Cal Dive International, Inc. (NYSE: DVR) reported a second
quarter 2013 loss of $1.7 million, or $0.02 per diluted share, on
revenues of $121.0 million. Included in the loss is a $4.0 million
after-tax gain related to the final marked-to-market adjustment of
the derivative liability on the Company’s convertible debt. This
compares to a loss of $5.7 million, or $0.06 per diluted share, on
revenues of $120.3 million for the second quarter 2012. For the
second quarter 2013, the Company reported EBITDA of $10.2 million
compared to $10.7 million for the second quarter 2012.
Cal Dive also announced today that it was awarded a contract on
August 6, 2013, from Pemex Exploración y Producción that is
expected to generate revenue of approximately $40 million. This
award is in addition to the three Pemex awards already announced in
2013 for approximately $250 million. This most recent award brings
the total expected revenue from contracts awarded by Pemex to Cal
Dive this year to approximately $290 million. This latest contract
is for the procurement, installation and commissioning of 3.5
kilometers of 20 inch subsea pipeline and associated tie-ins to an
existing platform. The offshore construction is expected to
commence toward the end of the fourth quarter 2013 with the
remainder of the work expected to be performed during the first
quarter 2014.
Commenting on the results and the contract award, Cal Dive’s
Chairman, President and Chief Executive Officer, Quinn Hébert,
stated, “The second quarter saw increased revenue and profitability
from all of our international regions. For the quarter our
international revenues increased by over 60% when compared to the
second quarter 2012 and accounted for 65% of our total consolidated
revenues. We continue to focus on our strategy of expanding our
international operations, and expect that approximately 70% of our
total 2013 annual consolidated revenues will come from
international locations, led by work in Mexico.
“The U.S. Gulf of Mexico shallow water market overall continued
to be sluggish during the second quarter and the work season had a
late start due to weather during April and into May. Furthermore,
we experienced a decline in the profitability of our two derrick
barges year-over-year. The Pacific was in drydock much of the
quarter but was fully utilized during second quarter last year on a
large decommissioning project, and the Atlantic had low utilization
in the quarter due to permitting delays for salvage and
decommissioning projects and inclement weather at the very end of
June. However, the outlook for the salvage and decommissioning
market remains steady and these two assets are expected to have
good utilization during the third quarter.”
Mr. Hébert continued, “We are very pleased to have just been
awarded our fourth contract from Pemex this year. Looking ahead to
the second half of the year, we will commence offshore operations
in Mexico later in the third quarter. Our offshore schedule is
always subject to change, but currently we expect to complete more
work in Mexico during the fourth quarter than the third quarter.
Therefore we expect the fourth quarter financial results to be
comparable with the third quarter as the Mexico activity will
offset the start of the typical winter season in the Gulf of
Mexico. The remainder of the Mexico work will be completed during
the first half of 2014 giving us better than usual utilization
during the typically slow winter season. We will continue to
actively bid more projects in Mexico over the remainder of 2013 for
work in 2014.”
Financial Highlights
- Backlog: Contracted backlog was $400
million as of June 30, 2013 and does not include the recently
awarded $40 million contract from Pemex. This compares to backlog
of $172 million at December 31, 2012 and $238 million at June 30,
2012. Of the backlog as of June 30, 2013, $340 million relates to
international work and the remainder relates to work in the U.S.
Gulf of Mexico, with 70% of the total backlog expected to be
performed during the remainder of 2013.
- Revenues: Second quarter 2013 revenues
increased by $0.7 million to $121.0 million compared to the second
quarter 2012. Although revenues were essentially flat, the
consolidated revenue mix changed significantly. International
revenues accounted for 65% and domestic revenues accounted for 35%
of total consolidated revenues for the second quarter 2013,
compared to 39% international and 61% domestic for the second
quarter 2012.
- Gross Profit: Second quarter 2013 gross
profit was $2.6 million, an improvement of $2.5 million compared to
the second quarter 2012. The improvement from last year is
primarily attributable to the cost saving initiatives the Company
implemented during the second half of last year as well as improved
margins in the Company’s international markets. These improvements
were partially offset by the deterioration in domestic results due
to lower utilization of the Company’s derrick barges.
- G&A: Second quarter 2013 G&A
decreased by $2.0 million to $10.8 million compared to the second
quarter 2012. The decrease is primarily due to lower stock based
compensation expense and headcount reductions relating to the
continuing effect of cost saving initiatives implemented during the
second half of 2012. As a percentage of revenues, G&A was 8.9%
for the second quarter 2013 compared to 10.7% for the second
quarter 2012.
- Interest Expense: Second quarter 2013
net interest expense increased by $1.3 million to $4.6 million
compared to the second quarter 2012, primarily due to non-cash
interest expense relating to the accretion of the debt discount on
the Company’s convertible debt, and higher outstanding balances on
the Company’s revolving credit facility during the quarter to fund
the up-front procurement of pipe and materials required under three
of the Company’s new contracts in Mexico.Additionally, the Company
recorded a final marked-to-market adjustment of $6.4 million in the
fair value of the derivative liability as a reduction to interest
expense related to the embedded conversion feature of the Company’s
convertible debt. On May 14, 2013, the Company obtained stockholder
approval for the issuance of the maximum number of shares necessary
to accommodate full conversion of its convertible debt. As of that
date, the embedded conversion feature is no longer required to be
separately valued and accounted for as a derivative liability and
was reclassified as additional paid-in capital.
