
(b) Rates per day worked is defined as total charter revenues divided by
number of days worked and utilization rate is total days worked
divided by total days in the period.
(c) Revenues for vessels in the North Sea fleet is earned in Sterling
(GBP) and has been converted to US Dollars (US$) at the average
exchange rate (US$/GBP) for the periods indicated. The average
rates were GBP=$1.6365 and GBP=$1.5250 for the quarters ended June 30,
1997 and June 30, 1996, respectively. The average exchange rates for the
six months ended June 30, 1997 and 1996 were GBP=$1.6344 and GBP=$1.5284,
respectively.
(d) Includes the vessel operating in Brazil.
(e) Adjusted for vessel additions and dispositions occurring during
each period.
Comparison of the Three Months Ended June 30, 1997 with the Three
Months Ended June 30, 1996.
Changes to the Company's fleet were significant between the two
periods. A newly constructed large PSV, the Highland Drummer, was
added to the North Sea fleet on January 3, 1997. The Southeast Asia
fleet operated with an additional six vessels in the three months
ended June 30, 1997 as compared to the three months ended June 30,
1996, as a result of the Maritime Acquisition in August 1996.
Revenues and earnings for the quarter ended June 30, 1997
increased sharply as compared to the quarter ended June 30, 1996.
Income from continuing operations was $1.7 million, or $0.24 per
share, as compared to $0.7 million, or $0.11 per share, for the same
period in 1996. Revenues increased $3.5 million, or 44%.
13<PAGE>
<PAGE>14
Approximately 60% of the revenue increase and 75% of the increase
in income from continuing operations came from the North Sea fleet. In
excess of 50% of the increase in North Sea fleet earnings is
attributable to the addition of the Highland Drummer in January 1997
and a 52% increase in the day rate for the Highland Pride. The
balance of the increases came from broadly improved day rates in the
region partially offset by an increase in operating costs. The
average day rate for the fleet was up approximately 20% from the
corresponding period in the prior year. The rates benefited both from
improved market conditions which accounted for 12% of the increase and
a favorable move in the Sterling to U.S. Dollar exchange rate which
accounted for the remaining 8% of the increase. The average
utilization rate for this fleet increased from 93% in the quarter
ended June 30, 1996 to 97% in the quarter ended June 30, 1997.
In Southeast Asia, revenues doubled to $2.7 million, almost
entirely due to the addition of the six vessels in the Maritime
Acquisition. Also contributing to the improvement was an increase in
the average day rate for the fleet.
The increase in general and administrative expenses of
approximately $0.2 million was attributable to the addition of staff
to support the increased size of the Company's Singapore operations
and to provide additional support for construction and project work
Company-wide.
Increases in depreciation of $0.5 million and interest expense of
$0.4 million were both related to the addition of the new vessel in
the North Sea and the six additional vessels in Southeast Asia.
Comparison of the Six Months Ended June 30, 1997 with the Six Months
Ended June 30, 1996.
Changes to the Company's fleet were significant between the two
periods. Two large PSVs, the Highland Piper and the Highland Drummer,
were purchased and added to the Company's North Sea fleet on March 15,
1996 and January 3, 1997, respectively, while vessels under management
decreased by one. Management of the large PSV Safe Truck was added to
the fleet, while contracts to manage two other specialty vessels were
terminated. The Southeast Asia fleet operated with an additional six
vessels in the six months ended June 30, 1997 compared to the six
months ended June 30, 1996, as a result of the Maritime Acquisition in
August 1996.
14<PAGE>
<PAGE>15
Revenues and earnings for the six months ended June 30, 1997
increased sharply as compared to the six months ended June 30, 1996.
Income from continuing operations was $2.7 million, or $0.40 per
share, as compared to $0.9 million, or $0.14 per share, for the same
period in 1996. Revenues increased $6.5 million, or 45%, from the
comparable period.
Two-thirds of the revenue increase and substantially all of the
increase in income from continuing operations for the first six months
of 1997, as compared to the first six months of 1996, came from the
North Sea fleet. In excess of 50% of the increase in revenue
and one-third of the increased earnings were attributable to the
additions of the Highland Piper in March 1996 and the Highland Drummer
in January 1997. The balance of the increases came from broadly
improved day rates in the region. The average day rate for the fleet
was up approximately 25% from the corresponding period of the prior
year. The rates benefited both from improved market conditions which
accounted for 17% of the increase and a favorable move in the
Sterling to U.S. Dollar exchange rate which accounted for the
remaining 8% of the increase. The average utilization rate for this
fleet increased from 94% in the 1996 period to 95% in the 1997 period.
