For the year ended December 31, 2006 net income was a record $89.7 million, or $4.28 per diluted share, on record revenue levels of $250.9 million. For the year ended December 31, 2005, the reported net income was $38.4 million, or $1.86 per diluted share. Operating income for the year ended December 31, 2006 was $107.3 million compared to $59.7 million for the year ended December 31, 2005. The 2006 results include $10.2 million, or $0.49 per diluted share in gains on the sale of two of the older vessels in the fleet, the Highland Patriot and the Sentinel.
The fourth quarter 2006 financial results, when compared to the same period in 2005, reflect the continued strength in the market. Operating income for the three months ended December 31, 2006 was $34.0 million, compared to $13.1 million for the same period in 2005. The increase in operating income for the quarter was mainly driven by the 34% increase in revenue from $51.6 million in 2005 to $69.0 million in 2006. The increase in revenue resulted mainly from higher day rates, and the addition of the new vessels, the Sea Intrepid for the full year, and the Sea Guardian and Sea Sovereign for a portion of the year, partially offset by the lost revenue from the vessels sold.
Bruce Streeter, President and CEO of the Company commented: "The year 2006 exceeded our expectations from the outset and continued throughout the year. Our results for the fourth quarter were bolstered by demand and day rates, which carried over from the strong summer and fall periods in the North Sea and steady demand in our other markets. The addition of the two new vessels in Southeast Asia continues to add to our capabilities to meet the growing demands of our customers in that region. We have set a number of records from both an earnings and operating perspective, which will serve as a foundation for the years to come. As a result, our balance sheet is the strongest in our history and will allow us to take advantage of growth opportunities as and when they occur.
"As we look to 2007 and beyond, our overall contract cover continues to remain strong with our contract cover for 2007 and 2008 approximately 70% and 42%, respectively. This will help provide earnings stability and create a strong cash flow as we continue on our new build program. The new build program reflects a disciplined approach to matching our equipment to our customers' needs, increases asset value and enhances our earnings potential. In 2007, four of our nine new build vessels are scheduled to be delivered. Two of the new design PSV's in the North Sea are due to be delivered at the end of the first and fourth quarters. Toward the end of the third quarter, we anticipate delivery in Southeast Asia of the Sea Supporter while the first of the as yet unnamed AHTS's being built in Singapore is anticipated to be delivered during the fourth quarter. We expect demand for vessel services to remain strong throughout all of our markets during 2007 and believe that our strategy of both growing and replacing our fleet with vessels suited to a variety of support applications is the prudent way to continue to build shareholder value in the long term."
At December, 2006 the Company had working capital of $104.9 million, including $82.8 million in cash. The Company repaid all of the $83.2 million due under the revolving credit facility during the fourth quarter and at December 31 had only $159.5 million of 7.75% senior notes outstanding as long-term debt.
GulfMark Offshore, Inc. provides marine transportation services to the energy industry through a fleet of 59 offshore support vessels, primarily in the North Sea, offshore Southeast Asia, and the Americas.
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