- Income Tax: The effective tax benefit
rate for the second quarter 2013 was 38.0% compared to a tax
benefit rate of 38.4% for the second quarter 2012. The difference
in the effective tax rate from the statutory rate is due to the mix
of pre-tax profit and loss between U.S. and international taxing
jurisdictions with varying statutory rates.
- Balance Sheet: As of June 30, 2013,
total debt consisted of $86.25 million in convertible notes, $32.7
million under a senior secured term loan, $61.9 million outstanding
under a revolving credit facility and $20.0 million under an
unsecured term loan. Cash and cash equivalents were $8.5 million,
for a net debt position of $192.3 million at June 30, 2013,
compared to net debt positions of $151.8 million at December 31,
2012 and $148.7 million at June 30, 2012. The net secured debt
amount that is subject to financial covenants was $94.6 million at
June 30, 2013, $65.5 million at December 31, 2012 and $148.8
million at June 30, 2012. Total debt presented on the consolidated
balance sheet at June 30, 2013 is net of a debt discount of $20.8
million on the Company’s convertible debt.The increase in the
Company’s revolving credit facility during the second quarter 2013
is primarily due to three of the new contract awards in Mexico for
Pemex that have large up-front procurement requirements for pipe
and other project materials. Additionally, the Company experienced
its typical increased seasonal working capital demands, due to the
seasonal increase in offshore activity in the U.S. Gulf of Mexico.
As of June 30, 2013 the Company had $49.3 million of remaining
borrowing capacity under its revolving credit facility and $8.5
million in cash. Additionally, to help fund the working capital
demands for Mexico, the Company entered into a $20.0 million
unsecured term loan during the second quarter 2013. The debt under
this facility is not included as part of the Company’s leverage
ratio covenant under its senior secured credit facility.During the
second quarter 2013, the Company sold one of its Louisiana
shore-based facilities for $6.1 million and certain dive equipment
for $3.4 million. The Company received net proceeds of $7.8
million, which was used to repay a portion of the Company’s secured
term loan. The remaining $1.7 million in sale proceeds is expected
to be received before the end of 2013 and is expected to be used to
repay an additional portion of the Company’s secured term
loan.
Conference Call Information
Further details will be provided during Cal Dive’s conference
call, scheduled for 9:00 a.m. Central Time tomorrow, August 8,
2013. The teleconference dial-in numbers are: (866) 510-0707
(domestic), (617) 597-5376 (international), passcode 89623658.
Investors will be able to obtain the slide presentation and listen
to the live conference call broadcast from the Investor Relations
page at www.caldive.com.
A replay of the call will also be available from the Investor
Relations-Audio Archives page. A telephonic replay of the
conference call will be available beginning approximately two hours
after the completion of the conference call and will remain
available for one week. To access the replay, call (888) 286-8010
(domestic) or (617) 801-6888 (international), passcode
11320974.
About Cal Dive International, Inc.
Cal Dive International, Inc., headquartered in Houston, Texas,
is a marine contractor that provides manned diving, pipelay and
pipe burial, platform installation and salvage, and light well
intervention services to the offshore oil and natural gas industry
on the Gulf of Mexico OCS, Northeastern U.S., Latin America,
Southeast Asia, China, Australia, West Africa, the Middle East, and
Europe, with a diversified fleet of surface and saturation dive
support vessels and construction barges.
Cautionary Statement
This press release may include “forward-looking” statements that
are generally identifiable through the use of words such as
“believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,”
“project” and similar expressions and include any statements that
are made regarding earnings expectations. The forward-looking
statements speak only as of the date of this release, and the
Company undertakes no obligation to update or revise such
statements to reflect new information or events as they occur.
These statements are based on a number of assumptions, risks and
uncertainties, many of which are beyond the control of the Company.
Investors are cautioned that any such statements are not guarantees
of future performance and that actual future results may differ
materially due to a variety of factors, including intense
competition and pricing pressure in the Company’s industry, the
risks of cost overruns on fixed price contracts, the uncertainties
inherent in competitive bidding for work, the operational risks
inherent in the Company’s business, risks associated with the
Company’s increasing presence internationally, and other risks
detailed in the Company’s most recently filed Annual Report on Form
10-K.
