GulfMark Offshore, Inc. (“GulfMark” or the “Company”) (NYSE:GLF)
today announced its results of operations for the three- and
six-month periods ended June 30, 2016. Recent highlights include:
- Reduced Bond Indenture Debt by $49 Million through Open Market
Purchases, Generating a Gain of Over $25 million
- Maintained Strong Liquidity Position of Approximately $143
Million at Quarter End
- Continued Successful Liquidation of Older Vessels by Selling
1998-Built North Sea Vessel During Q2, Which Had Been in Lay-Up for
More than One Year
- Subsequent to Quarter End, Sold Two Southeast Asia Vessels for
Total Proceeds of $3.6 Million
- Continued High-grading of Fleet with Delivery of our First 300
Class Jones Act Vessel in U.S. Gulf of Mexico
- Achieved Average Marketed Vessel Utilization of 86%, Consistent
with High-80’s Target
- Recorded Non-Cash, Pre-Tax Asset Impairments of $46.2
million
- Reduced General and Administrative Expenses (Excluding Certain
Gains and Costs Discussed Below) by 8% vs. Previous Quarter
- Reduced Direct Operating Expenses (Excluding Certain Gains and
Costs Discussed Below) by 8% vs. Previous Quarter
- Forecasting Direct Operating Expenses to Decrease Approximately
6% from Q2 to Q3 2016 (Excluding Certain Gains and Costs Discussed
Below)
For the quarter ended June 30, 2016, revenue was $30.5 million,
and net loss was $47.6 million, or $1.90 per diluted share.
Included in the results are certain gains and costs described below
that totaled $33.3 million or $1.33 per diluted share. Quarterly
loss excluding these items was $14.3 million or $0.57 per diluted
share.
Quintin Kneen, President and CEO, commented, “We are pleased to
report on our ability to continually improve the Company. We
improved the balance sheet through debt repurchases that averaged
less than half of par value. We continue to improve the average
fleet age and capability through the delivery of a new
state-of-the-art vessel in the Americas, the sale of an older
vessel in the North Sea and the sale of two of our older vessels in
Southeast Asia in July. Through our persistent cost focus, we
reduced direct operating expenses for each of the last seven
quarters. Importantly we reduced these costs during the second
quarter while increasing utilization, and we anticipate this trend
to continue. In the broader market, we are seeing signs
that the industry is withdrawing capacity to such a degree that
certain geographic markets are beginning to show signs of balance.
In particular, the North Sea PSV market has seen the average spot
day rate for the second quarter increase by more than 150% over the
same period last year. Also, for the first time since the second
quarter of 2014, we sequentially increased our consolidated average
quarterly utilization. That increase was 3 percentage points.
Overall we are seeing early signs of encouragement, however leading
edge day rates and utilization are still well below sustainable
levels for the industry.
“During the quarter, we accomplished milestones that will help
us when the upturn arrives. We repurchased $49 million of debt in
the open market for approximately $24 million. By repurchasing our
debt at a substantial discount, we created a gain in the current
quarter and reduced the amount of ongoing interest expense and debt
that the Company will ultimately have to repay. We were able to
sell an 18 year-old vessel that had been in lay-up for over a year.
This sale provided some immediate cash and removed a
non-contributing vessel from our fleet. Additionally, we took
delivery of our first 300 Class Jones Act vessel near the end of
the second quarter.
“The North Sea region is beginning to show some signs of
incremental day rate improvement. Average leading edge day rates in
the spot market increased to an amount that was above operating
cash costs for most of the quarter. We view this improvement as a
result of vessel owners withholding supply rather than an increase
in demand. While we know the climb in day rates will not be steady,
we are optimistic that prospective rates will be more supportive of
profitable operations in this region. Our Southeast Asia operations
also experienced operational improvement, achieving increased day
rates and utilization compared to the prior quarter. We believe
this Southeast Asia improvement has more to do with individual
successes by our management rather than an improvement in the
overall market.”
Kneen continued, “We are steadfastly maintaining our strategy of
opportunistically reducing debt, selling vessels, lowering
operating costs and maintaining capital discipline, which allows us
to maximize operating cash flow, maintain liquidity and improve
long-term operational efficiencies. As we have previously stated,
we expect to have adequate liquidity and to be in compliance with
our debt covenants and maintain access to our revolving credit
facilities through the foreseeable future, which includes all of
2017. Also, we are seeing a continued increase in activity from
potential vessel purchasers, and we remain confident that we will
be able to continue to meet our goal of liquidating older
vessels.”
