Cal Dive International, Inc. (NYSE: DVR) generated a loss for
the fourth quarter 2013 of $0.5 million, or $0.01 per diluted
share, including a $0.6 million after-tax non-cash fixed asset
impairment charge. This compares to a loss in the prior year fourth
quarter of $19.1 million, or $0.21 per diluted share, including a
$4.0 million after-tax non-cash charge related to the
marked-to-market adjustment of the derivative liability for the
Company’s convertible debt and a $4.1 million after-tax non-cash
fixed asset impairment charge. For the fourth quarter 2013, the
Company reported revenues of $159.8 million and EBITDA of $17.1
million compared to revenues of $146.4 million and EBITDA of $13.5
million for the fourth quarter 2012. The increase in EBITDA is
primarily due to increased Mexico activity partially offset by no
activity in West Africa due to the redeployment of the DSV Texas to
Mexico and lower utilization domestically due to harsher winter
weather conditions compared to fourth quarter 2012.
The Company reported a full year 2013 loss of $36.6 million, or
$0.39 per diluted share, compared to a full year 2012 loss of $65.0
million, or $0.70 per diluted share. Included in these losses are
non-cash after-tax impairment charges of $13.7 million during 2013
and $19.7 million during 2012. The Company reported full year 2013
EBITDA of $34.2 million compared to $23.3 million for full year
2012.
Commenting on the results, Cal Dive’s Chairman, President and
Chief Executive Officer, Quinn Hébert, stated, “As expected the
fourth quarter was our best quarter of the year due to the ramp up
in offshore work in Mexico. This increase was partially offset by
harsh winter weather conditions throughout the Gulf of Mexico and
lower domestic activity in part due to the re-positioning of
certain assets to Mexico.
“In Mexico, we operated six assets for the Pemex projects during
the fourth quarter and have completed approximately 60% of our
awarded $290 million in Pemex contracts as of the end of 2013.
Currently, we are operating five assets in the region as we
completed the pipelay portion of three of the larger projects in
January. One of the projects, our fourth award in August 2013 for
$40 million, has been delayed by Pemex until the summer of 2014 due
to the platform not being ready. The impact of this is expected to
be a shift of revenue and profit from the fourth quarter 2013 and
first quarter 2014 to the third quarter of 2014. We expect bidding
activity for Pemex work to continue to be strong in the coming
months.”
Mr. Hébert continued, “Looking forward, we expect improved
financial performance over the next two quarters compared to the
first half last year primarily driven by the activity related to
our Pemex contracts as we had little activity in Mexico during this
time last year. We will continue to focus on international growth
as we continue to bid on more projects in Mexico in 2014.”
Financial Highlights
- Backlog: Contracted backlog was $249
million as of December 31, 2013. This compares to backlog of $172
million at December 31, 2012. Of the backlog as of December 31,
2013, $222 million relates to international work and the remainder
relates to work in the U.S. Gulf of Mexico, with 93% of the total
backlog expected to be performed during 2014.
- Revenues: Fourth quarter 2013 revenues
increased by $13.4 million, or 9.2%, to $159.8 million compared to
the fourth quarter 2012. The increase in revenues is attributable
to increased work in Mexico, offset primarily by a decrease in
domestic revenues, in part due to some of the assets working in
Mexico being re-positioned from other locations. International
revenues accounted for 74% and domestic revenues accounted for 26%
of total consolidated revenues for the fourth quarter 2013,
compared to 66% international and 34% domestic for the fourth
quarter 2012.
- Gross Profit: Fourth quarter 2013 gross
profit was $10.5 million, an improvement of $0.4 million, compared
to the fourth quarter 2012. The improvement from prior year is
attributable to better margins on work in Mexico offset by
significantly lower margins domestically due to lower utilization
caused by harsher winter weather conditions compared to fourth
quarter 2012.
- G&A: Fourth quarter 2013 G&A
decreased by $2.1 million to $10.9 million compared to the fourth
quarter 2012 primarily due to cost savings measures implemented by
the Company. As a percentage of revenues, G&A was 6.8% for the
fourth quarter 2013 compared to 8.9% for the fourth quarter
2012.
- Interest Expense: Fourth quarter 2013
net interest expense increased by $1.7 million to $6.3 million
compared to the fourth quarter 2012, primarily due to higher
outstanding balances on the Company’s revolving credit facility
during the quarter and additional interest on the Company’s $20.0
million unsecured debt used to fund the up-front procurement of
pipe and other project materials required under the Company’s four
contracts in Mexico.
- Income Tax: The effective tax benefit
rate for the fourth quarter 2013 was 90.2% compared to a tax
benefit rate of 4.1% for the fourth 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. In addition, the low
benefit rate for fourth quarter 2012 was due to a $5.2 million
non-cash income tax valuation allowance on foreign tax credits and
foreign losses and a $1.4 million discrete period tax
adjustment.
