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8-K - FORM 8-K 3Q 2014 11-5-2014 - Cal Dive International, Inc. | form8k.htm |
EX-99.2 - 3 Q 2014 EARNINGS PRESENTATION - Cal Dive International, Inc. | exhibit99_2.htm |
2500 CityWest Boulevard
Suite 2200
Houston, TX 77042
(713) 361-2600
|
FOR IMMEDIATE RELEASE
November 5, 2014
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Contact:
Ike Smith
Vice President - Finance
(713) 243-2713
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·
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Backlog: Contracted backlog was $149 million as of September 30, 2014. This compares to backlog of $249 million at December 31, 2013 and $340 million at September 30, 2013. Of this backlog, $109 million relates to international projects with $40 million relating to projects in the U.S. Gulf of Mexico of which 40% is expected to be performed during the fourth quarter 2014. The September 30, 2013 backlog of $340 million included $192 million related to the four Pemex projects. These projects are now 94% complete on a combined basis, and represent only $24 million of the current backlog.
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·
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Revenues: Third quarter 2014 revenues decreased by $40.7 million to $114.6 million compared to the third quarter 2013. International revenues decreased by 42% while domestic revenues increased by 8%. The decrease in international revenues is due to less activity in Mexico slightly offset by increased revenue in Australia and the North Sea. The increase in domestic revenues is due to increased new construction related projects, which was partially offset by a reduction in revenue related to the sale of the Company's surface diving fleet effective May 31, 2014.
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·
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Gross Profit (Loss): Third quarter 2014 gross loss was $2.2 million, a decrease of $12.7 million compared to gross profit of $10.4 million for the third quarter 2013. The deterioration is primarily attributable to lower revenues in Mexico as the Company's Pemex projects have begun to wind down.
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·
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·
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Interest Expense: Third quarter 2014 net interest expense increased by $3.9 million to $9.6 million compared to third quarter 2013, primarily due to higher levels of debt as a significant level of working capital continues to remain tied up in Mexico, and higher interest rate margins and fees on outstanding indebtedness.
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·
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Income Tax: The effective tax benefit rate for the third quarter 2014 was 30.5% compared to a tax benefit rate of 40.3% for the third quarter 2013. The difference in the effective tax rate from the statutory rate for the third quarter 2014 is due to the mix of pre-tax profit and loss between U.S. and international taxing jurisdictions with varying statutory rates and an adjustment of the Company's international valuation allowance.
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·
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Balance Sheet: As of September 30, 2014, total debt consisted of $86.25 million in convertible notes, $100.0 million under a senior secured second lien term loan and $99.8 million outstanding under the first lien revolving credit facility. Cash and cash equivalents were $9.6 million, for a net debt position of $276.5 million at September 30, 2014, compared to a net debt position of $261.3 million at June 30, 2014 and $200.0 million at December 31, 2013. The increase in net debt from the prior quarter is primarily due the timing of collection of a large Pemex receipt that was collected in October 2014. The working capital outstanding on the Pemex projects was $60.0 million at September 30, 2014. Total debt presented on the consolidated balance sheet at September 30, 2014 is net of a debt discount of $15.4 million on the Company's convertible debt.
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CAL DIVE INTERNATIONAL, INC. and SUBSIDIARIES
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
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||||||||||||||||
Three Months Ended
September 30,
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Nine Months Ended
September 30, |
|||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(unaudited)
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(unaudited)
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|||||||||||||||
Revenues
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$
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114,583
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$
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155,246
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$
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355,376
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$
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357,151
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||||||||
Cost of sales
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116,802
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144,800
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381,245
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355,592
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||||||||||||
Gross profit (loss )
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(2,219
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)
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10,446
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(25,869
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)
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1,559
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||||||||||
General and administrative expenses
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10,273
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11,140
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31,881
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33,851
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||||||||||||
Other items
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2,656
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-
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2,656
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-
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||||||||||||
Provision for doubtful accounts
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1,279
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-
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10,787
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-
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||||||||||||
Asset impairments
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34,826
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20,041
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36,773
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20,166
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||||||||||||
(Gain) loss on sale of assets, net
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708
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(314
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)
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(8,209
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)
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(3,437
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)
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|||||||||
Operating loss
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(51,961
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)
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(20,421
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)
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(99,757
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)
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(49,021
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)
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||||||||
Interest expense, net
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9,571
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5,677
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23,156
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14,939
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||||||||||||
Interest expense - adjustment to conversion feature of convertible debt
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-
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-
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-
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(6,362
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)
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|||||||||||
Loss on early extinguishment of debt
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-
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-
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4,652
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-
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||||||||||||
Other (income) expense, net
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(212
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)
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337
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8
|
792
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|||||||||||
Loss before income taxes
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(61,320
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)
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(26,435
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)
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(127,573
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)
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(58,390
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)
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||||||||
Income tax benefit
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(18,685
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)
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(10,643
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)
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(42,586
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)
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(21,334
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)
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||||||||
Net loss
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(42,635
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)
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(15,792
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)
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(84,987
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)
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(37,056
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)