Consolidated Second-Quarter Results
Consolidated revenue for the second quarter of 2016 was $30.5
million, compared with $38.8 million in the previous quarter.
Consolidated revenue fell due to a 16% sequential decrease in
average day rate to $10,939 from $12,982 in the previous quarter
offset somewhat by an increase in utilization to 41% from 38% in
the first quarter. Marketed utilization, which is the utilization
on vessels that the Company actively markets to customers, was
85.7%. Consolidated operating loss was $66.3 million, compared with
$128.3 million in the first quarter. Excluding certain gains and
costs in both quarters, consolidated operating loss sequentially
increased to $14.0 million from a loss of $10.1 million in the
first quarter, due to lower revenue, offset by lower drydock
expense, lower operating and lower general and administrative
costs.
The second quarter results include certain gains and costs
totaling $33.3 million net of tax ($1.33 per diluted share) of
which $33.0 million ($1.31 per diluted share) was non-cash. The
Company impaired a portion of its Americas-based fleet and
Southeast Asia-based fleet. These net-of-tax impairment charges
included $13.0 million related to vessels in the non-U.S. portion
of the Americas and $30.3 million related to Southeast Asia. The
next item was a $16.8 million net of tax gain on extinguishment of
debt as a result of repurchasing Company bond indenture debt at a
discount on the open market. The Company also recorded asset sales
for a net-of-tax loss of approximately $5.9 million. Additionally,
the Company wrote down debt issuance costs of $0.6 million net of
tax associated with the repurchasing of Company bond indenture
debt. All of these gains and costs were non-cash. The Company also
recorded net of tax workforce redundancy and exit charges of $0.3
million. The tables at the end of the earnings release provide a
summary of these items.
Regional Results for the Second Quarter
In the North Sea region, second-quarter revenue was $21.1
million, compared with $22.9 million in the first quarter. The
average day rate fell 19% to $12,055 from $14,950 in the first
quarter which was the primary reason for the decrease in revenue.
Utilization improved from the prior quarter to 69% up from 62% in
the first quarter. The Company’s marketed utilization in the North
Sea was 95% during the second quarter. GulfMark currently has six
vessels stacked in the North Sea.
Second-quarter revenue in the Southeast Asia region was $4.4
million, compared with $2.5 million in the first quarter. The
change in revenue was due to an increase in average day rate of 17%
to $8,246 from $7,070 in the first quarter combined with an 11
percentage point utilization increase. The Company’s marketed
utilization in Southeast Asia was 74% during the second quarter.
The Company has two vessels currently stacked in Southeast
Asia.
Second-quarter revenue for the Americas region was $5.0 million,
compared with $13.4 million in the previous quarter. Average day
rate decreased 14% from the prior quarter due to the continued
softening in the market. Utilization decreased 4 percentage points
to 17% from 21% in the first quarter. The Company’s marketed
utilization in the Americas was 73% during the second quarter.
GulfMark currently has 22 vessels stacked in the Americas.
Consolidated Operating Expenses for the Second Quarter
Direct operating expenses for the second quarter were $20.9
million. Excluding the workforce redundancy charges, direct
operating expenses were $20.7 million, a decrease of $1.8 million,
or 8%, from the first quarter. The decrease was due mainly to lower
labor costs related to stacking vessels and wage reductions,
combined with lower insurance and higher fuel expense. Drydock
expense in the second quarter was $0.1 million, in-line with the
Company’s previous guidance. General and administrative expense was
$8.9 million for the second quarter. Excluding exit and severance
costs, general and administrative expense was $8.8 million, in-line
with the Company’s guided quarterly run rate. Tax benefit during
the quarter was $3.0 million, or about 6% of pretax income. The
Company expects a tax rate near 20% excluding discrete items going
forward, though cash taxes will likely be close to zero in the near
term as the Company continues to incur net operating losses.
Third Quarter 2016 Guidance
GulfMark anticipates direct operating expenses to be between $19
million and $21 million. The Company expects general and
administrative expense to be between $8 million and $9 million. In
addition, the Company expects to incur approximately $2 million in
drydock expense during the period.
Liquidity and Capital Commitments
Cash used by operating activities totaled $4.4 million in the
second quarter as working capital, excluding accrued interest,
ceased to be a source of cash for the Company. Cash on hand at June
30, 2016, was $10.6 million, and $39.2 million was drawn on the
revolving credit facilities. Total debt at June 30, 2016, was
$461.9 million, and debt net of cash was $451.3 million. Total debt
was reduced by approximately $24.2 million during the quarter. Net
debt to book capital was 45% at the end of the quarter, and total
liquidity (cash plus available revolver) was approximately $143
million at June 30.