In Southeast Asia, revenues increased approximately 80%, or $2.2
million, and vessel earnings increased more than 70%, or $0.7 million,
due to the addition of six vessels in the Maritime Acquisition. The
average day rate for the fleet improved but the improvement has come
at the expense of lower utilization.
The increase in general and administrative expenses of
approximately $0.6 million was attributable to the addition of staff
to support the increased size of the Company's Singapore operations
and to provide additional support for construction and project work
world-wide.
Increases in depreciation of $1.0 million and interest expense of
$0.9 million were both related to the addition of the two new vessels
in the North Sea and the six additional vessels in Southeast Asia.
In the six months ended June 30, 1997, the Company reflected an
operating loss from discontinued operations of $0.6 million, compared
to a loss of $0.1 million for the same period in 1996. The increased
loss in the 1997 period is primarily due to provisions for certain
legal and tax issues related to Ercon's operations.
15<PAGE>
<PAGE>16
Liquidity and Capital Resources
The Company's ongoing liquidity requirements arise primarily from
its need to service debt, fund working capital, acquire or improve
equipment and make other investments. Since its inception, the
Company has been active in the acquisition of additional vessels
through both the resale market and new construction. Bank financing
and internally generated funds have provided funding for these
activities. Currently, the Company has significant lending
relationships with two major European commercial banks.
At June 30, 1997, the Company had outstanding debt of $62.0
million, all of which is borrowed under various facilities with these
banks. These facilities are secured by preferred ship mortgages on 19
of the Company's vessels and assignments of such vessels' earnings.
Interest on the borrowings accrues at rates between LIBOR plus 1% and
LIBOR plus 2 1/4% per annum. Scheduled debt repayments are expected
to total $8.5 million for the remainder of 1997. The loan facility
agreements place certain restrictions on the ability of the
subsidiaries to pay dividends. Cash held by these subsidiaries was
$2.4 million as of June 30, 1997. In connection with the pending
completion of the Highland Rover's construction, one of the banks has
committed to an additional GBP 9.0 million (approximately $14.9
million) for the final payment upon delivery (expected March 1998) at
an interest rate of LIBOR plus 1%.
Net cash provided by operating activities of continuing operations
was $4.8 million for the period ended June 30, 1997, as compared to
$1.9 million for the same period in 1996. This increase resulted from
the increase in earnings.
Net cash used in investing activities was $17.7 million and $13.9
million for the six months ended June 30, 1997 and 1996, respectively.
Each of these periods reflect significant vessel acquisitions. In
1997, the Company took delivery of the Highland Drummer and in 1996,
the Highland Piper. For the six months ended June 30, 1997, the
Company also experienced a higher level of expenditures related to the
routine drydockings of nine of its vessels, as compared to five
drydockings in the comparable period of 1996.
Net cash provided by financing activities was $3.3 million for
the period ended June 30, 1997 and $11.1 million for the period ended
June 30, 1996. The decrease in the cash provided from financing
activities in the first six months of 1997 was largely due to the fact
that the final payment on the Highland Piper (March 1996) was entirely
funded with additional debt while the final payment on the Highland
Drummer (January 1997) included approximately $5.6 million of
internally generated funds.
16<PAGE>
<PAGE>17
Substantially all of the Company's tax provision is for deferred
taxes. The net operating loss available in the United Kingdom is
primarily the result of accelerated depreciation allowances under
United Kingdom tax law. The Company believes that the current
reserves of cash and short term investments, cash flows from
operations and access to various credit arrangements will provide
sufficient resources to finance internal operating requirements. Such
investments may require the expenditure of significant resources,
either in cash, notes or a combination thereof.
Currency Fluctuations and Inflation
Substantially all of the operations of the Company are overseas,
therefore it is exposed to currency fluctuations and exchange rate
risks. Charters for vessels in the North Sea fleet are primarily
denominated in Sterling and substantially all the operating costs are
in Sterling. North Sea operations generated $25.6 million in
revenues, $9.8 million in operating income and $9.9 million of cash
flows from operations for the year ended December 31, 1996. In 1996
the Sterling/U.S. Dollar exchange rate ranged from a high of GBP =
U.S.$1.71 to a low of GBP = U.S. 1.49 with an average of GBP =
U.S.$1.56 for the year. As of June 30, 1997, the Sterling/U.S. Dollar
exchange rate was GBP = U.S.$1.66.
