GulfMark expecting to refinance Rigdon Marine-related debt by year-end

By Jennifer Lanning Drey

Portland, Ore., July 27 - GulfMark Offshore Inc. expects to refinance $210 million of debt related to its acquisition of Rigdon Marine Corp. by the end of 2009, Quintin Kneen, chief financial officer of GulfMark, said Monday during the company's earnings conference call for the second quarter.

The refinancing is likely to result in a 2-percentage-point increase to the interest rate for the debt, which is currently scheduled to mature on June 30, 2010, Kneen said.

"Obviously, I'm not in a rush to refinance due to the increase in the rates and the additional fees, but given the conditions of the global bank market, we wanted to get a head start on this refinancing," he said.

GulfMark had $468.2 million of total debt at June 30. Net debt was $302.3 million, representing a $58.5 million decrease from March 31, the CFO said.

Second-quarter cash flow from operations was $54.2 million, compared with $53.6 million for the same period in 2008.

The company ended the current-year quarter with $165.9 million of cash on hand and $95.0 million available under its $175.0 million revolving credit facility.

Estimated cash commitments for the remainder of 2009 for GulfMark's new-build program are $56.4 million and are expected to be funded from cash on hand.

Capital requirements under the program are estimated to be about $50 million in 2010.

For the second quarter, GulfMark reported revenue of $104.7 million, a 28% increase over the comparable period in the prior year. Operating income increased 26% over the same period in 2008.

The increases were primarily due to the July 1, 2008 acquisition of GulfMark Americas, which the company said contributed revenue of $27.9 million and operating income of $5.2 million in the second quarter.

Kneen said GulfMark's second-quarter results represented relative strength in the North Sea and Southeast Asia and a tough market in the Gulf of Mexico.

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

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