CAL DIVE INTERNATIONAL, INC. and SUBSIDIARIES Condensed
Consolidated Statements of Operations (in thousands, except per
share amounts) Three Months Ended Six Months Ended
June 30, June 30, 2013 2012 2013 2012 (unaudited) (unaudited)
Revenues $ 120,986 $ 120,321 $ 201,905 $ 180,338 Cost of
sales 118,356 120,168 210,792
196,605 Gross profit (loss) 2,630 153 (8,887 )
(16,267 ) General and administrative expenses 10,802 12,846 22,711
26,338 Asset impairment - - 125 1,351 (Gain) on sale of assets, net
(3,143 ) (3,522 ) (3,123 )
(3,333 ) Operating loss (5,029 ) (9,171 ) (28,600 ) (40,623 )
Interest expense, net 4,630 3,308 9,262 5,608 Interest expense -
adjustment to conversion feature of convertible debt (6,425 ) -
(6,362 ) - Other (income) expense, net 376 144
455 (197 ) Loss before income taxes
(3,610 ) (12,623 ) (31,955 ) (46,034 ) Income tax benefit
(1,372 ) (4,851 ) (10,691 ) (13,240 ) Net loss
(2,238 ) (7,772 ) (21,264 ) (32,794 ) Loss attributable to
noncontrolling interest (570 ) (2,073 ) (1,946
) (2,790 ) Loss attributable to Cal Dive $ (1,668 ) $ (5,699
) $ (19,318 ) $ (30,004 ) Loss per share attributable to Cal
Dive: Basic and diluted $ (0.02 ) $ (0.06 ) $ (0.21 ) $ (0.32 )
Weighted average shares outstanding: Basic and diluted
93,748 92,678 93,808
92,699 Other financial data: Depreciation and
amortization $ 13,631 $ 15,914 $ 27,811 $ 30,550 Non-cash stock
compensation expense 1,406 2,000 2,854 4,378 EBITDA 10,202
10,672 3,681 (1,282 ) CAL DIVE INTERNATIONAL,
INC. and SUBSIDIARIES Condensed Consolidated Balance Sheets (in
thousands) June 30, December 31, 2013 2012 ASSETS
(unaudited) Current assets: Cash $ 8,468 $ 8,343 Accounts
receivable, net 127,177 135,205 Other current assets 35,449
36,361 Total current assets 171,094
179,909 Net property and equipment
413,534 423,536 Other assets, net 30,547
27,228 Total assets $ 615,175 $ 630,673
LIABILITIES AND EQUITY Current liabilities:
Accounts payable $ 67,383 $ 73,480 Other current liabilities 31,649
37,995 Current maturities of long-term debt 13,989
4,219 Total current liabilities 113,021
115,694 Long-term debt 165,989 133,116
Derivative liability for conversion feature of convertible debt -
22,456 Other long-term liabilities 77,880
91,132 Total liabilities 356,890
362,398 Total equity 258,285 268,275
Total liabilities and equity $ 615,175 $ 630,673
Reconciliation of Non-GAAP Financial Measures
For the Periods Ended June 30, 2013 and 2012 (in thousands)
In addition to net income, one primary measure that the Company
uses to evaluate financial performance is earnings before net
interest expense, taxes, depreciation and amortization, or EBITDA.
The Company includes other non-cash items and adjustments in its
definition of EBITDA outlined below. The Company uses EBITDA to
measure operational strengths and the performance of its business
and not to measure liquidity. EBITDA does not reflect the periodic
costs of certain capitalized tangible and intangible assets used in
generating revenues, and should be considered in addition to, and
not as a substitute for, net income and other measures of financial
performance reported in accordance with GAAP. Furthermore, EBITDA
presentations may vary among companies; thus, the Company's EBITDA
may not be comparable to similarly titled measures of other
companies.
The Company believes EBITDA is useful as a measurement tool
because it helps investors evaluate and compare operating
performance from period to period by removing the impact of capital
structure (primarily interest charges from outstanding debt) and
asset base (primarily depreciation and amortization of vessels)
from operating results. The Company's management uses EBITDA in
communications with lenders, rating agencies and others, concerning
financial performance.
The following table presents a reconciliation of EBITDA to
income (loss) attributable to Cal Dive, which is the most directly
comparable GAAP financial measure of the Company's operating
results:
Three Months Ended Six
Months Ended June 30, June 30, 2013 2012 2013 2012
EBITDA (unaudited) $ 10,202 $
10,672 $ 3,681 $ (1,282 )
Less: Depreciation & amortization 13,631 15,914 27,811
30,550 Less: Income tax benefit (1,372 ) (4,851 ) (10,691 ) (13,240
) Less: Net interest expense 4,630 3,308 9,262 5,608 Less: Interest
expense - conversion feature adjustment (6,425 ) - (6,362 ) - Less:
Non-cash stock compensation expense 1,406 2,000 2,854 4,378 Less:
Severance charges - - - 75 Less: Non-cash impairment charges
- - 125 1,351
Loss attributable to Cal Dive $ (1,668 ) $ (5,699 ) $
(19,318 ) $ (30,004 ) As of 6/30/13 Total Debt (1) $ 200,803
Less: Cash (8,468 ) Net Debt $ 192,335
(1) Total debt consists of outstanding balances on a revolver,
secured term loan, unsecured term loan and the principal amount of
convertible debt.
Cal Dive (CE) (USOTC:CDVIQ)
Historical Stock Chart
From Sep 2024 to Oct 2024
Cal Dive (CE) (USOTC:CDVIQ)
Historical Stock Chart
From Oct 2023 to Oct 2024