The Company reduces its exposure to currency fluctuations by
arranging for the debt financing on, and operating expenses of, each
vessel to be in the same currency in which the vessel's revenues will
be earned. The effect on cash flows of these fluctuations in the
Sterling/Dollar exchange rates is largely offset by the Sterling
denominated borrowings which accounted for $51.0 million; or 82%, of
total debt as of June 30, 1997 and represents $2.7 million, or 68%, of
the debt repayments made in 1997.
Reflected in the accompanying balance sheet for June 30, 1997, is
a $1.2 million cumulative translation adjustment primarily relating to
the lower Sterling exchange rate as of June 30, 1997 in comparison to
the exchange rate when the Company invested capital in its United
Kingdom subsidiaries. Changes in the cumulative translation
adjustment are non-cash items that are primarily attributable to
investments in vessels and are partially offset by the Sterling
denominated debt associated with the North Sea fleet.
Several of the Company's Southeast Asia charters are denominated
in Malaysian ringgits as were a portion of its operating costs.
Revenues in this currency were approximately $1.6 million for 1996.
Malaysian currency rates have been relatively stable for the last
17<PAGE>
<PAGE>18
three years ended December 31, 1996, with the exchange rate of
ringgits to U.S. dollars averaging M$ = U.S.$0.40 during 1996, and the
high and low during the three years were within 3% of this average.
The Company does not currently hedge this currency. Where currency
risks are potentially high, as in Brazil, the Company accepts only a
small percentage of charter hire in local currency and the remainder
is paid in U.S. Dollars.
To date, general inflationary trends have not had a material
effect on the operating revenues or expenses of the Company.
Forward-Looking Statements
This Form 10-Q contains certain forward-looking statements and
other statements that are not historical facts concerning, among other
things, market conditions, the demand for marine support services and
future capital expenditures. Such statements are subject to certain
risks, uncertainties and assumptions, including, without limitation,
dependence on the oil and natural gas industry, ongoing capital
expenditure requirements, uncertainties surrounding environmental and
government regulation, risk relating to leverage, risk of foreign
operations assumptions concerning competition and risk of currency
fluctuations and other matters. There can be no assurance that the
Company has accurately identified and properly weighted all of the
factors which affect market conditions and demand for the Company's
vessels, that the information upon which the Company has relied is
accurate or complete, that the Company's analysis of the market and
demand for its vessels is correct or that the strategy based on such
analysis will be successful.
PART II
OTHER INFORMATION
Item 2. Changes in Securities.
The only sales of unregistered securities during this period
occurred on May 8, 1997, when the Company sold 24,568 shares of Common
Stock, and on May 9, 1997, when the Company sold 61,421 shares of
Common Stock, for a total of 85,989 shares. No underwriters were
involved in these sales and none of the securities were publicly
offered. The 85,989 shares were sold to the following individuals who
serve as directors of the Company:
David J. Butters............... 12,284 Shares of Common Stock
Robert B. Millard.............. 12,284 Shares of Common Stock
Norman G. Cohen................ 12,284 Shares of Common Stock
Louis A. Gimbel, 3rd........... 49,137 Shares of Common Stock
18<PAGE>
<PAGE>19
All of the unregistered securities were sold for cash as a result
of the exercise of stock options held by these directors of the
Company. The amount of consideration received by the Company for the
various sales varied due to the different strike prices under the
various options. The aggregate amount of consideration received by
the Company for all sales was $222,495.71.
The securities are exempt from registration under Section 4(2) of
the Securities Act of 1933, as amended, as a transaction by the issuer
not involving any public offering.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
3.1 - Certificate of Incorporation of the Company (incorporated
by reference to Exhibit No. 3.1 to the Registration Statement on Form
S-4 No. 333-24141).
3.2 - Certificate of Amendment to Certificate of Incorporation of
the Company (incorporated by reference to Exhibit No. 3.2 to the
Registration Statement on Form S-4 No. 333-24141).
3.3 - By-laws of the Company (incorporated by reference to
Exhibit No. 3.3 to the Registration Statement on Form S-4 No.
333-24141).
4.1 - See Exhibit Nos. 3.1 and 3.2 for provisions of the
Certificate of Incorporation and By-laws of the Company defining the
rights of the holders of Common Stock.