- Balance Sheet: As of December 31, 2013,
total debt consisted of $86.25 million in convertible notes, $30.7
million under a senior secured term loan, $75.3 million outstanding
under a revolving credit facility and $20.0 million under an
unsecured term loan. Cash and cash equivalents were $12.2 million,
for a net debt position of $200.0 million at December 31, 2013,
compared to a net debt position of $151.8 million at December 31,
2012. The increase in net debt is primarily due to the working
capital needs for the Company’s four projects in Mexico. The
Company had $125.1 million in unbilled revenue at December 31,
2013, most of which was related to Mexico due to timing of
milestone billings. The net secured debt amount that is subject to
financial covenants was $93.8 million at December 31, 2013,
compared to $65.5 million at December 31, 2012. Total debt
presented on the consolidated balance sheet at December 31, 2013 is
net of a debt discount of $18.8 million on the Company’s
convertible debt. As of December 31, 2013 the Company had $46.9
million of remaining borrowing capacity under its revolving credit
facility.
Conference Call Information
Further details will be provided during Cal Dive’s conference
call, scheduled for 8:00 a.m. Central Time tomorrow, March 5, 2014.
The teleconference dial-in numbers are: (866) 953-6856 (domestic),
(617) 399-3480 (international), passcode 64247475. 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 three
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
30717140.
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 SUBSIDIARIESCondensed Consolidated
Statements of Operations(in thousands, except per share amounts)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2013 2012 2013 2012 (unaudited) (unaudited) Revenues $
159,807 $ 146,396 $ 516,958 $ 464,847 Cost of sales 149,310
136,318 504,902 467,135
Gross profit (loss) 10,497 10,078 12,056 (2,288 ) General
and administrative expenses 10,927 13,026 44,778 52,934 Asset
impairment 844 6,224 21,010 28,756 (Gain) on sale of assets, net
(336 ) (18 ) (3,773 )
(3,363 ) Operating loss (938 ) (9,154 ) (49,959 ) (80,615 )
Interest expense, net 6,336 4,643 21,275 14,786
Interest expense - adjustment to
conversion feature of convertible debt
- 6,218 (6,362 ) (2,139 ) Other (income) expense, net (1,822
) 285 (1,030 ) (178 ) Loss before
income taxes (5,452 ) (20,300 ) (63,842 ) (93,084 ) Income tax
benefit (4,916 ) (834 ) (26,250 )
(24,739 ) Net loss (536 ) (19,466 ) (37,592 ) (68,345 ) Loss
attributable to noncontrolling interest (20 ) (374 )
(958 ) (3,316 ) Loss attributable to Cal Dive $ (516
) $ (19,092 ) $ (36,634 ) $ (65,029 ) Loss per share
attributable to Cal Dive: Basic and diluted $ (0.01 ) $ (0.21 ) $
(0.39 ) $ (0.70 ) Weighted average shares outstanding: Basic
and diluted 93,981 92,757 93,827
92,751 Other financial data:
Depreciation and amortization $ 14,258 $ 15,037 $ 55,779 $ 61,581
Non-cash stock compensation expense 1,046 1,277 5,357 7,762 EBITDA
17,052
13,533 34,175 23,267 CAL DIVE INTERNATIONAL, INC. and
SUBSIDIARIESCondensed Consolidated Balance Sheets(in thousands)
December 31, December 31,
2013 2012 ASSETS (unaudited) Current assets: Cash $ 12,190 $
8,343 Accounts receivable, net 180,530 135,205 Other current assets
37,323 36,361 Total current assets 230,043
179,909 Net property and equipment 388,580 423,536
Other assets, net 32,059 27,228 Total assets $
650,682 $ 630,673 LIABILITIES AND EQUITY
Current liabilities: Accounts payable $ 114,663 $ 73,480 Other
current liabilities 33,342 37,995 Current maturities of long-term
debt 13,989 4,219 Total current liabilities
161,994 115,694 Long-term debt 179,464 133,116
Derivative liability for conversion
feature of convertible debt
- 22,456 Other long-term liabilities 67,207 91,132
Total liabilities 408,665 362,398 Total equity
242,017 268,275 Total liabilities and equity $
650,682 $ 630,673 Reconciliation of
Non-GAAP Financial MeasuresFor the Periods Ended December 31, 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.
Three Months Ended Twelve Months Ended December 31, December
31, 2013 2012 2013 2012
EBITDA (unaudited) $
17,052 $ 13,533 $ 34,175
$ 23,267 Less: Depreciation & amortization
14,258 15,037 55,779 61,581 Less: Income tax benefit (4,916 ) (834
) (26,250 ) (24,739 ) Less: Net interest expense 6,336 4,643 21,275
14,786 Less: Interest expense - conversion feature adjustment -
6,218 (6,362 ) (2,139 ) Less: Non-cash stock compensation expense
1,046 1,277 5,357 7,762 Less: Severance charges - 60 - 2,289 Less:
Non-cash impairment charges 844 6,224
21,010 28,756
Loss attributable to
Cal Dive $ (516 ) $ (19,092
) $ (36,634 ) $ (65,029
) As of 12/31/13 Total
Debt (1) $ 212,208 Less: Cash (12,190 ) Net Debt $ 200,018
(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 International, Inc.Brent Smith, (713) 361-2634Executive
Vice President, Chief Financial Officer and Treasurer
Cal Dive (CE) (USOTC:CDVIQ)
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