Net capital expenditures during the second quarter totaled $5.0
million, which included $6.1 million of payments on the
construction of new vessels and $0.3 million for vessel
enhancements and other capital expenditures, offset by vessel sale
proceeds of $1.4 million. As of June 30, 2016, the Company had
approximately $23 million of non-cancelable capital commitments due
in Q1 2017. The Company expects to fund these commitments from cash
on hand, cash generated by operations, and borrowings under the
revolving credit facilities.
Conference Call/Webcast Information
GulfMark will conduct a conference call to discuss operating
results with analysts, investors and other interested parties at
9:00 a.m. Eastern Time on Wednesday, July 27, 2016. To participate
in the call, investors in the U.S. should dial 1-888-317-6003 at
least 10 minutes before the start time and when prompted, enter the
conference passcode 6292534. Canada-based callers should dial
1-866-284-3684, and international callers outside of North America
should dial 1-412-317-6061. The webcast of the conference call also
can be accessed by visiting our website, www.GulfMark.com. An audio
file of the earnings conference call will be available on the
Company’s 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.
Certain statements and information in this press release may
constitute “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. The words
“believe,” “expect,” “expected to be,” “anticipate,” “plan,”
“intend,” “foresee,” “forecast,” “continue,” “can,” “will,” “will
continue,” “may,” “should,” “would,” “could” or other similar
expressions are intended to identify forward-looking statements,
which are generally not historical in nature. Statements in this
press release that contain forward-looking statements may include,
but are not limited to, information concerning our possible or
assumed future results of operations and statements about future
operating expenses, liquidity, vessels sales, market developments,
taxes, reductions in costs and expenses and funding of capital
commitments. These forward-looking statements are based on our
current expectations and beliefs concerning future developments and
their potential effect on us. While management believes that these
forward-looking statements are reasonable as and when made, there
can be no assurance that future developments affecting us will be
those that we anticipate. All comments concerning our expectations
for future revenues are based on our forecasts for our existing
operations. Our forward-looking statements involve significant
risks and uncertainties (some of which are beyond our control) and
assumptions that could cause actual results to differ materially
from our historical experience and our present expectations or
projections. Factors that could cause actual results to differ
materially from those in the forward-looking statements include,
but are not limited to: the price of oil and gas and its effect on
offshore drilling, vessel utilization and day rates; industry
volatility; fluctuations in the size of the offshore marine vessel
fleet in areas where the Company operates; changes in competitive
factors; delays 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, including the Company’s Annual
Report on Form 10-K, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K. Consequently, the forward-looking statements
contained herein should not be regarded as representations that the
projected or anticipated outcomes can or will be achieved. These
forward-looking statements speak only as of the date hereof. We
undertake no obligation to publicly update or revise any
forward-looking statements after the date they are made, whether as
a result of new information, future events or otherwise.
In addition to financial results determined in
accordance with U.S. generally accepted accounting principles
(GAAP), this second-quarter 2016 earnings release also includes
non-GAAP financial measures (as defined under the SEC's Regulation
G). Net income, excluding gains & costs, as well as measures
derived from it (including diluted EPS, excluding gains &
costs; and effective tax, excluding gains & costs) are non-GAAP
financial measures. Management believes that the exclusion of
certain gains & costs from these financial measures enables it
to evaluate more effectively GulfMark's operations period over
period and to identify operating trends that could otherwise be
masked by the excluded items. The foregoing non-GAAP financial
measures should be considered in addition to, not as a substitute
for or superior to, other measures of financial performance
prepared in accordance with GAAP. The following tables include a
reconciliation of these non-GAAP measures to the comparable GAAP
measures.