4.2 - Specimen Certificate for the Company's Common Stock, $0.01
par value (incorporated herein by reference to Exhibit 4.2 of GulfMark
Offshore, Inc.'s Registration Statement on Form S-1, Registration No.
333-31139 filed July 11, 1997).
10.1 - GulfMark International, Inc. 1987 Stock Option Plan
(incorporated by reference to Exhibit No. 10.1 to the Registration
Statement on Form S-4 No. 333-24141).
10.2 - Amendment to the GulfMark International, Inc. 1987 Stock
Option Plan (incorporated herein by reference to Exhibit 10.2 of
GulfMark Offshore, Inc.'s Registration Statement on Form S-1,
Registration No. 333-31139 filed July 11, 1997).
19<PAGE>
<PAGE>20
10.3 - GulfMark Offshore, Inc. Instrument of Assumption and
Adjustment (GulfMark International, Inc. 1987 Stock Option Plan)
(incorporated herein by reference to Exhibit 10.3 of GulfMark
Offshore, Inc.'s Registration Statement on Form S-1, Registration No.
333-31139 filed July 11, 1997).
10.4 - Form of Incentive Stock Option Agreement (GulfMark
International, Inc. 1987 Stock Option Plan) (incorporated herein by
reference to Exhibit 10.4 of GulfMark Offshore, Inc.'s Registration
Statement on Form S-1, Registration No. 333-31139 filed July 11,
1997).
10.5 - Form of Amendment No. 1 to Incentive Stock Option
Agreement (GulfMark International, Inc. 1987 Stock Option Plan, as
amended) (incorporated herein by reference to Exhibit 10.5 of GulfMark
Offshore, Inc.'s Registration Statement on Form S-1, Registration No.
333-31139 filed July 11, 1997).
10.6 - Form of Incentive Stock Option Agreement (GulfMark
Offshore, Inc. 1987 Stock Option Plan) (incorporated herein by
reference to Exhibit 10.6 of GulfMark Offshore, Inc.'s Registration
Statement on Form S-1, Registration No. 333-31139 filed July 11,
1997).
10.7 - GulfMark International, Inc. Amended and Restated 1993
Non-Employee Director Stock Option Plan (incorporated herein by
reference to Exhibit 10.7 of GulfMark Offshore, Inc.'s Registration
Statement on Form S-1, Registration No. 333-31139 filed July 11,
1997).
10.8 - Amendment No. 1 to the GulfMark International, Inc.
Amended and Restated 1993 Non-Employee Director Stock Option Plan
(incorporated herein by reference to Exhibit 10.8 of GulfMark
Offshore, Inc.'s Registration Statement on Form S-1, Registration No.
333-31139 filed July 11, 1997).
10.9 - GulfMark Offshore, Inc. Instrument of Assumption and
Adjustment (GulfMark International, Inc. Amended and Restated 1993
Non-Employee Director Stock Option Plan) (incorporated herein by
reference to Exhibit 10.9 of GulfMark Offshore, Inc.'s Registration
Statement on Form S-1, Registration No. 333-31139 filed July 11,
1997).
10.10 - Form of Stock Option Agreement (GulfMark International,
Inc. Amended and Restated 1993 Non-Employee Director Stock Option
Plan) (incorporated herein by reference to Exhibit 10.10 of GulfMark
Offshore, Inc.'s Registration Statement on Form S-1, Registration No.
333-31139 filed July 11, 1997).
20<PAGE>
<PAGE>21
10.11 - Form of Amendment No. 1 to Stock Option Agreement
(GulfMark International, Inc. Amended and Restated 1993 Non-Employee
Director Stock Option Plan) (incorporated herein by reference to
Exhibit 10.11 of GulfMark Offshore, Inc.'s Registration Statement on
Form S-1, Registration No. 333-31139 filed July 11, 1997).
10.12 - Form of Stock Option Agreement (GulfMark Offshore, Inc.
1993 Non-Employee Director Stock Option Plan) (incorporated herein by
reference to Exhibit 10.12 of GulfMark Offshore, Inc.'s Registration
Statement on Form S-1, Registration No. 333-31139 filed July 11,
1997).
10.13 - GulfMark Offshore, Inc. Instrument of Assumption and
Adjustment (GulfMark International, Inc. Director Stock Option
Agreements) (incorporated herein by reference to Exhibit 10.13 of
GulfMark Offshore, Inc.'s Registration Statement on Form S-1,
Registration No. 333-31139 filed July 11, 1997).
