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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of Earliest Event Reported): October 28, 1998
GulfMark Offshore, Inc.
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(Exact Name of Registrant as Specified in its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
000-22853 76-0526032
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(Commission File Number) (I.R.S. Employer Identification No.)
5 Post Oak Park, Suite 1170, Houston, Texas 77027
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(Address of Principal Executive Offices) (Zip Code)
(713)963-9522
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(Registrant's Telephone Number, Including Area Code)
N/A
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(Former Name or Former Address, if Changed Since Last Report)
(Exhibit Index Located on Page 3)
1
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ITEM 5. OTHER EVENTS
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On October 28, 1998, GulfMark Offshore, Inc. (NASDAQ: GMRK) announced
significantly increased earnings for the quarter ended September 30, 1998.
Additional information is included in the Company's press release dated
October 28, 1998, which is attached hereto as Exhibit 99.1
(b) Exhibits.
Exhibit No. Description
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99.1 Press Release dated October 28, 1998
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GulfMark Offshore, Inc.
Date: October 28, 1998 By: /s/ Frank R. Pierce
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Executive Vice President
2
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EXHIBIT INDEX
Exhibit No. Description
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99.1 Press Release dated October 28, 1998
3
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PRESS RELEASE
FOR IMMEDIATE RELEASE
October 28, 1998 - Houston - GulfMark Offshore, Inc. (NASDAQ:GMRK)
announced significantly increased earnings for the quarter ended
September 30, 1998 of $8,199,000 or $0.99 per share (diluted),
compared to $2,626,000, or $0.35 per share (diluted), in the same
period of 1997. Revenues for the quarter ended September 30, 1998
were $24,334,000 compared to $12,642,000 in the same period in 1997.
Included in the current quarter's results is a gain of approximately $2.9
million ($0.23 per diluted share, net of tax) for the previously announced
cash sale of the Company's 51% owned joint venture, SeaMark Ltd., which
operated two bareboat chartered vessels in Southeast Asia. Additionally the
current quarter's results include the favorable impact of a change in tax
rates in the United Kingdom, the cumulative effect of which reduced the third
quarter tax provision by $0.4 million, or almost $0.05 per diluted share.
Net income before these items more than doubled to $5.9 million ($0.71 per
diluted share) in the quarter ended September 30, 1998 compared to $2.6
million ($0.35 per diluted share) in the comparable period last year.
The Company benefited in the quarter from the continued strong market in the
North Sea where the demand for vessels to support construction activity
exceeded expectations. Average day rates for the vessels increased for the
quarter compared to the same period in the prior year across the fleet with
particular growth noted in the North Sea ($13,276 versus $9,799). A large
percentage of the strong gain in net income came from fleet additions, the
five vessels that were added in February 1998 through the Brovig acquisition
and the Highland Rover, which was delivered in March 1998. Overall fleet
utilization for the quarter decreased slightly compared to the previous year.
For the North Sea capable fleet, utilization was at 96.6% compared to 99.9%
in the comparable quarter in the previous year. The shorter term nature of
construction activity and scheduled dry-dock activity led to this difference.
Similarly in the Southeast Asia market, inconsistency led to somewhat lower
utilization of 84.7% compared to the 88.2% experienced in a very strong third
quarter last year. Overall depreciation expense increased by approximately
$1.3 million over the same period last year as did interest expense, both as
a result of the acquisitions discussed above.
Approximately two-thirds of the increased net income from operations came
from the addition of the six vessels acquired or delivered in the first half
of the year. Subsequent to the quarter end (October 1998) the Company took
delivery of the Monarch Bay, which is bareboat chartered from the vessel's
owner, Sanko Shipping. This is the fourth newly constructed vessel to join
the Company's operated fleet this year. The Company will soon take delivery
of the Highland Spirit (a Company owned, multipurpose vessel). This vessel
will commence a five-year charter supporting a major North Sea field location
upon delivery. The Company has two additional vessels under construction for
delivery in March and May of 1999. These vessels are of a design considered
suitable for North Sea or worldwide deepwater support.