|
|
|
|
Income
Statements |
Three Months Ended |
|
Six Months Ended |
(in thousands,
except per share data) |
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
2016 |
|
|
|
2016 |
|
|
2015 |
|
|
|
2016 |
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
30,487 |
|
|
$ |
38,794 |
|
|
$ |
74,461 |
|
|
$ |
69,281 |
|
|
$ |
163,553 |
|
Direct operating
expenses |
|
20,932 |
|
|
|
23,735 |
|
|
|
45,946 |
|
|
|
44,667 |
|
|
|
97,171 |
|
Drydock expense |
|
63 |
|
|
|
827 |
|
|
|
2,436 |
|
|
|
890 |
|
|
|
11,409 |
|
General and administrative
expenses |
|
8,854 |
|
|
|
9,788 |
|
|
|
11,521 |
|
|
|
18,642 |
|
|
|
22,485 |
|
Depreciation and
amortization |
|
14,911 |
|
|
|
16,039 |
|
|
|
18,765 |
|
|
|
30,950 |
|
|
|
37,253 |
|
Impairment charges |
|
46,151 |
|
|
|
116,657 |
|
|
|
- |
|
|
|
162,808 |
|
|
|
- |
|
Loss on sale of assets and
other |
|
5,914 |
|
|
|
4 |
|
|
|
- |
|
|
|
5,918 |
|
|
|
- |
|
Operating
Loss |
|
(66,338 |
) |
|
|
(128,256 |
) |
|
|
(4,207 |
) |
|
|
(194,594 |
) |
|
|
(4,765 |
) |
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
(8,991 |
) |
|
|
(8,397 |
) |
|
|
(8,194 |
) |
|
|
(17,388 |
) |
|
|
(16,352 |
) |
Interest income |
|
35 |
|
|
|
40 |
|
|
|
74 |
|
|
|
75 |
|
|
|
118 |
|
Gain on extinguishment of
debt |
|
25,792 |
|
|
|
10,120 |
|
|
|
- |
|
|
|
35,912 |
|
|
|
- |
|
Foreign currency loss and
other |
|
(1,083 |
) |
|
|
(44 |
) |
|
|
(30 |
) |
|
|
(1,127 |
) |
|
|
(703 |
) |
Loss before income
taxes |
|
(50,585 |
) |
|
|
(126,537 |
) |
|
|
(12,357 |
) |
|
|
(177,122 |
) |
|
|
(21,702 |
) |
Income tax benefit |
|
3,005 |
|
|
|
35,355 |
|
|
|
4,112 |
|
|
|
38,360 |
|
|
|
8,331 |
|
Net
Loss |
$ |
(47,580 |
) |
|
$ |
(91,182 |
) |
|
$ |
(8,245 |
) |
|
$ |
(138,762 |
) |
|
$ |
(13,371 |
) |
|
|
|
|
|
|
|
|
|
|
Diluted loss per
share |
$ |
(1.90 |
) |
|
$ |
(3.66 |
) |
|
$ |
(0.33 |
) |
|
$ |
(5.55 |
) |
|
$ |
(0.54 |
) |
Weighted average
diluted common shares |
|
25,077 |
|
|
|
24,893 |
|
|
|
24,696 |
|
|
|
24,985 |
|
|
|
24,650 |
|
|
|
|
|
|
|
|
|
|
|
Other
Data |
|
|
|
|
|
|
|
|
|
Revenue by Region
(000's) |
|
|
|
|
|
|
|
|
|
North
Sea |
$ |
21,077 |
|
|
$ |
22,932 |
|
|
$ |
36,578 |
|
|
$ |
44,009 |
|
|
$ |
76,778 |
|
Southeast
Asia |
|
4,382 |
|
|
|
2,487 |
|
|
|
10,989 |
|
|
$ |
6,869 |
|
|
|
24,318 |
|
Americas |
|
5,028 |
|
|
|
13,375 |
|
|
|
26,894 |
|
|
|
18,403 |
|
|
|
62,457 |
|
Total |
$ |
30,487 |
|
|
$ |
38,794 |
|
|
$ |
74,461 |
|
|
$ |
69,281 |
|
|
$ |
163,553 |
|
|
|
|
|
|
|
|
|
|
|
Rates Per Day
Worked |
|
|
|
|
|
|
|
|
|
North
Sea |
$ |
12,055 |
|
|
$ |
14,950 |
|
|
$ |
17,110 |
|
|
$ |
13,442 |
|
|
$ |
17,731 |
|
Southeast
Asia |
|
8,246 |
|
|
|
7,070 |
|
|
|
11,817 |
|
|
|
7,753 |
|
|
|
12,940 |
|
Americas |
|
9,797 |
|
|
|
11,365 |
|
|
|
17,991 |
|
|
|
10,653 |
|
|
|
18,939 |
|
Total |
$ |
10,939 |
|
|
$ |
12,982 |
|
|