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||||||||
Income (loss) attributable to noncontrolling interest
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(6
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)
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1,008
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(232
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)
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(938
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)
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|||||||||
Loss attributable to Cal Dive
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$
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(42,629
|
)
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$
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(16,800
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)
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$
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(84,755
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)
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$
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(36,118
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)
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||||
Loss per share attributable to Cal Dive:
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||||||||||||||||
Basic and diluted
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$
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(0.45
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)
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$
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(0.18
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)
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$
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(0.89
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)
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$
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(0.39
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)
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||||
Weighted average shares outstanding:
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||||||||||||||||
Basic and diluted
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95,224
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93,793
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95,146
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93,775
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||||||||||||
Other financial data:
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||||||||||||||||
Depreciation and amortization
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$
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13,547
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$
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13,710
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$
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41,803
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$
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41,521
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||||||||
Non-cash stock compensation expense
|
778
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1,457
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3,206
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4,311
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||||||||||||
Severance
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52
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-
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1,397
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-
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||||||||||||
Adjusted EBITDA
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1,395
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13,442
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(2,911
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)
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17,123
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CAL DIVE INTERNATIONAL, INC. and SUBSIDIARIES
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||||||||
Condensed Consolidated Balance Sheets
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||||||||
(in thousands)
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||||||||
September 30, | December 31, | |||||||
2014
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2013
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|||||||
ASSETS
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(unaudited)
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|||||||
Current assets:
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||||||||
Cash
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$
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9,575
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$
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12,190
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||||
Accounts receivable, net
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186,968
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180,582
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||||||
Other current assets
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40,919
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37,271
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||||||
Total current assets
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237,462
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230,043
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||||||
Net property and equipment
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311,060
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388,580
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||||||
Other assets, net
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22,471
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32,059
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||||||
Total assets
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$
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570,993
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$
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650,682
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||||
LIABILITIES AND EQUITY
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||||||||
Current liabilities:
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||||||||
Accounts payable
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$
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88,968
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$
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114,663
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||||
Other current liabilities
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32,295
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33,342
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||||||
Current maturities of long-term debt
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270,671
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13,989
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||||||
Total current liabilities
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391,934
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161,994
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||||||
Long-term debt
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-
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179,464
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||||||
Other long-term liabilities
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19,507
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67,207
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||||||
Total liabilities
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411,441
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408,665
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||||||
Total equity
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159,552
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242,017
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||||||
Total liabilities and equity
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$
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570,993
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$
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650,682
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||||
Reconciliation of Non-GAAP Financial Measures
For the Periods Ended September 30, 2014 and 2013
(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 items and adjustments in its definition of Adjusted EBITDA outlined below. The Company uses Adjusted EBITDA to measure operational strengths and the performance of its business and not to measure liquidity. Adjusted 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. Adjusted EBITDA should not be considered in isolation or as a substitute for, but instead is supplemental to, income from operations, net income and other income data prepared in accordance with GAAP. Furthermore, Adjusted EBITDA presentations may vary among companies; thus, the Company's Adjusted EBITDA may not be comparable to similarly titled measures of other companies.
The Company believes Adjusted 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 Adjusted EBITDA in communications with lenders, rating agencies and others, concerning financial performance.
The following table presents a reconciliation of income (loss) attributable to Cal Dive to Adjusted EBITDA, which is the most directly comparable GAAP financial measure of the Company's operating |
(all amounts in thousands)
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Loss attributable to Cal Dive
|
$
|
(42,629
|
)
|
$
|
(16,800
|
)
|
$
|
(84,755
|
)
|
$
|
(36,118
|
)
|
||||
Net interest expense
|
9,571
|
5,677
|
23,156
|
14,939
|
||||||||||||
Interest expense - conversion feature adjustment
|
-
|
-
|
-
|
(6,362
|
)
|
|||||||||||
Income tax benefit
|
(18,685
|
)
|
(10,643
|
)
|
(42,586
|
)
|
(21,334
|
)
|
||||||||
Depreciation & amortization
|
13,547
|
13,710
|
41,803
|
41,521
|
||||||||||||
EBITDA
|
$
|
(38,196
|
)
|
$
|
(8,056
|
)
|
$
|
(62,382
|
)
|
$
|
(7,354
|
)
|
||||
Non-cash stock compensation expense
|
778
|
1,457
|
3,206
|
4,311
|
||||||||||||
Non-cash impairment charges
|
34,826
|
20,041
|
36,773
|
20,166
|
||||||||||||
Other items
|
2,656
|
-
|
2,656
|
-
|
||||||||||||
Loss on debt extinguishment
|
-
|
-
|
4,652
|
-
|
||||||||||||
Provision for doubtful accounts
|
1,279
|
-
|
10,787
|
-
|
||||||||||||
Severance charges
|
52
|
-
|
1,397
|
-
|
||||||||||||
Adjusted EBITDA
|
$
|
1,395
|
$
|
13,442
|
$
|
(2,911
|
)
|
$
|
17,123
|
|||||||
As of 9/30/14
|
||||||||||||||||
Total Debt (1)
|
$
|
286,050
|
||||||||||||||
Less: Cash
|
(9,575
|
)
|
||||||||||||||
Net Debt
|
$
|
276,475
|
||||||||||||||
(1) Total debt consists of outstanding balances on a revolver, second lien secured term loan and the principal amount of convertible debt.
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||||||||||||||||