The recent softness in oil prices has resulted in a reduction of demand in
certain segments of the industry. However, the Company has been able to
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maintain its performance and continue its earnings growth in this environment
because of a combination of factors including the type of equipment it
operates (modern, technologically sophisticated vessels), the locations where
the vessels work (principally the North Sea, Southeast Asia and Brazil) and
the existence of a number of long term contracts. There can be no assurance
that the softness in demand recently impacting certain segments of the market
will not continue or even spread to other segments. However, the Company
believes that its mix of equipment, markets and contract cover in combination
with its strong financial position will enable it to continue to prosper or
in the event of an extended negative environment to capitalize on
opportunities.
GulfMark Offshore, Inc. provides marine transportation services to the energy
industry with a fleet of thirty-seven (37) offshore support vessels,
primarily in the North Sea, offshore Southeast Asia and Brazil.
Contact: Frank R. Pierce, Executive Vice President
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; 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.
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GULFMARK OFFSHORE, INC.
Press Release - For Immediate Release
September 28, 1998
Page 3 of 3
OPERATING RESULTS
(in 000's except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Nine Months
Ended
September 30, September 30,
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- ---
1998 1997 1998 1997
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- --
<S> <C> <C> <C> <C>
REVENUES............................................... $24,334 $12,642 $62,827
$33,673
Direct operating expenses.............................. (9,326) (4,736) (22,966)
(13,622)
General and administrative expenses.................... (1,548) (1,389) (4,335)
(4,059)
Depreciation and amortization.......................... (2,939) (1,678) (8,265)
(4,962)
------- ------- ------- -----
- --
OPERATING INCOME..................................... 10,521 4,839 27,261
11,030
Interest expense, net of interest income............... (2,213) (947) (5,816)
(3,348)
Gain on sale of joint venture interest................. 2,920 -- 2,920
- --
Other, net............................................. 80 (55) (132)
(11)
------- ------- ------- -----
- --
Income from continuing operations before income taxes.. 11,308 3,837 24,233
7,671
Income tax provision................................... (3,109) (1,211) (7,237)
(2,331)
------- ------- ------- -----
- --
INCOME FROM CONTINUING OPERATIONS...................... 8,199 2,626 16,996
5,340
Loss from discontinued operations, net of taxes........ -- -- --
(648)
Loss on disposal of discontinued operations, -- -- --
(1,426)
net of taxes......................................... ------- ------- ------- -----
- --
Net income........................................... $ 8,199 $ 2,626 $16,996 $
3,266
======= ======= =======
=======
BASIC EARNINGS PER SHARE:
INCOME FROM CONTINUING OPERATIONS.................... $ 1.01 $ 0.36 $ 2.12 $
0.77
Loss from discontinued operations, net of taxes...... -- -- --
(0.09)
Loss on disposal of discontinued operations,
net of taxes....................................... -- -- --
(0.21)
------- ------- ------- -----
- --
$ 1.01 $ 0.36 $ 2.12 $
0.47
======= ======= =======
=======
DILUTED EARNINGS PER SHARE:
INCOME FROM CONTINUING OPERATIONS.................... $ 0.99 $ 0.35 $ 2.06 $
0.76
Loss from discontinued operations, net of taxes...... -- -- --
(0.09)
Loss on disposal of discontinued operations,
net of taxes....................................... -- -- --
(0.20)
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$ 0.99 $ 0.35 $ 2.06 $
0.47
======= ======= =======
=======
Weighted average common shares......................... 8,104 7,278 8,021
6,898
Weighted average diluted common shares................. 8,268 7,611 8,248
7,030
Rates per day worked
North Sea Capable Vessels............................ $13,276 $ 9,799 $12,268 $
9,869
Standard Vessels (primarily Southeast Asia).......... 4,961 4,113 4,858
3,736
Overall Utilization %
North Sea Capable Vessels............................ 96.6% 99.9% 97.9%
96.5%
Standard Vessels (primarily Southeast Asia).......... 84.7% 88.2% 86.0%
72.4%
Average Owned or Chartered
North Sea Capable Vessels............................ 16.8 9.0 14.7
9.0
Standard Vessels (primarily Southeast Asia).......... 12.2 14.0 13.4
14.0
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- --
Total.............................................. 29.0 23.0 28.1
23.0
======= ======= =======
=======
</TABLE>