$ |
16,428 |
|
|
$ |
11,925 |
|
|
$ |
17,232 |
|
|
|
|
|
|
|
|
|
|
|
Overall
Utilization |
|
|
|
|
|
|
|
|
|
North
Sea |
|
69.0 |
% |
|
|
62.2 |
% |
|
|
82.9 |
% |
|
|
65.5 |
% |
|
|
83.0 |
% |
Southeast
Asia |
|
41.4 |
% |
|
|
29.9 |
% |
|
|
70.4 |
% |
|
|
35.6 |
% |
|
|
77.6 |
% |
Americas |
|
17.1 |
% |
|
|
20.7 |
% |
|
|
55.1 |
% |
|
|
18.9 |
% |
|
|
61.2 |
% |
Total |
|
41.3 |
% |
|
|
38.4 |
% |
|
|
69.1 |
% |
|
|
39.8 |
% |
|
|
73.0 |
% |
|
|
|
|
|
|
|
|
|
|
Average Owned
Vessels |
|
|
|
|
|
|
|
|
|
North
Sea |
|
26.5 |
|
|
|
27.0 |
|
|
|
29.0 |
|
|
|
26.7 |
|
|
|
29.1 |
|
Southeast
Asia |
|
13.0 |
|
|
|
13.0 |
|
|
|
13.0 |
|
|
|
13.0 |
|
|
|
13.0 |
|
Americas |
|
30.3 |
|
|
|
30.0 |
|
|
|
30.0 |
|
|
|
30.2 |
|
|
|
30.0 |
|
Total |
|
69.8 |
|
|
|
70.0 |
|
|
|
72.0 |
|
|
|
69.9 |
|
|
|
72.1 |
|
|
|
|
|
|
|
|
|
|
|
Drydock
Days |
|
|
|
|
|
|
|
|
|
North
Sea |
|
3 |
|
|
|
18 |
|
|
|
- |
|
|
|
21 |
|
|
|
62 |
|
Southeast
Asia |
|
- |
|
|
|
- |
|
|
|
27 |
|
|
|
- |
|
|
|
36 |
|
Americas |
|
- |
|
|
|
- |
|
|
|
33 |
|
|
|
- |
|
|
|
167 |
|
Total |
|
3 |
|
|
|
18 |
|
|
|
60 |
|
|
|
21 |
|
|
|
265 |
|
|
|
|
|
|
|
|
|
|
|
Drydock
Expenditures (000's) |
$ |
63 |
|
|
$ |
827 |
|
|
$ |
2,436 |
|
|
$ |
890 |
|
|
$ |
11,409 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Balance Sheets |
|
As of |
(dollars in
thousands) |
|
June 30, |
|
March 31, |
|
June 30, |
|
2016 |
|
|
|
2016 |
|
|
2015 |
|
Current assets: |
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
10,647 |
|
|
$ |
19,669 |
|
|
$ |
78,390 |
|
Trade
accounts receivable, net of allowance for doubtful accounts
of $1,360, $1,466, and $1,477, respectively |
|
|
29,029 |
|
|
|
28,386 |
|
|
|
70,634 |
|
Other
accounts receivable |
|
|
7,102 |
|
|
|
7,113 |
|
|
|
8,158 |
|
Prepaid
expenses and other current assets |
|
|
15,965 |
|
|
|
16,009 |
|
|
|
21,057 |
|
Total
current assets |
|
|
62,743 |
|
|
|
71,177 |
|
|
|
178,239 |
|
|
|
|
|
|
|
|
Vessels,
equipment and other fixed assets at cost, net of accumulated
depreciation of $468,613, $473,341 and $461,485, respectively |
|
|
1,033,643 |
|
|
|
1,095,529 |
|
|
|
1,369,451 |
|
Construction in progress |
|
|
24,841 |
|
|
|
50,850 |
|
|
|
90,799 |
|
Goodwill |
|
|
- |
|
|
|
- |
|
|
|
23,755 |
|
Intangibles, net of accumulated amortization of $0, $0 and $20,182,
respectively |
|
|
- |
|
|
|
- |
|
|
|
14,416 |
|
Deferred
costs and other assets |
|
|
6,072 |
|
|
|
6,413 |
|
|
|
20,131 |
|
Total
assets |
|
$ |
1,127,299 |
|
|
$ |
1,223,969 |
|
|
$ |
1,696,791 |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Accounts
payable |
|
$ |
12,959 |
|
|
$ |
15,674 |
|
|
$ |
13,010 |
|
Income and
other taxes payable |
|
|
2,379 |
|
|
|
2,481 |
|
|
|
6,174 |
|
Accrued
personnel costs |
|
|
10,691 |
|
|
|
10,504 |
|
|
|
14,617 |
|
Accrued
interest cost |
|
|
8,193 |
|
|
|
1,544 |
