With the substantial increase in the number of subsea well completions projected over the next few years, the global need for subsea infrastructure, including pipeline installations, should accelerate. Based on Infield Energy Data Analysts’ estimates, over 76,000 km of offshore pipelines are expected to be installed worldwide during the five-year period from 2006 through 2010, which represents a significant increase over the approximately 37,000 km of offshore pipelines installed globally in the five-year period between 2000 and 2004.

The robust conditions in the worldwide oil and gas industry and related increase in offshore expenditures have resulted in improved utilization and dayrates for offshore supply and support vessels. For example, according to ODS-Petrodata, the average dayrate for platform supply vessels operating in the North Sea spot market with dead weight tonnage capacities of between 3,000 to 4,000 tons has increased approximately 163% from July 2004 to July 2005.

Support services include standby rescue services, anchor handling, towing services and other specialty services. Standby services are provided when a standby vessel is required by the regulatory authorities to standby an offshore installation to provide emergency rescue and evacuation support. These standby services are required to be provided 24-hours-a-day, 365-days-a-year, to all offshore oil and natural gas facilities. Anchor handling and towing services include assistance in deploying rig anchors to secure a rig in its desired location and towing rigs between locations. Specialty services include providing a marine platform for remote operated vehicles, or ROV, or manned diving operations and assisting in seismic exploration, as well as assisting in subsea construction and maintenance.

Supply base services involve managing shorebase and dock facilities required to support offshore oil and natural gas projects. These services include coordinating and deploying all goods and services destined for the offshore facility, managing and operating the dock, warehouse and marshalling yards and coordinating vessels to and from shore to offshore facilities. Providing supply base services is a natural complement to providing vessel supply and support services.

In addition to the marine services provided to offshore oil and gas companies and subsea construction and maintenance services, the Company has in the past exploited the flexibility of its vessels and crews in order to deploy the Company’s vessels for other marine services and to maximize the efficient utilization of its fleet. These other marine services are generally comprised of ocean towing and salvage work.

Operating expenses were $1.2 million for fiscal 2005 compared to $4.9 million for fiscal 2004, a decrease of $3.7 million or 75.5%.

Costs and expenses for the corporate and other segment were $3.4 million for fiscal 2005, compared to $2.0 million for fiscal 2004, an increase of $1.4 million or 70.0%.

Depreciation and amortization was $14.4 million in fiscal 2005 compared to $11.7 million in fiscal 2004, an increase of $2.7 million or 23.1%.

General and administrative costs were $5.2 million in fiscal 2005 as compared to $4.8 million in fiscal 2004, an increase of $0.4 million or 8.3%.