10.14 - Form of Stock Option Agreement (GulfMark International,
Inc. Director Stock Options) (incorporated herein by reference to
Exhibit 10.14 of GulfMark Offshore, Inc.'s Registration Statement on
Form S-1, Registration No. 333-31139 filed July 11, 1997).
10.15 - Form of Amendment No. 1 to Stock Option Agreement
(GulfMark International, Inc. Director Stock Options) (incorporated
herein by reference to Exhibit 10.15 of GulfMark Offshore, Inc.'s
Registration Statement on Form S-1, Registration No. 333-31139 filed
July 11, 1997).
10.16 - Agreement dated October 20, 1995 Amending and Restating
the $5,800,000 and GBP9,400,000 Loan Facility Agreement dated July 8,
1993, made by and between The Chase Manhattan Bank, N.A. and GulfMark
North Sea Limited, Gulf Offshore Marine International, Inc., Gulf
Offshore N.S. Limited and Gulf Offshore Far East, Inc. (incorporated
herein by reference to Exhibit 10.16 of GulfMark Offshore, Inc.'s
Registration Statement on Form S-1, Registration No. 333-31139 filed
July 11, 1997).
10.17 - Loan Facility Agreement dated as of July 26, 1996, made
between The Chase Manhattan Bank, Chase Manhattan International
Limited, as Agent, Gulf Offshore Shipping Services, Inc., GulfMark
International, Inc., GulfMark North Sea Limited and Gulf Offshore
Marine International, Inc. (incorporated herein by reference to
Exhibit 10.17 of GulfMark Offshore, Inc.'s Registration Statement on
Form S-1, Registration No. 333-31139 filed July 11, 1997).
21<PAGE>
<PAGE>22
10.18 - Agreement Amending and Restating the GBP3,300,000 Loan
Facility dated July 8, 1993, made by The Chase Manhattan Bank, N.A.
and GulfMark North Sea Limited, Gulf Offshore Marine International
Inc., Gulf Offshore N.S. Limited and Gulf Offshore Far East, Inc.
(incorporated herein by reference to Exhibit 10.18 of GulfMark
Offshore, Inc.'s Registration Statement on Form S-1, Registration No.
333-31139 filed July 11, 1997).
10.19 - Agreement amending Loan Facility dated July 8, 1993 as
amended by an amendment and restatement agreement dated May 20, 1994
(GBP3,300,000 facility) (incorporated herein by reference to Exhibit
10.19 of GulfMark Offshore, Inc.'s Registration Statement on Form S-1,
Registration No. 333-31139 filed July 11, 1997).
10.20 - Deed of Release and Substitution dated April 30, 1997 by
and among GulfMark Offshore, Inc. and The Chase Manhattan Bank,
GulfMark North Sea Limited, Gulf Offshore Marine International, Inc.,
Gulf Offshore N.S. Limited and Gulf Offshore Far East, Inc. relating
to that certain GBP3,300,000 Facility Agreement dated October 20, 1995
Amending and Restating the Loan Facility Agreement dated July 8, 1993
(incorporated herein by reference to Exhibit 10.20 of GulfMark
Offshore, Inc.'s Registration Statement on Form S-1, Registration No.
333-31139 filed July 11, 1997).
10.21 - Deed of Release and Substitution dated April 30, 1997 by
and among GulfMark Offshore, Inc. and Chase Manhattan International
Limited, as Agent, The Chase Manhattan Bank, Gulf Offshore Shipping
Services, Inc., GulfMark International, Inc., GulfMark North Sea
Limited and Gulf Offshore Marine International, Inc. relating to a
U.S. $7,000,000 Credit Facility Agreement dated July 8, 1993
(incorporated herein by reference to Exhibit 10.21 of GulfMark
Offshore, Inc.'s Registration Statement on Form S-1, Registration No.
333-31139 filed July 11, 1997).
10.22 - Deed of Release and Substitution dated April 30, 1997 by
and among GulfMark Offshore, Inc. and Chase Manhattan International
Limited, as Agent, The Chase Manhattan Bank, The Governor and Company
of the Bank of Scotland, GulfMark North Sea Limited, Gulf Offshore
Marine International, Inc., Gulf Offshore N.S. Limited, and Gulf
Offshore Far East, Inc. relating to a U.S. $5,800,000 and GBP9,400,000
Syndicated Loan Facility dated July 8, 1993 as most recently amended
and restated by an Agreement dated October 20, 1995 (incorporated
herein by reference to Exhibit 10.22 of GulfMark Offshore, Inc.'s
Registration Statement on Form S-1, Registration No. 333-31139 filed
July 11, 1997).