|
|
|
9,649 |
|
Other
accrued liabilities |
|
|
6,215 |
|
|
|
7,125 |
|
|
|
6,888 |
|
Total
current liabilities |
|
|
40,437 |
|
|
|
37,328 |
|
|
|
50,338 |
|
Long-term
debt |
|
|
461,914 |
|
|
|
486,090 |
|
|
|
572,669 |
|
Long-term income
taxes: |
|
|
|
|
|
|
Deferred tax
liabilities |
|
|
60,061 |
|
|
|
63,060 |
|
|
|
93,603 |
|
Other income
taxes payable |
|
|
20,163 |
|
|
|
21,041 |
|
|
|
25,378 |
|
Other liabilities |
|
|
3,953 |
|
|
|
3,984 |
|
|
|
6,127 |
|
Stockholders'
equity: |
|
|
|
|
|
|
Preferred
stock, no par value; 2,000 authorized; no shares issued |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Class A
Common Stock, $0.01 par value; 60,000 shares authorized; 27,759,
28,017 and 27,934 shares issued and 26,830, 25,790 and 25,706
outstanding, respectively; Class B Common Stock $0.01 par value;
60,000 shares authorized; no shares issued |
|
|
277 |
|
|
|
276 |
|
|
|
272 |
|
Additional paid-in
capital |
|
|
417,929 |
|
|
|
418,208 |
|
|
|
414,751 |
|
Retained earnings |
|
|
305,419 |
|
|
|
352,999 |
|
|
|
646,043 |
|
Accumulated other
comprehensive income (loss) |
|
|
(118,433 |
) |
|
|
(92,976 |
) |
|
|
(43,042 |
) |
Treasury stock, at
cost |
|
|
(73,157 |
) |
|
|
(74,914 |
) |
|
|
(77,792 |
) |
Deferred compensation
expense |
|
|
8,736 |
|
|
|
8,873 |
|
|
|
8,444 |
|
Total
stockholders' equity |
|
|
540,771 |
|
|
|
612,466 |
|
|
|
948,676 |
|
Total
liabilities and stockholders' equity |
|
$ |
1,127,299 |
|
|
$ |
1,223,969 |
|
|
$ |
1,696,791 |
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Statements of Cash Flows (unaudited) |
Three Months Ended |
|
Six Months Ended |
(dollars in
thousands) |
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
2016 |
|
|
|
2016 |
|
|
2015 |
|
|
|
2016 |
|
|
2015 |
|
Cash flows from operating
activities: |
|
|
|
|
|
|
|
|
|
Net
loss |
$ |
(47,580 |
) |
|
$ |
(91,182 |
) |
|
$ |
(8,245 |
) |
|
$ |
(138,762 |
) |
|
$ |
(13,371 |
) |
Adjustments
to reconcile net loss to net cash provided by (used in) operations:
|
|
|
|
|
|
|
|
|
|
Depreciation
and amortization |
|
14,911 |
|
|
|
16,039 |
|
|
|
18,765 |
|
|
|
30,950 |
|
|
|
37,253 |
|
Loss on sale
of assets |
|
5,914 |
|
|
|
4 |
|
|
|
- |
|
|
|
5,918 |
|
|
|
Stock-based
compensation |
|
1,233 |
|
|
|
1,498 |
|
|
|
1,845 |
|
|
|
2,731 |
|
|
|
3,649 |
|
Amortization
of deferred financing costs |
|
1,321 |
|
|
|
806 |
|
|
|
623 |
|
|
|
2,127 |
|
|
|
1,205 |
|
Provision
for doubtful accounts receivable, net of write-offs |
|
- |
|
|
|
23 |
|
|
|
(63 |
) |
|
|
23 |
|
|
|
(955 |
) |
Impairment
charges |
|
46,151 |
|
|
|
116,657 |
|
|
|
- |
|
|
|
162,808 |
|
|
|
- |
|
Gain on
extinguishment of debt |
|
(25,792 |
) |
|
|
(10,120 |
) |
|
|
- |
|
|
|
(35,912 |
) |
|
|
- |
|
Deferred
income tax benefit |
|
(2,976 |
) |
|
|
(35,624 |
) |
|
|
(5,391 |
) |
|
|
(38,600 |
) |
|
