Gulfmark Offshore (GLF), provides marine transportation services to the energy industry, has announced a 5.77 times jump in profit for the quarter ended Mar. 31, 2014, helped by strong growth in revenue and operating margin.
The company earned $16.56 million or $0.63 a share in the first-quarter, compared with $2.87 million or $0.11 a share a year ago. Analysts on average had predicted net income of $0.58 a share.
Revenue during the first-quarter climbed 23.44 percent to $119.60 million from $96.89 million in the last year period.
Gross margin expanded by 777 basis points over the last year period to 52.93 percent. Total expenses as a percentage of revenues decreased to 80.57 percent from 90.64 percent in the same period last year. That resulted in improvement of 1,007 basis points in operating margin to 19.43 percent.
The company reported operating income of $23.24 million, compared with an operating income of $9.07 million in the previous year period.
Quintin Kneen, president and CEO, commented, "We came in just under the midpoint of our first-quarter revenue guidance, which resulted from slightly lower utilization than we originally anticipated, but overall, the average day rate increased during the quarter and we feel comfortable reaffirming our full-year revenue guidance of between $525 and $555 million. Consolidated revenue for the quarter increased 23% year-over-year, and we expect revenue will increase more than 10% in the second quarter, to be in the range of $131 to $136 million."
"We remain optimistic about the near-term and long-term fundamentals of our business, and we will continue to make strategic fleet investments and divestitures that create long-term value for our stockholders and satisfy the intensifying customer demand for safe, efficient, reliable, high-specification vessels around the world."
Cash Flow
Gulfmark Offshore has generated cash of $17.65 million from operating activities during the quarter, as against cash outgo of $6.16 million in the last year period.
The company has spent $96.12 million in cash to meet investing activities during the quarter, as against cash outgo of $37.32 million in the year period. It has made net capital expenditure of $96.12 million during the quarter, which was higher by 112.32 percent or $50.85 million from a year ago.
The company has generated net cash of $43.51 million from financing activities during the quarter, as against cash outgo of $20.34 million in the last year period.
The company has borrowed net of $50.04 million through debt during the quarter. It has raised net of $0.29 million by issuing common stocks.
The company's cash dividend payment increased 3.33 percent or $0.22 million to $6.82 million. Dividend payment accounted for 38.67 percent of operating cash flow for the quarter, of Mar. 31, 2014 from 107.26 percent in the same period previous year.
As on Mar. 31, 2014, Gulfmark Offshore's cash balance stood at $25.70 million, down 78.42 percent or $93.38 million from Mar. 31, 2013.
Working Capital
Gulfmark Offshore witnessed reduction in the working capital over the last year. It stood at $101.64 million as at Mar. 31, 2014, down $82.64 million or 44.84 percent from $184.28 million on Mar. 31, 2013. The company's current ratio decreased to 2.69 as at Mar. 31, 2014 from 3.91 on Mar. 31, 2013.
The company's cash conversion cycle (CCC) decreased to 44 days for first-quarter from 46 days for the last year. CCC is a liquidity metric which expresses the length of time (in days) that a company uses to sell inventory, collect receivables and pay its accounts payable. Decreasing or steady CCCs are good for business.
Days' sales outstanding went down to 85 days for first-quarter compared with 91 days for the last year. This indicates the company has shortened credit period to clients for making payment.
While days' payable outstanding went down to 41 days for first-quarter from 45 days for the last year. This reflects that the company has made early payment to vendors compared to prior year period.
Debt Position
Gulfmark Offshore has witnessed an increase in long-term debt over the last year. As at Mar. 31, 2014, the company's long-term debt stood at $551.76 million, up 10.14 percent or $50.79 million from Mar. 31, 2013.
The company's total debt accounts for 30.15 percent of total assets on Mar. 31, 2014, compared with 29.83 percent on Mar. 31, 2013. The company's debt to equity ratio remained almost stable at 0.51 for the quarter ended Mar. 31, 2014 when compared with the last year.
Interest coverage ratio, which determines how easily a company can pay interest expenses on outstanding debt, has improved to 3.45 from 1.42 in the same period last year.