22<PAGE>
<PAGE>23
10.23 - Loan Agreement dated as of June 11, 1997, made by and
between Christiania Bank og Kreditkasse ASA and Gulf Offshore N.S.
Limited (incorporated herein by reference to Exhibit 10.23 of GulfMark
Offshore, Inc.'s Registration Statement on Form S-1, Registration No.
333-31139 filed July 11, 1997).
10.24 - Tax Allocation and Indemnification Agreement dated April
30, 1997 made by and among GulfMark International, Inc., GulfMark
Offshore, Inc. and Energy Ventures, Inc. (incorporated herein by
reference to Exhibit 10.24 of GulfMark Offshore, Inc.'s Registration
Statement on Form S-1, Registration No. 333-31139 filed July 11,
1997).
*27.1 - Financial Data Schedule.
* Filed herewith.
(b) Reports on Form 8-K.
The following reports on Form 8-K have been filed during the
quarter for which this report is filed:
One report dated May 1, 1997, was filed by the Company on
Form 8-K during the three months ended June 30, 1997 which
announced the closing of the Contribution, the Distribution
and the Merger. It included condensed consolidated financial
statements for the quarter ended March 31, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Company has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
GulfMark Offshore, Inc.
(Registrant)
By: /s/ Frank R. Pierce
-----------------------------
Frank R. Pierce
Executive Vice President
(Principal Financial Officer)
Date: July 21, 1997
23<PAGE>
<PAGE>24
EXHIBIT INDEX
Exhibit No. Description
3.1 - Certificate of Incorporation of the Company (incorporated
by reference to Exhibit No. 3.1 to the Registration Statement on Form
S-4 No. 333-24141).
3.2 - Certificate of Amendment to Certificate of Incorporation of
the Company (incorporated by reference to Exhibit No. 3.2 to the
Registration Statement on Form S-4 No. 333-24141).
3.3 - By-laws of the Company (incorporated by reference to
Exhibit No. 3.3 to the Registration Statement on Form S-4 No.
333-24141).
4.1 - See Exhibit Nos. 3.1 and 3.2 for provisions of the
Certificate of Incorporation and By-laws of the Company defining the
rights of the holders of Common Stock.
4.2 - Specimen Certificate for the Company's Common Stock, $0.01
par value (incorporated herein by reference to Exhibit 4.2 of GulfMark
Offshore, Inc.'s Registration Statement on Form S-1, Registration No.
333-31139 filed July 11, 1997).
10.1 - GulfMark International, Inc. 1987 Stock Option Plan
(incorporated by reference to Exhibit No. 10.1 to the Registration
Statement on Form S-4 No. 333-24141).
10.2 - Amendment to the GulfMark International, Inc. 1987 Stock
Option Plan (incorporated herein by reference to Exhibit 10.2 of
GulfMark Offshore, Inc.'s Registration Statement on Form S-1,
Registration No. 333-31139 filed July 11, 1997).
10.3 - GulfMark Offshore, Inc. Instrument of Assumption and
Adjustment (GulfMark International, Inc. 1987 Stock Option Plan)
(incorporated herein by reference to Exhibit 10.3 of GulfMark
Offshore, Inc.'s Registration Statement on Form S-1, Registration No.
333-31139 filed July 11, 1997).
10.4 - Form of Incentive Stock Option Agreement (GulfMark
International, Inc. 1987 Stock Option Plan) (incorporated herein by
reference to Exhibit 10.4 of GulfMark Offshore, Inc.'s Registration
Statement on Form S-1, Registration No. 333-31139 filed July 11,
1997).
24<PAGE>
<PAGE>25
10.5 - Form of Amendment No. 1 to Incentive Stock Option
Agreement (GulfMark International, Inc. 1987 Stock Option Plan, as
amended) (incorporated herein by reference to Exhibit 10.5 of GulfMark
Offshore, Inc.'s Registration Statement on Form S-1, Registration No.
333-31139 filed July 11, 1997).
10.6 - Form of Incentive Stock Option Agreement (GulfMark
Offshore, Inc. 1987 Stock Option Plan) (incorporated herein by
reference to Exhibit 10.6 of GulfMark Offshore, Inc.'s Registration
Statement on Form S-1, Registration No. 333-31139 filed July 11,
1997).