|
(9,925 |
) |
Foreign
currency transaction (gain) loss |
|
1,289 |
|
|
|
(223 |
) |
|
|
(1,043 |
) |
|
|
1,066 |
|
|
|
(477 |
) |
Change in operating assets
and liabilities: |
|
|
|
|
|
|
|
|
|
Accounts
receivable |
$ |
(1,553 |
) |
|
$ |
12,859 |
|
|
$ |
8,360 |
|
|
$ |
11,306 |
|
|
$ |
19,082 |
|
Prepaids and
other |
|
(253 |
) |
|
|
659 |
|
|
|
49 |
|
|
|
406 |
|
|
|
(3,510 |
) |
Accounts
payable |
|
(2,279 |
) |
|
|
2,573 |
|
|
|
(5,608 |
) |
|
|
294 |
|
|
|
(9,371 |
) |
Other
accrued liabilities and other |
|
5,231 |
|
|
|
(13,869 |
) |
|
|
5,490 |
|
|
|
(8,638 |
) |
|
|
(6,240 |
) |
Net cash
provided by (used in) operating activities |
$ |
(4,383 |
) |
|
$ |
100 |
|
|
$ |
14,782 |
|
|
$ |
(4,283 |
) |
|
$ |
17,340 |
|
Cash flows from investing
activities: |
|
|
|
|
|
|
|
|
|
Purchases of
vessels, equipment and other fixed assets |
|
(6,438 |
) |
|
|
(7,200 |
) |
|
|
(9,686 |
) |
|
|
(13,638 |
) |
|
|
(21,304 |
) |
Release of
deposits held in escrow |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
3,683 |
|
Proceeds
from disposition of vessels and equipment |
|
1,400 |
|
|
|
29 |
|
|
|
- |
|
|
|
1,429 |
|
|
|
715 |
|
Net cash
used in investing activities |
|
(5,038 |
) |
|
|
(7,171 |
) |
|
|
(9,686 |
) |
|
|
(12,209 |
) |
|
|
(16,906 |
) |
Cash flows from financing
activities: |
|
|
|
|
|
|
|
|
|
Proceeds
from borrowings under revolving loan facilities |
|
24,194 |
|
|
|
15,000 |
|
|
|
12,000 |
|
|
|
39,194 |
|
|
|
28,000 |
|
Repayment of
secured credit facilities |
|
(23,568 |
) |
|
|
(9,880 |
) |
|
|
- |
|
|
|
(33,448 |
) |
|
|
- |
|
Debt
issuance costs |
|
(62 |
) |
|
|
(769 |
) |
|
|
(35 |
) |
|
|
(831 |
) |
|
|
(1,226 |
) |
Proceeds
from issuance of stock |
|
106 |
|
|
|
121 |
|
|
|
221 |
|
|
|
227 |
|
|
|
528 |
|
Net cash
provided by investing activities |
$ |
670 |
|
|
$ |
4,472 |
|
|
$ |
12,186 |
|
|
$ |
5,142 |
|
|
$ |
27,302 |
|
Effect of
exchange rate changes on cash |
|
(271 |
) |
|
|
329 |
|
|
|
1,261 |
|
|
|
58 |
|
|
|
(131 |
) |
Net increase (decrease) in
cash and cash equivalents |
|
(9,022 |
) |
|
|
(2,270 |
) |
|
|
18,543 |
|
|
|
(11,292 |
) |
|
|
27,605 |
|
Cash and cash equivalents
at beginning of period |
|
19,669 |
|
|
|
21,939 |
|
|
|
59,847 |
|
|
|
21,939 |
|
|
|
50,785 |
|
Cash and cash equivalents
at end of period |
$ |
10,647 |
|
|
$ |
19,669 |
|
|
$ |
78,390 |
|
|
$ |
10,647 |
|
|
$ |
78,390 |
|
Supplemental cash flow
information: |
|
|
|
|
|
|
|
|
|
Interest
paid, net of interest capitalized |
$ |
1,300 |
|
|
$ |
15,353 |
|
|
$ |
(588 |
) |
|
$ |
16,073 |
|
|
$ |
14,773 |
|
Income taxes
paid, net |
|
757 |
|
|
|
449 |
|
|
|
538 |
|
|
|
1,691 |
|
|
|
934 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract
Cover |
As of July 26, 2016 |
|
As of July 22, 2015 |
|
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
Region: |
