GulfMark on track to repay Rigdon Marine-related debt by end of 2010

By Jennifer Lanning Drey

Portland, Ore., April 27 - GulfMark Offshore Inc. remains on track to meet its goal of paying off all debt resulting from the acquisition of Rigdon Marine Corp. by the end of 2010, Quintin Kneen, the company's chief financial officer, said Monday during its first-quarter earnings conference call.

GulfMark reduced net debt by $20.3 million during the first quarter, a pace Kneen called "a little off" from that of prior quarters due to seasonally higher working capital requirements during the period.

Kneen noted that GulfMark has $210 million of Rigdon-related debt maturing on June 30, 2010, which will be reclassified in the second quarter as current debt unless refinanced prior to quarter-end. The company is exploring the best way of dealing with the debt, he said.

GulfMark had total outstanding debt of $477.2 million at March 31 and cash on hand of $116.4 million.

First-quarter cash flow from operations was $37.1 million, compared with $23.0 million for the same period in 2008.

The company estimates it will have cash commitments related to its new-build program of $71.1 million for the balance of 2009, which are expected to be funded from cash on hand. The program has six remaining vessels, three of which will be delivered in 2009 and the remainder in 2010.

The 2010 capital requirement is estimated at $47 million.

During the first quarter, GulfMark saw strength in some of its markets, primarily Southeast Asia and Brazil, while others reflected weakness, Bruce Streeter, the company's chief executive officer, said during the call.

Going forward, GulfMark will adjust its strategy as changes occur. However, the CEO noted that its larger fleet is currently able to generate a high level of identifiable cash flow even when taking into account "less than ideal" market conditions.

GulfMark reported revenue of $108.8 million in the first quarter, up 30.5% over the prior year. GulfMark Americas, which was acquired on July 1, 2008, contributed revenue of $36.3 million during the period.

GulfMark is a Houston-based provider of marine transportation services to the energy industry.

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