10.7 - GulfMark International, Inc. Amended and Restated 1993
Non-Employee Director Stock Option Plan (incorporated herein by
reference to Exhibit 10.7 of GulfMark Offshore, Inc.'s Registration
Statement on Form S-1, Registration No. 333-31139 filed July 11,
1997).
10.8 - Amendment No. 1 to the GulfMark International, Inc.
Amended and Restated 1993 Non-Employee Director Stock Option Plan
(incorporated herein by reference to Exhibit 10.8 of GulfMark
Offshore, Inc.'s Registration Statement on Form S-1, Registration No.
333-31139 filed July 11, 1997).
10.9 - GulfMark Offshore, Inc. Instrument of Assumption and
Adjustment (GulfMark International, Inc. Amended and Restated 1993
Non-Employee Director Stock Option Plan) (incorporated herein by
reference to Exhibit 10.9 of GulfMark Offshore, Inc.'s Registration
Statement on Form S-1, Registration No. 333-31139 filed July 11,
1997).
10.10 - Form of Stock Option Agreement (GulfMark International,
Inc. Amended and Restated 1993 Non-Employee Director Stock Option
Plan) (incorporated herein by reference to Exhibit 10.10 of GulfMark
Offshore, Inc.'s Registration Statement on Form S-1, Registration No.
333-31139 filed July 11, 1997).
10.11 - Form of Amendment No. 1 to Stock Option Agreement
(GulfMark International, Inc. Amended and Restated 1993 Non-Employee
Director Stock Option Plan) (incorporated herein by reference to
Exhibit 10.11 of GulfMark Offshore, Inc.'s Registration Statement on
Form S-1, Registration No. 333-31139 filed July 11, 1997).
10.12 - Form of Stock Option Agreement (GulfMark Offshore, Inc.
1993 Non-Employee Director Stock Option Plan) (incorporated herein by
reference to Exhibit 10.12 of GulfMark Offshore, Inc.'s Registration
Statement on Form S-1, Registration No. 333-31139 filed July 11,
1997).
25<PAGE>
<PAGE>26
10.13 - GulfMark Offshore, Inc. Instrument of Assumption and
Adjustment (GulfMark International, Inc. Director Stock Option
Agreements) (incorporated herein by reference to Exhibit 10.13 of
GulfMark Offshore, Inc.'s Registration Statement on Form S-1,
Registration No. 333-31139 filed July 11, 1997).
10.14 - Form of Stock Option Agreement (GulfMark International,
Inc. Director Stock Options) (incorporated herein by reference to
Exhibit 10.14 of GulfMark Offshore, Inc.'s Registration Statement on
Form S-1, Registration No. 333-31139 filed July 11, 1997).
10.15 - Form of Amendment No. 1 to Stock Option Agreement
(GulfMark International, Inc. Director Stock Options) (incorporated
herein by reference to Exhibit 10.15 of GulfMark Offshore, Inc.'s
Registration Statement on Form S-1, Registration No. 333-31139 filed
July 11, 1997).
10.16 - Agreement dated October 20, 1995 Amending and Restating
the $5,800,000 and GBP9,400,000 Loan Facility Agreement dated July 8,
1993, made by and between The Chase Manhattan Bank, N.A. and GulfMark
North Sea Limited, Gulf Offshore Marine International, Inc., Gulf
Offshore N.S. Limited and Gulf Offshore Far East, Inc. (incorporated
herein by reference to Exhibit 10.16 of GulfMark Offshore, Inc.'s
Registration Statement on Form S-1, Registration No. 333-31139 filed
July 11, 1997).
10.17 - Loan Facility Agreement dated as of July 26, 1996, made
between The Chase Manhattan Bank, Chase Manhattan International
Limited, as Agent, Gulf Offshore Shipping Services, Inc., GulfMark
International, Inc., GulfMark North Sea Limited and Gulf Offshore
Marine International, Inc. (incorporated herein by reference to
Exhibit 10.17 of GulfMark Offshore, Inc.'s Registration Statement on
Form S-1, Registration No. 333-31139 filed July 11, 1997).
10.18 - Agreement Amending and Restating the GBP3,300,000 Loan
Facility dated July 8, 1993, made by The Chase Manhattan Bank, N.A.
and GulfMark North Sea Limited, Gulf Offshore Marine International
Inc., Gulf Offshore N.S. Limited and Gulf Offshore Far East, Inc.
(incorporated herein by reference to Exhibit 10.18 of GulfMark
Offshore, Inc.'s Registration Statement on Form S-1, Registration No.