Vessel Days |
|
Vessel Days |
|
Vessel Days |
|
Vessel Days |
|
|
North Sea |
|
44 |
% |
|
|
17 |
% |
|
|
65 |
% |
|
|
38 |
% |
|
|
Southeast Asia |
|
37 |
% |
|
|
17 |
% |
|
|
38 |
% |
|
|
15 |
% |
|
|
Americas |
|
12 |
% |
|
|
0 |
% |
|
|
22 |
% |
|
|
7 |
% |
|
|
Overall Fleet |
|
28 |
% |
|
|
10 |
% |
|
|
42 |
% |
|
|
21 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Measures: Three Months
Ended June 30, 2016 |
(dollars in millions,
except per share data) |
Operating Income (Loss) |
|
Other Income (Expense) |
|
Tax (Provision) Benefit |
|
Net Income (Loss) |
|
Diluted EPS |
Excluding Gains and
Costs |
$ |
(14.0 |
) |
|
$ |
(9.2 |
) |
|
$ |
8.9 |
|
|
$ |
(14.3 |
) |
|
$ |
(0.57 |
) |
Impairment Charges |
|
(46.2 |
) |
|
|
- |
|
|
|
2.8 |
|
|
|
(43.3 |
) |
|
|
(1.73 |
) |
Gain on Extinguishment
of Debt |
|
- |
|
|
|
25.8 |
|
|
|
(9.0 |
) |
|
|
16.8 |
|
|
|
0.67 |
|
Loss on Asset Sale |
|
(5.9 |
) |
|
|
- |
|
|
|
- |
|
|
|
(5.9 |
) |
|
|
(0.24 |
) |
Loan Fee Write Off |
|
- |
|
|
|
(0.9 |
) |
|
|
0.3 |
|
|
|
(0.6 |
) |
|
|
(0.02 |
) |
Workforce Redundancy
Charges |
|
(0.3 |
) |
|
|
- |
|
|
|
- |
|
|
|
(0.3 |
) |
|
|
(0.01 |
) |
U.S. GAAP |
$ |
(66.3 |
) |
|
$ |
15.7 |
|
|
$ |
3.0 |
|
|
$ |
(47.6 |
) |
|
$ |
(1.90 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Measures: Three Months
Ended March 31, 2016 |
(dollars in millions,
except per share data) |
Operating Income (Loss) |
|
Other Income (Expense) |
|
Tax (Provision) Benefit |
|
Net Income (Loss) |
|
Diluted EPS |
Excluding Gains and
Costs |
$ |
(10.1 |
) |
|
$ |
(8.1 |
) |
|
$ |
5.7 |
|
|
$ |
(12.5 |
) |
|
$ |
(0.50 |
) |
Impairment Charges |
|
(116.7 |
) |
|
|
- |
|
|
|
33.1 |
|
|
|
(83.5 |
) |
|
|
(3.35 |
) |
Gain on Extinguishment
of Debt |
|
- |
|
|
|
10.1 |
|
|
|
(3.5 |
) |
|
|
6.6 |
|
|
|
0.27 |
|
Gain (Loss) on Asset
Sale |
|
0.0 |
|
|
|
- |
|
|
|
- |
|
|
|
0.0 |
|
|
|
0.00 |
|
Loan Fee Write Off |
|
- |
|
|
|
(0.3 |
) |
|
|
0.1 |
|
|
|
(0.2 |
) |
|
|
(0.01 |
) |
Workforce Redundancy
Charges |
|
(1.5 |
) |
|
|
- |
|
|
|
0.0 |
|
|
|
(1.5 |
) |
|
|
(0.06 |
) |
U.S. GAAP |
$ |
(128.3 |
) |
|
$ |
1.7 |
|
|
$ |
35.4 |
|
|
$ |
(91.2 |
) |
|
$ |
(3.66 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessel Count by Reporting Segment |
|
|
|
|
|
|
|
|
North Sea |
|
Southeast Asia |
|
Americas |
|
Total |
Owned Vessels
as of April 25, 2016 |
|
27 |
|
|
|
13 |
|
|
30 |
|
|
70 |
|
Newbuild Deliveries/Additions |
|
0 |
|
|
|
0 |
|
|
1 |
|
|
1 |
|
Sales & Dispositions |
|
(1 |
) |
|
|
(2 |
) |
|
0 |
|
|
(3 |
) |
Owned Vessels
as of July 26, 2016 |
|
26 |
|
|
|
11 |
|
|
31 |
|
|
68 |
|
Managed Vessels |
|
3 |
|
|
|
0 |
|
|
0 |
|
|
3 |
|
Total Fleet as
of July 26, 2016 |
|
29 |
|
|
|
11 |
|
|
31 |
|
|
71 |
|
|
|
|
|
|
|
|
|
Contact:
Michael Newman
Investor Relations
E-mail: Michael.Newman@GulfMark.com
(713) 963-9522