333-31139 filed July 11, 1997).
10.19 - Agreement amending Loan Facility dated July 8, 1993 as
amended by an amendment and restatement agreement dated May 20, 1994
(GBP3,300,000 facility) (incorporated herein by reference to Exhibit
10.19 of GulfMark Offshore, Inc.'s Registration Statement on Form S-1,
Registration No. 333-31139 filed July 11, 1997).
26<PAGE>
<PAGE>27
10.20 - Deed of Release and Substitution dated April 30, 1997 by
and among GulfMark Offshore, Inc. and The Chase Manhattan Bank,
GulfMark North Sea Limited, Gulf Offshore Marine International, Inc.,
Gulf Offshore N.S. Limited and Gulf Offshore Far East, Inc. relating
to that certain GBP3,300,000 Facility Agreement dated October 20, 1995
Amending and Restating the Loan Facility Agreement dated July 8, 1993
(incorporated herein by reference to Exhibit 10.20 of GulfMark
Offshore, Inc.'s Registration Statement on Form S-1, Registration No.
333-31139 filed July 11, 1997).
10.21 - Deed of Release and Substitution dated April 30, 1997 by
and among GulfMark Offshore, Inc. and Chase Manhattan International
Limited, as Agent, The Chase Manhattan Bank, Gulf Offshore Shipping
Services, Inc., GulfMark International, Inc., GulfMark North Sea
Limited and Gulf Offshore Marine International, Inc. relating to a
U.S. $7,000,000 Credit Facility Agreement dated July 8, 1993
(incorporated herein by reference to Exhibit 10.21 of GulfMark
Offshore, Inc.'s Registration Statement on Form S-1, Registration No.
333-31139 filed July 11, 1997).
10.22 - Deed of Release and Substitution dated April 30, 1997 by
and among GulfMark Offshore, Inc. and Chase Manhattan International
Limited, as Agent, The Chase Manhattan Bank, The Governor and Company
of the Bank of Scotland, GulfMark North Sea Limited, Gulf Offshore
Marine International, Inc., Gulf Offshore N.S. Limited, and Gulf
Offshore Far East, Inc. relating to a U.S. $5,800,000 and GBP9,400,000
Syndicated Loan Facility dated July 8, 1993 as most recently amended
and restated by an Agreement dated October 20, 1995 (incorporated
herein by reference to Exhibit 10.22 of GulfMark Offshore, Inc.'s
Registration Statement on Form S-1, Registration No. 333-31139 filed
July 11, 1997).
10.23 - Loan Agreement dated as of June 11, 1997, made by and
between Christiania Bank og Kreditkasse ASA and Gulf Offshore N.S.
Limited (incorporated herein by reference to Exhibit 10.23 of GulfMark
Offshore, Inc.'s Registration Statement on Form S-1, Registration No.
333-31139 filed July 11, 1997).
10.24 - Tax Allocation and Indemnification Agreement dated April
30, 1997 made by and among GulfMark International, Inc., GulfMark
Offshore, Inc. and Energy Ventures, Inc. (incorporated herein by
reference to Exhibit 10.24 of GulfMark Offshore, Inc.'s Registration
Statement on Form S-1, Registration No. 333-31139 filed July 11,
1997).
*27.1 - Financial Data Schedule.
27
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE FOLLOWING SETS FORTH CERTAIN SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF GULFMARK OFFSHORE, INC. AS OF
JUNE 30, 1997, AND THE CONDENSED CONSOLIDATED STATEMENT OF INCOME FOR THE SIX
MONTHS ENDED JUNE 30, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 5,931
<SECURITIES> 0
<RECEIVABLES> 12,784
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 19,360
<PP&E> 118,996
<DEPRECIATION> 21,440
<TOTAL-ASSETS> 120,356
<CURRENT-LIABILITIES> 19,377
<BONDS> 0
0
0
<COMMON> 68
<OTHER-SE> 27,015
<TOTAL-LIABILITY-AND-EQUITY> 120,356
<SALES> 21,031
<TOTAL-REVENUES> 21,031
<CGS> 8,886
<TOTAL-COSTS> 14,840
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,616
<INCOME-PRETAX> 3,834
<INCOME-TAX> 1,120
<INCOME-CONTINUING> 2,714
<DISCONTINUED> (2,074)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 640
<EPS-PRIMARY> .09
<EPS-DILUTED> .09
</TABLE>
